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Select Committee on Agriculture, Food and the Marine debate -
Tuesday, 4 Dec 2018

Vote 30 - Agriculture, Food and the Marine (Supplementary)

As we have a quorum, we will commence the meeting. We are now in public session. Apologies have been received from Deputy McConalogue. I remind members and witnesses to make sure their mobile phones are turned off completely as they interfere with the broadcasting system. The meeting has been convened to consider the Supplementary Estimate for 2018: Vote 30 - Agriculture, Food and the Marine, which was referred to the committee by the Dáil on 21 November with an instruction to report back to the Dáil no later than 12 December. On behalf of the committee, I welcome the Minister for Agriculture, Food and the Marine, who will speak about the Supplementary Estimate. I also welcome officials from the Department of Agriculture, Food and the Marine.

The Minister will make a brief opening statement after which members who indicate they wish to speak will have an opportunity to give a brief response if they wish. We can then consider the Supplementary Estimate. Is that agreed? Agreed. I remind members in that in accordance with Standing Orders, discussions should be confined to the items that constitute the Supplementary Estimate. We are trying to keep it as concise and focused as possible. I invite the Minister to make his opening statement.

I appreciate the opportunity to present this request for a technical Supplementary Estimate for 2018 in which I am seeking the committee's approval to use savings on the Department's Vote to fund other desired expenditure and for approval for additional funds to support the agri-environment schemes and the fodder schemes.

As these proposed transfers and expenditure involve significant changes to the original 2018 voted allocations, I believe that it is important to seek the committee's input and approval. Specifically, this technical Supplementary Estimate will transfer €15 million of savings in certain areas of the Vote to the World Food Programme, WFP, to support its humanitarian work across the world. I am also requesting the committee's approval for funding of a further €23 million for the agri-environmental schemes to ensure that there is sufficient funding available to pay a higher advance payment of 85% funding to all farmers who establish their eligibility under these schemes. Finally, a provision for a further €7 million is requested for provision of payment under the various fodder schemes implemented to assist farmers during the fodder difficulties.

The €15 million current funds required for the WFP would be transferred from various subheads where due to changed circumstances, savings have emerged, most notably in the administrative budget pay subhead, control and other support scheme costs, research, quality and certification, development and promotion of agriculture and food, other services and Bord Iascaigh Mhara. There is a total figure of €3.6 million under the payroll underspend. The saving arises from a lower than estimated pay bill due to recruitment of additional and replacement staff not proceeding as quickly as planned. Also as a result of a large turnover of staff due mainly to career opportunities for staff across the civil and public services, short-term gaps can arise that in turn give rise to savings in the payroll budget.

There is a saving of €2.3 million under the subheading control and other support scheme costs. This has been identified as a result of non-requirement to draw down funds that are set aside as a prudent reserve in case of financial sanctions in our clearance of accounts procedures. There is a saving of €1.4 million under the subheading of other services. This has arisen due to savings in our legal expenses in 2018. There is a saving of €1.7 million under the subheading of research, quality and certification.

The 2018 provision was primarily required to meet funding commitments arising from expenditure incurred on previously awarded projects and for new commitments and advances on call 2017. Expenditure in 2018 is likely to be some €2 million below the original estimate of €18.6 million. It is hoped, however, that will be a greater response to future calls for further research projects as existing projects come to fruition and are replaced and in order to maintain the constant level of research activity needed to underpin the sector.

There is a saving of €3.6 million under the subheading of development and promotion of agriculture and food - non-farm. The savings are arising as there has been a lower than projected spend on lean reviews by food companies as a result of a lower than expected project completion rate in 2018 from what was initially forecast. It is understood that companies are re-examining projects in light of Brexit. In addition, the artisan food and small producer schemes have a lower than expected number of approvals that require payment in arrears. It is expected that these commitments will be drawn down in 2019.

There has been a saving of €2.4 million under the subheading of Bord Iascaigh Mhara, BIM. BIM has been assisting seafood industry members to get Brexit ready. Industry demand for Brexit assistance via grant schemes is difficult to apportion as the services provided are available in a number of individual sector schemes. These are demand-led schemes that have resulted in a lower than expected outturn compared to what was forecast in 2018, which has resulted in a savings of €2.4 million.

Overall, these current expenditure savings amount to some €15 million. With the committee's approval, this will be transferred to fund the WFP. This additional €15 million provided for WFP in this Supplementary Estimate represents an advance payment of next year's commitment under Ireland's strategic partnership agreement with the WFP. This earlier disbursement is at the request of the WFP's executive director who has written to inform me that this funding will significantly contribute to enhancing the WFP's capability to plan its interventions and better address the several growing humanitarian crises around the world.

The 2018 budgetary allocations for current expenditure under the agri-environmental schemes is €232.8 million. The expenditure projections were based on paying schemes at the 75% advance rate set out in the EU regulatory framework. However, due to the difficult circumstances farmers were finding themselves in, in particular the fodder shortage and the unprecedented weather, I made a request to the European Commission for approval for Ireland to pay higher advance payments of 85% for Pillar II rural development schemes, which is allowed under EU regulations in exceptional circumstances. The additional €23 million sought in this Supplementary Estimate will facilitate this higher payment to farmers, in particular GLAS and the organic farming scheme, and will bring the total spend under agri-environmental schemes to €256 million in 2018. I urge all participants in receipt of correspondence from the Department to submit required documentation to enable issuing of their advance payment in 2018.

In early 2018, I introduced the fodder transport scheme and a fodder import measure. In response to the deteriorating weather conditions and fodder shortages experienced in the sector in recent months, the Department put in place a range of support measures to address the situation. The fodder incentive production scheme was introduced in autumn 2018 with an allocation of €2.75 million. This measure provided an incentive of €155 per hectare for tillage growers to grow a temporary crop of short rotation grasses for fodder production over the winter months and €100 per hectare for those growing catch crops. It is expected that somewhere between €1.5 million and €1.8 million will be paid before year end. The fodder import scheme, which was also introduced in autumn 2018 has an original allocation €4.25 million. This measure was introduced to contribute to the transport costs of imported forage, including hay, silage, haylage and alfalfa, from outside the island of Ireland. The closing date of the scheme is 31 December 2018. Importers are currently submitting their applications to allow payment to issue. At this stage, as it is a demand-led scheme, it is difficult to estimate the level of expenditure in this scheme for 2018. It is not expected that the full €4.25 million will be drawn down in 2018. The additional €7 million sought in this Supplementary Estimate will facilitate these payments.

The original allocation in 2018 to the Brexit response loan scheme of €25 million was current funding, as was the allocation for earlier loan schemes. However, due to a technical decision by the Department of Public Expenditure and Reform, the allocation now needs to be reclassified and paid as capital expenditure. No extra expenditure above what was originally provided for in 2018 is involved.

The Department's appropriations-in-aid have been substantially greater in 2018 than provided for in the 2018 Revised Estimates. We seek to offset our additional requests against these receipts. These payments are from the European Commission and are the EU funding component for our co-funded rural development programme schemes, including areas of natural constraints scheme, GLAS, TAMS and the beef data and genomics programme. These are paid in arrears by the Commission, usually on a quarterly basis. The additional receipts reflect the late arrival of a payment in respect of the third quarter of 2017, which was expected to be received by the Department in December 2017 but was not received until early January 2018.

This is a technical Supplementary Estimate. The savings I have outlined will be used to fund the World Food Programme and agri-environmental schemes, in particular GLAS and the fodder schemes. I earnestly recommend the Supplementary Estimate to the committee for support. I am happy to respond to any questions that members may have.

I ask members to keep their questions to the subheads so we will be able to go through them quickly. The first heading is food safety, animal and plant health and animal welfare. As there have not been huge changes and if no members have questions we will move onto farm sector supports and controls.

I was listening to the Minister's speech and not looking at the document. Where is the allocation for veterinarian inspections in meat factories? Is it under food controls?

That is under B11.

Does that deal with agri-environmental schemes?

Does the Deputy see B11 on the list?

That would not have anything to do with the meat factories as such.

It deals with controls and other support schemes. I think I know the question the Deputy is going to ask.

I am only trying to find out when I should ask because I will ask it anyway. I might as well get on with it and ask it now. There was a serious article in the agriculture media this week about trim in factories and this is something that farmers have felt aggrieved about for a number of years. It now seems concrete evidence is available that what farmers have suspected for a long time is actually the case and that factories have been found guilty of excessive trim before the carcass gets to the weighing scales. It is imperative that we know the names of the factories, the dates on which they were caught at the offences and how many carcasses were involved. How regular are the checks in the various factories? Are there repeat offenders? What detailed scrutiny do the factories have on trim? What percentage of inspections have found an overzealous trim? A €200 fine was imposed. That seems to be a very light slap on the knuckles for something farmers feel has cost them a lot of money over a significant period of time.

I do not have a lot of the technical details with me so I will work from memory and the Deputy might bear this in mind. My recollection of the figures I have seen are that in 2017 there were approximately 56,000 carcass examinations; there were no penalties in 2015; in 2016, 28 penalties were incurred; in 2017 there were none; and, to date, in 2018, 20 or 21 penalties have been incurred. There were no penalties in two years and fewer than 30 in the other two years. As I understand it, the options available are either administrative sanctions or prosecutions and to date there have been administrative sanctions. This means there has been no day out in court on the issue.

All that were found to have excessive trim were 20 carcasses out of 56,000.

From the figures I have quoted, yes.

Do Deputies have any other questions?

I will provide some additional information. A total of 33 plants are the subject of departmental monitoring. There will be additional staff allocated to that function in early 2019. That will be done during the first quarter of the year.

Will the Minister comment on the context and impact indicators for the section relating to climate change? These provide positive figures for the reduction in carbon dioxide emissions from agriculture. In the past three years, the figures have increased from 18.78 million metric tonnes to 19.5 million metric tonnes. This is 0.71 million metric tonnes below the baseline figure. On what is this figure based? Where are these figures from?

Where is Deputy Pringle getting those figures?

They are under the heading on context and impact indicators of the programme. According to the document, carbon dioxide levels are well below the 1990 and 2005 baselines. It also suggests agricultural ammonia or NH3 emissions are increasing significantly but figures for 2016 are not yet available. They were supposed to available by early 2018, however. They should have been available for this meeting.

Where are reductions in carbon emissions being achieved and where are they targeted? They are increasing every year and the outlook is not favourable. I know there is a dilemma in how to manage this in the context of the projected growth in agriculture under Food Wise 2025 and so on. Surely the Department needs to target this area now. It should decide how we can start to reduce the carbon emissions or at least maintain current levels, which would not be adequate, as is recognised across Government.

The figures we are quoting on the emissions profile in agriculture are, I understand, from the Environmental Protection Agency. They are credible figures.

Is the Minister saying they are not credible?

They are credible.

We are conscious in the Department of the obligation in the sector to address the emissions profile in agriculture. Under the targeted agricultural modernisation schemes, we have funding available. Deputy Pringle mentioned ammonia. That is one area where we are significantly challenged because our ammonia emissions are virtually at the ceiling. We are grant-aiding low emissions slurry spreading as a technology in contrast to splash-plate spreading of slurry. The former reduces ammonia emissions by in the region of 30%. That is one area where there is a significant gain.

There is a host of other initiatives and the agrifood industry generally needs to take these on board. These include investment in the beef data genomics programme. We are enhancing that through the additional allocation in the 2019 budget for the beef environmental efficiency scheme to reduce the carbon footprint of the beef sector. There are those who will say that, relatively speaking, our emissions profile in the beef sector is competitive, but we need to do more.

Along with New Zealand, we are considered to be one of the most carbon efficient producers of dairy per unit of output. However, we need to reduce emissions intensity in the dairy sector as well. Measures such as the beef data genomics programme, BDGP, and the beef environmental efficiency scheme will enable us to accelerate the journey to a more carbon efficient beef sector by having a small suckler cow, a bigger weanling, a more fertile suckler cow and a cow that is easy-calving. All these collectively contribute to a lower carbon footprint on the slaughtered animal. That is important, not only because of the climate change responsibility but also increasingly important for the market, which is asking questions about the environmental sustainability of the industry.

We have measures such as milk recording on the dairy side. There has been increased output in the dairy sector since quotas were abolished. I have seen figures suggesting that 70% of the increased output has come from increased cattle numbers and 30% from increased use of genetics. We need to turn the tables substantially and get more from improved genetics in the dairy herd. Up to a point, it is understandable that there may have been a headlong rush to avail of the opportunities post quota. However, we now need to concentrate on catching up with efficiencies. We need to ensure data are available from milk recording. Currently, milk recording is used in only 40% of dairy herds. Increasing the number of herds where milk recording is used and using the data from milk recording to improve the genetic merit of the dairy herd further would have been considered to have been a leader in terms of the economic breeding index. We need to do more in that area. That will allow us to get more production from fewer cow numbers. That improves the carbon efficiency of the industry.

Grassland management is a particularly important area, as is improving soil fertility. It is a staggering figure, but in the beef sector fewer than 1% of beef farmers are involved in grassland management. Grassland management involves measuring grass growth using pasture base or other technologies that are available to ensure production is from a sustainable food source. We can grow grass better than anyone else. Promoting use of grass measurement is important. Teagasc runs the Grass10 programme. Yesterday, we had the announcement of the grassland farms of the year across the dairy, sheep and beef sectors. We need to mainstream grassland management. Again, there is higher participation on the dairy side but we need to ensure that these practices are brought into the mainstream across all sectors.

We need to improve soil fertility to its optimum level and reduce in some instances the amount of chemical fertiliser that we need to apply. When applying fertiliser we should use the most environmentally friendly options, for example, protected urea as opposed to using calcium ammonium nitrate as a nitrogen source. That significantly improves the effect of the release of nitrous oxide, which is another one of the greenhouse gases. Soil fertility is important.

Another side of this is greenhouse gas production. If we are producing food, we will have greenhouse gas production. We need to look at how we can sequester the maximum amount of carbon possible. We spend in excess of €100 million on the Department's afforestation and forestry road programme. It is important that farmers take up the opportunity this presents. My colleague, the Minister of State, Deputy Doyle, recently concluded a review of the forestry programme and has tweaked it significantly, with new options such as low-density agri-forestry to try to address the mix of deciduous and hardwood trees. We are increasing the payments marginally to improve take-up to sequester carbon production.

There is no one initiative that will address this problem on its own. It will involve a combination of a series of initiatives, some of which I have mentioned.

When will they be implemented?

Some are being implemented. For example, €100 million per year is available for afforestation.

They have not been successful thus far based on these metrics.

Some have been successful. Under TAMS, we are funding low-emissions slurry spreading, which is dealing with ammonia production. Through Teagasc, we are encouraging participation in grassland management. The problem for us is that every five years or so a major opportunity comes around to engineer programmes under the Common Agricultural Policy. For example, under the green low-carbon agri-environment scheme, GLAS, we are spending hundreds of millions and under the BDGP we are spending hundreds of millions.

GLAS has been in place for years. I do not believe we are seeing any improvement as a result.

Under GLAS, we have planted thousands of kilometres of hedgerows. Under BDGP there will be a journey to improve the genetic merit of the beef herd.

As such, what we have achieved is that they are not rising as fast as they would have been.

Nobody on this side of the table is arguing that we do not need to do more. We are engaged in discussions concerning the next round of the CAP. There will be an opportunity in the next rural envelopment programme to accelerate that journey with financial support for farmers.

Does the Department accept that we only have ten or 15 years to make the changes? Does the Minister accept that?

Of course we do, and unlike many other sectors we have been proactive in this space. Our current rural development programme is significantly skewed in the direction of climate support measures.

I accept what the Minister is saying, but the figures do not reflect that.

As a consequence our dairy industry is the most carbon efficient. Nobody disputes this.

What does that mean? That just means-----

It means that if a consumer buys 1 l of milk or 1 kg of cheese, skimmed milk powder or infant formula produced by the Irish dairy industry he or she can be assured that it is produced far more efficiently per unit of output than in any other country in the world, with the possible exception of New Zealand, which is similar to us.

We talked about-----

I ask the Deputy to let me finish this point because it is important. This is a global challenge. The Paris Agreement, which our sector must reflect, calls for reducing our greenhouse gas emissions without compromising food production. We face a fundamental question. There are those who advocate dismantling the national herd and in many respects dismantling the rural economy based on food production, cattle rearing etc. That is one school of thought. I do not subscribe to it.

The Minister's only options are to continue as we are going or to completely dismantle the industry. Those are not the options available to us.

I am not arguing-----

The Minister is quite happy for this to continue. That is what these figures reflect.

Our journey has been one of progressive improvements. It has involved committing hundreds of millions of euro of taxpayers' money to assist the industry on that journey, inside and outside the farm gate. We accept that we need to accelerate that journey, but we are starting-----

Does the Minister think it has been a success?

We are starting from a position of being the most carbon-efficient dairy producers. Can we do more in the dairy industry? Absolutely. Will we do more? Yes. Should we do more? Undoubtedly.

There is no argument there.

The Deputy may laugh, but what is the point in dismantling an industry that is a global leader?

Nobody is talking about it. The Minister is the one talking about dismantling the industry.

Deputy Pringle is asking questions that seem to imply we have been doing nothing; far from it. We have had the foresight to invest significantly and to respond to what the market is demanding. Leaving aside the legally binding obligations and financial framework we are subject to under the Paris Agreement, this is also a market imperative. Buyers in high added-value markets are increasingly asking about sustainability, animal welfare standards and antimicrobial resistance. These are the issues that are asked about in the markets we want to be in. We are good and we will be better.

It is a constant journey of improvement. It is not a destination.

It is a destination because we do not have the time. Can we expect significant improvements in the figures for 2016, 2017 and 2018?

There is no point in masking this. Because of the increased opportunities in the post-dairy quota era, emissions that were either flatlining or on a downward trajectory have begun to rise again. We have to factor in the fact that while they are rising, we are still the most carbon efficient. There is demand. Is it better for people who want dairy products to buy them from producers who are efficient and committed to being more so, or from producers who have a much higher carbon footprint? We have an advantage in this regard. We should build on that, but we must do so in the most climate-friendly way.

Deputy Corcoran Kennedy was the next to indicate.

I remind the Deputy that we are dealing with section B now. We will try to keep a format to our meeting.

In which section is payroll underspend?

Section A. We were all happy with that ten minutes ago.

Hold on a second. I see payroll in this section as well. I was handed this document when I came in. It is a bit unfair to start changing things around. I had some questions ready to ask.

I apologise to the Deputy. Administration is included in section B, under B1 and B2.

Pay is covered in sections A1, B1, C1 and D1.

We are dealing with the Supplementary Estimate. I have been directed to sections B3, B12, C9, C10 and E.

The big changes are marked in green on the document. The additions are green and the decreases are red. There is a note on the back of the sheet.

I see that. I have questions to ask but it is not exactly clear which heading they fall under. Can I just ask them in general?

The Deputy can be imaginative with the questions.

I know the Chair will direct me correctly. Overall, it is welcome that the World Food Programme, GLAS, and fodder schemes will benefit from this. I support the Supplementary Estimate. I have a question concerning the Vote overall. What will happen to this funding in 2019 if, say, there are adverse weather events or a terrible impact is caused by Brexit or CAP changes? What kind of contingency has the Department?

Is the Minister concerned by payroll and the delays in recruitment? Is that inevitable because of movement within the Civil Service?

I would also like to ask about the status of the Brexit loan scheme. Farmers are concerned about the delay in accessing funding. Is the Minister happy with how accessible it is to those who require it?

On the latter question, the legislation enabling us to proceed with the capital investment fund in early 2019 has completed its journey through the Seanad. The Minister for Business, Enterprise and Innovation, Deputy Heather Humphreys, is piloting that legislation. It is minor and technical legislation. As I understand it, primary legislation must underpin the loan initiative because of the involvement of the European Investment Bank. I imagine that will be concluded in the Dáil before Christmas and, therefore, all the legislative hurdles associated with the launch of the loan scheme in early 2019 will be cleared. As I said previously, we identified a gap in the market for funding for capital investment in the area of longer-term finance. There is sufficient competition in the market for shorter-term money. We identified a gap in the market for finance over eight to ten years. We propose to fill that gap with this product. There will be a minium borrowing requirement of €50,000. Unsecured borrowing at an interest rate of less than 5% will be offered. Those are the main characteristics of the loan product we will introduce.

On weather, this Supplementary Estimate was required for a couple of reasons. One reason was the fodder initiative we introduced. I do not make this point to denigrate in any way those still facing significant challenges, but our initial audit showed a fodder deficit of almost 30%. The most recent audit showed that we were at a 1% deficit. This shows the value of working collaboratively. We have reached this point through work led by my own Department and Teagasc, in collaboration with all stakeholders, including farm organisations, financial institutions and the agrifood industry.

There are many who would have had us do much more at a much earlier stage at much more expense. All of the steps we took, however, were prudent and appropriate. They have got us to a situation now where the deficit is manageable. I urge farmers who still face a challenge with their holdings to engage with the advisory service and, in particular, to get involved in fodder budgeting. The Department will keep the situation under review. One of the initiatives on tillage side where we have had a response was the planting of 20,000 hectares. That is important and we should be appreciative of the tillage sector for that response.

There is also the import aspect. I am aware some approved importers now have a situation where the products they have imported are warehoused rather than distributed. There are those - including some who may be in this room and if the cap fits, wear it - who would have had us importing in July. We would be left with stockpiles of fodder now. The benefit of having worked collaboratively was that the steps taken were appropriate and taken at the appropriate time. We will, however, keep the situation under review. If there is a need to intervene in 2019, we will review it then.

Is Deputy Corcoran Kennedy happy with that?

I call Deputy Martin Kenny.

I will not get into too much detail. One of the things that strikes me regarding fodder is that we have been lucky. We have had a mild autumn and grass has been growing until recent weeks.

When there is blame attributed for the bad weather, the credit might as well be taken for the good weather.

I do not suggest the Minister brought the good weather.

I just thought that-----

I would not blame the Minister for bad weather or credit him for good weather either. We all have to be realistic. The weather does what the weather does and we cannot control that. Having said that, every effort has to be made to mitigate against it, as far as possible. We have these discussions many times. The fodder crisis can be solved by most farmers on their own farms and that is the best place to solve it. Every assistance should be given to farmers to maximise the fodder they produce themselves. The way farmers manage their own grasslands is the best way of ensuring we can resolve these problems in future.

Some of the measures in place in that regard such as the knowledge transfer scheme have helped with that. It is, ultimately, however, down to the area of the country a farmer is in. Someone farming in County Wexford this year would talk about a need for irrigation. Farmers in Donegal, however, still have a problem with wet soil. It depends on where a person is and what the problems are. That being said, we have been fortunate that the fodder crisis people expected and feared did not materialise. Thank God it did not. We will move on from there as best we can.

A number of other issues were mentioned. Pay was mentioned, as were administration and savings. Most of that is the result perhaps, as the Minister has said, of people retiring and not being replaced as quickly as anticipated. I am conscious farmers in many areas are waiting to get payments and there have been delays. Is the shortage of staff having an impact and is that something that needs to be considered? There is a broader issue in the context of Brexit. I notice there was some shortfall in funding, particularly through An Bord Bia and other agencies. Deputy Pringle mentioned climate change during the discussion earlier and all of that is part of this. We need to look at alternatives and where we are going in the future.

We all know we are the most energy and carbon efficient producers of milk, which is fine. The growth in the volume of milk produced has created a problem as well. That is because of the open market. There is a similar scenario in beef production but that has been decreasing because the market has led to that situation. How much effort has been put into, and how much more effort could be put into, opening up alternative sectors that will mitigate against our carbon emissions? I refer to those not there at present where farmers could do more to help the climate situation while also make a profit for themselves. I refer to a profit they will have today rather than one that will be a retirement fund like forestry. That type of profit is long term and far into the future. This is one of the key areas that needs to be looked at.

We are looking at a Vote here today but I am more interested in where we plan to be in ten, 15 or 20 years. That is what we need to consider for the agricultural sector. We can all state what is good now and call for us do more of it. We need, however, to look much further ahead than that because today's bubble might burst. There is great merit in long-term planning in this area. Where is the space in this budget for that long-term planning? I refer to examining the opening up of new sectors and possibilities or taking niche markets and developing them into something that will be progressive and good for new sectors into the future.

On the fodder issue, the weather comes and we will have to deal with whatever that is. In that context, building resilience on farms is important. Returning to the point I made to Deputy Pringle on grassland management, this is an area where we can do much more. Previous advice on carrying surplus silage from one season into another regarded it as a charge on the balance sheet and not good farming. We need to move away from that. We need to build up reserves in a prudent way to take account of events outside of our control. That message is swinging back into vogue.

The difference in grassland management is staggering between those who use the science and technology available and those who do not. At an awards ceremony yesterday, I made the point that we need to make things as simple as possible in this regard. We talk about apps and pasture base, etc. Sometimes that is challenging for farmers who may not be technologically savvy. It is simple, however. We are referring to soil fertility that reduces the volume of fertiliser that needs to be spread. We need to make that knowledge available to all farmers because the difference in the yields of tonnes of grass and dry matter between the best farmers and those at the other extreme is staggering in regard to the additional costs. We can make much progress there.

I am advised that there are no undue delays with farm payments. There are always individual cases for one reason or another. There are, however, no staffing issues in the critical areas processing payments. Notwithstanding an underspend in the staff area, we have recruited additional staff to address shortfalls across the range of activities in which the Department is involved.

The Deputy's observation on beef production is incorrect regarding the reason for the decrease. He may be mistaken because there is a marginal reduction in the number of suckler cows, which is accepted, but the beef kill is at almost record high levels. In recent weeks, it has been at 40,000 or more. Suckler cows and the expanding dairy herd have given rise to a larger population of calf to beef in dairy herd enterprises. Overall, then, there is not a decline in beef production.

There is certainly a decline in the profit farmers are making.

I accept that. Some of the points I am making are on how to drive efficiency by using things such as genetic merit, grassland technology and reducing costs. They will all help. The market, however, is the market. There is not much I can do about that. What I can do is encourage farmers to avail of the range of initiatives in which the Department is involved. The Deputy makes an interesting point about new enterprises. One of the areas where there are opportunities is organic farming. There is market demand for certified organic produce and we have reopened the organic scheme, albeit with modest funding. There are major opportunities in the organic sphere in the dairy and tillage areas, although not exclusively in those areas. For example, we import organic oats.

We are approaching a stage where a successor to the Food Wise 2025 document will be needed. That will need to examine the challenges that lie ahead. Such challenges include climate change so how to draft a vision for the industry for the next decade is a challenge we will consider in the very near future. New opportunities must be part of that consideration as well.

I am conscious - this issue arises regularly - that the Minister does not have a role in the market. The market dictates and demands. However, I would put it to him that a significant amount of taxpayers' money goes into marketing Irish food produce around the world through Bord Bia. When taxpayers' money is being used to market food, very often the people who make the most money from that food are not the primary producers but the people in the middle such as the processors and the supermarkets. Is there not a responsibility to ensure that the primary producer gets a fair price? We all know the interests of the consumer must be looked after but the interests of the primary producer must also be looked after. A significant amount of public money is going into this industry. It is going directly to farmers but it also goes into the industry through marketing all this food and ensuring that there is an adequate price but the latter does not go back to the primary producer and certainly not to the farmer from Drumshanbo who sends them the weanling. Such a farmer does not see it, which is the problem. I put it to the Minister that there must be a level of responsibility in terms of State funding for all of this, but the primary producer is not getting a return.

There are two issues here. There is an initiative at European level dealing with unfair trading practices. It is about trying to strengthen the position-----

It differs from that. I understand unfair trading practices. It is across the board here. It is not just about unfair trading practices.

If the Deputy is asking me whether I can tell the meat producers what to pay for beef at any given time, the answer is that I cannot do so. We are funding marketing and promotion initiatives involving Irish produce through Bord Bia. We do not get involved in price-----

I understand the Minister's dilemma. I am not suggesting he has to-----

We promote Ireland as a good destination in all its glory in terms of seafood, the beef and dairy sectors and the drinks industry. We promote Ireland as the food island and do a lot of work in terms of market access, etc., which is as it should be. In terms of legislation, there is an initiative at EU level that is not insignificant and has been broadly welcomed by the industry in terms of taxing unfair trading practices because I share the view that primary producers and at the other end, consumers invariably end up in the weakest positions on that supply chain. Anything we can do in that space to create a fairer playing pitch is important.

The other thing we have done is make funding available to farmers through producer organisations. This is part of the infrastructure and architecture in other countries but is something whose possibilities we are only beginning to explore. We have approved a number of people to facilitate the establishment of producer organisations, which would not just enable negotiations in respect of specifications, etc., and engagement with meat plants but would also enable those producer organisations to address their cost base through group purchasing and so on. That is important and something on which we could make progress.

There is a difficulty with producer organisations. For many farmers, they do not go from start to finish. Where I am from in the west, farmers generally produce weanlings but they have neither the land nor the capacity to finish animals. They must sell their animals on to other farmers who can do that, so there is a break in the chain. One of the flaws that exists is that farmers cannot produce the finished product.

How producer organisations might assist that cohort of farmers is a matter that could be usefully explored. One thing that bedevils the beef industry is the amount of movement. The number of people trying to carve a slice out of the end product is probably too high. A group that would assist the sellers of weanlings to finishers could work as a producer organisation. A farmer does not necessarily always have to engage with the end buyer. This is an area where we are significantly behind the curve. We have identified funding for it and we should make progress on it as quickly as possible.

A related question relates to other markets and possibilities. There has been an increase in dairy numbers in recent years. In particular, a significant number of Friesian cows were culled this year and I suggest that this has had a negative effect on the beef market. Next spring, we will see a lot of Friesian calves coming into the market. Are we developing extra markets for these because the word is that, come next spring, Friesian calves will be hard to dispose of and the price for them will be very poor? Are we looking at other markets for these calves? I was talking to another factory this morning. Its normal breakdown would be 30% culled cows and 70% beef. It is telling me that this is now 50:50. This must be reversed in order to change the difficult differences in price at the moment. Are extra markets being developed for calves that will be difficult to sell next spring and beyond?

My recollection of the figures is that there have been approximately 215,000 live exports to date in 2018. That is up by in the region of 30% on the figure for 2017. Of those, approximately 150,000 were exported calves. That is subject to correction but that is my recall of the detail so we are growing it significantly. Can we keep ahead of the growth in the national herd on the dairy side? That is a challenge but we are looking for as many opportunities as possible. The most significant issue for the export of cattle is compliance with the regulations. Anything less is a disservice to the industry, to say the least. We must be extremely vigilant because it is an area where there is a lot of vigilance around our activities.

In the broader context of live exports, obviously, the Turkish market took a hit. It was one of those issues we could not control. It was the perfect geopolitical issue - a spat between the US and Turkey - and the collapse in the value of the lira made it uneconomical for us. They have begun to source other opportunities. We are extremely active in a host of areas. The market access unit has renegotiated the veterinary certification for the Libyan market. This will give rise to increased numbers heading in the direction of live exports. Spain has become a significant market for live exports. Ultimately, many of those probably migrate to north Africa. We are also looking at other opportunities across north Africa, such as in Morocco, Algeria and, to an extent, Egypt. I am not sure but there may be opportunities in Egypt. I recently met the ambassador of Kazakhstan to explore opportunities there. We are vigilant across a range of market opportunities and obviously keep an eye on Turkey and what might happen there in the future. Live exports are a really important part of the competitive mix, as are new markets for processed meat. In 2018, market access to China opened up. This is a major development and it is hoped that it could give rise to significant trade.

I call Deputy Cahill. We have probably gone way off our format.

What I am going to say may not be received too well but I will say it in any event. In the context of the fodder scheme, I make no apologies for putting forward proposals regarding the fodder crisis. In mid-July, we were facing a famine in the winter. Thankfully, the weather intervened and we got an extremely good back end of the year. However, schemes proposed by us, such as the extension of fertiliser and slurry spreading and the catch crops with the tillage farmers, have played a significant part in redressing the imbalance that was there.

If we get a late spring, whatever surplus of imported fodder we have in store will not take long to disappear. In the southern half of the country, where fodder was non-existent in mid-August, the situation has improved very dramatically. Cattle were out grazing up to three or four days ago. If it is favourable in the springtime, we will have fodder left over, which is a far better situation in which to be. We raised the matter in the Dáil and, thankfully, the Minister and the Department took initiatives. Those initiatives with the help of good weather have changed what was a disastrous situation into one where we can come out the far side without the disastrous financial implication of a serious shortage of fodder. Farmers have incurred enormous expense - it was probably the most expensive year farmers have endured for a long period. There were eight to ten weeks in the summer during which stock were fed at winter levels. That has also left a major merchant debt level which will need to be addressed and which will be a serious issue for the future.

The Minister is not in touch with what is happening in the beef industry. I have never seen farmers as despondent about the industry. I finish a few cattle myself. Everyone in the chain, from the man producing the calf to the man finishing the animal, is absolutely despondent about the future of the beef industry. Costs for finishing cattle have risen by approximately 25% to 30% while the price has gone in the other direction. We can talk all we like about getting increased live exports, getting extra calves away next spring and the hope that various markets will open up. The reality is that we have had 40,000 killed and we are not able to sell 40,000 cattle efficiently. That is the bottom line. Our factories are not able to do it and if they are doing it, they are making a lot of money because they are not paying a viable return to the producer.

Cattle prices are disastrous, as are store prices. The Chairman stated that farmers dread the thought of what they will get for calves next spring. There is despondency throughout the beef industry. Farmers have taken enough. If one asks a suckler farmer, he will say the show is over. The man who bought animals and took them from calves to beef will say the same thing. There is complete lack of confidence in the grading system. We see animals being given O grades but there is no quality assurance. When that beef appears on a supermarket shelf in Dunnes Stores or in a Lidl in London or wherever, the customer will not see there was an O-grade carcass and yet the factory will pay the farmer 12 cent per kilo less for it.

The 30-month restriction was introduced for good reason because of the BSE crisis 20 or 25 years ago. At this stage, it is archaic and, especially with late-maturing breeds, it adds considerable extra cost for farmers and puts the factories in a position of dominance whereby they know the farmers will have to kill the cattle by a certain date and will adjust their price accordingly.

In the Estimate before us, it is proposed to spend an extra €15 million on world aid. I do not suggest that this money will not be well spent. However, we have farmers who are going broke. Certain farmers in areas of natural constraint, especially those who own land on which hen harriers roost, have had their land completely devalued by regulations issued from Brussels. We did not put a scheme in place to restore the value of that land for them. A scheme was put in place, but that land which was worth €4,000 or €5,000 per acre for forestry cannot now be sold. The capital value of that land has been completely decimated. Until we put a scheme back in place to restore the capital value of that land, we are not being fair to those people. The owners of that hen harrier land are being extremely quiet. With a stroke of a pen the entire capital value of their land was eroded.

Our beef industry is in crisis. The kill is at record levels. Our targets for 2020 and for Food Wise 2025 are all lovely, but the primary producer of the cattle is getting decimated and they will leave in droves. They cannot keep taking the losses being incurred. This winter feed costs will be significantly higher. A number of people will say they are not feeding cattle anymore. This summer many of the traditional beef men put aside their land and sold fodder down to the south rather than buying cattle.

The beef industry is in crisis. We can talk about various markets. Representatives from Bord Bia appeared before the committee two weeks ago. I do not ridicule Bord Bia's work; it is an extremely efficient organisation and works very hard. We always said that we could efficiently kill and sell 30,000 cattle. It might have been possible to get to 32,000 or 33,000. However, there is no way that we have markets for the current kill level. Turkey has disappeared as an outlet. Reality must come into it. Men just cannot continue with the returns they are currently getting from the beef industry.

The word I would use to describe the mood among beef farmers is "despondent". Men are making career changes and have said enough is enough and they cannot take anymore. I will not be unfair on the Minister. I will not claim he can dictate the price factories are paying for cattle. However, there must be a realisation that what is happening is not sustainable. We can talk about targets and everything else, but unless there is an economic return for rearing and finishing cattle, men will not stay there. At present, that economic return is not there.

In the early part of the year, the Chairman took us to an Irish Farmers' Journal lunch. At the table, I was ridiculed when talking about Friesian cattle and the returns from finishing feeding cattle. The men who were ridiculing me should see if the cap fits. There are farmers in my area who traditionally finished cattle; it will not happen anymore. They will not do it and it is over as far as they are concerned. They have been walked on too often and the price being paid at the back end is the straw that has broken the camel's back. Men just cannot keep going back to it.

I presume the decision has been made in respect of this €15 million, but there are definitely farmers on hen harrier land who need support. People would like to see this spent on trying to secure live export markets. If live exports are to have a significant effect, cattle would have to move in significant numbers. A couple of hundred per week will not make any difference. We need a significant number of live cattle moving from the country if we are to put any competition into the trade because it is just not there.

I know a man who had a lot of cows to kill last week. He asked the factory when it would take the cull cow. The cull cow is now in extremely good condition, extremely well fed. He was told the factory could not take them until the third or fourth week of January because its stores were full of beef. We just cannot viably sell the cattle we are killing at the moment. Men have just had enough.

I am not sure if there were any questions there for the Minister.

I will ask the Minister for a brief comment. I want to move on if we can. We were supposed to be finished four minutes ago.

I have listened to Deputy Cahill. It is interesting that he had no specific questions. In two years we have allocated an extra €48 million in respect of ANC payments. We have introduced a beef environmental efficiency scheme. We have allocated €25 million to a hen harrier scheme, which the Deputy failed to mention when talking about hen harrier designation.

I stated that the scheme-----

The Deputy has had his chance. I have always said the hen harrier issue is two-pronged in nature. There is an issue to address in the context of a threat-response plan - the afforestation issue - but part of it was to put in place a hen harrier scheme.

The payments in this regard have already issued and the numbers of qualifying farmers will increase.

With reference to the hen harrier payments-----

Let me finish. Deputy Cahill made reference to 30-month BSE restrictions. We have to export and find a home for nine out of every ten cattle that we produce and we try to negotiate the best possible deal that we can. It involves constant engagement with veterinary authorities in other states. We have, most recently, improved the veterinary certification requirement with Libya and that will enable us to export cattle in greater numbers there. Some of this is part of the legacy of BSE. Some of it, in terms of our retail partners, is a consumer preference issue. We are constantly trying, and work with the sector, to get the best possible market access terms but we must work with the other member states.

Deputy Cahill also made reference to a period of 30 months in the context of late-maturing breeds. In a way, if one takes 30 months to finish a beef animal, one is losing money anyway, with the exception of cow beef, as 30-month beef production is not efficient. We need to drive efficiency in the sector and part of that pertains to the €250 million we are providing under the beef data and genomics programme, BDGP, for example, as well as the additional €20 million that is forthcoming for the weanling scheme. We are doing a lot in the area. It is not an easy space. I accept it is a challenge in terms of the returns but I tend to be somebody who operates on the basis of the glass half-full rather than the glass half-empty. In respect of the issues that confront us, I have worked on how we can target resources to those who are most in need. As for credentials, to have put €8 million into areas of natural constraints, to have introduced a new scheme on beef and to have introduced the hen harrier scheme within two years is not bad.

We will move on now.

We must move on. We are tight on time. We were supposed to finish five minutes ago on this section. The next section is section C. Are there any questions on section C, policy and strategy? I will move on. Section D is the seafood sector. Deputy Pringle has a question.

The Minister gave a response in his opening statement on the reduction of €2.4 million in the BIM grant. The Minister stated it is because there has not been an uptake in grant schemes. If, for example, there is an increased uptake and there is a shortage of funding, will they be able to fund that anyway? It seems to be the only grant-aiding scheme for producers that has been targeted for a cut through the Department's cuts to make up this extra €15 million the Minister talks about. The Minister stated in his explanation that it was because they have not been getting ready for Brexit but it is not clear to fishermen what the impact of Brexit will be and how they will be to deal with it. It is different than a supplier. They are looking at catching fish. I was wondering, if they step up to the mark or if there is an increased demand, whether funding will be an issue at the end of the year.

In the EU receipts for the European Maritime and Fisheries Fund, EMFF, there is a reduction of €8.7 million for next year. There is also a reduction of €0.5 million in the European Fisheries Fund, EFF. I wonder what these are for.

Has Deputy Martin Kenny a brief question as well?

In sea fisheries-----

The Supplementary Estimate.

On the Supplementary Estimate, one of the issues that comes up in regard to section D is the issuing of the licences. We had this out previously and I missed that meeting. I have had representations since, particularly in regard to finfish licences for the aquaculture sector where there is serious pressure. Some of them have been waiting between eight and ten years. Whatever additional requirements are needed in the Department to get that moving need to be put in there as quickly as possible because it is a serious problem. All of them have been in the other shellfish sector and none of them have been done for the finfish sector. Some grip needs to be got on it. If additional resources need to be put in there, they must be put in there quickly.

I ask the Minister to wrap up on this section.

On the latter point, I appreciate Deputy Martin Kenny may not have been able to attend the meeting some weeks ago when we had a conversation about this. We have made substantial progress on clearing the backlog on the shellfish licences. We are initiating communication on the finfish applications. Only last week, I attended a BIM event for seafood awards and met a number of the beneficiaries of the accelerated licence approval process who were quite thankful for the endeavours of the Department and the officials in that section. The finfish will be more difficult but we are beginning the process, and we have allocated additional staff for that purpose.

On Deputy Pringle's question on the underspend in BIM, these are substantially demand-led grant schemes. The schemes will continue. It is a provision that we made in 2019 that has not been drawn down. The grant schemes are funded substantially under the European Maritime Fisheries Fund, which is €239 million, of which €93 million is Exchequer funding and the balance is EU funding. Those schemes will continue to be available in 2019.

Will they be restricted to the reduced level of funding?

The fund is the fund. Ultimately, the same level of funding will be approved. It is a bit like the targeted agricultural modernisation schemes, TAMS, grant scheme. The scheme is still open. It is available for applications. There will be applications that probably have been approved but have not the paperwork in. It is merely that the provision we had in 2018 is not drawn down. It will move across into 2019. All the funding will be available. There will be no moving of funds from that grant scheme.

Will the €2.4 million be available?

What of the EU receipts issue? Under appropriations-in-aid, EU receipts from the EMFF were €20.7 million in 2017 and €12 million in 2018.

I can get the Deputy a detailed breakdown on this. The Deputy will recall in my opening remarks I stated the Supplementary Estimate is a technical amendment, in fact, for an amount of €1,000. Although we are bringing forward a liability in 2019 of €15 million for the World Food Programme and approval for €23 million for the agri-environmental schemes and €7 million on the fodder side, all of that is in a way dwarfed by what is coming in by appropriations from the EU, some of which is 2017 funding. We do not control the dates on which this arrives. Some of it was expected in late 2017 and it did not arrive in until January 2018. I will get the Deputy the detail of the total of appropriations-in-aid. These are the EU co-funding aspects of some of the schemes that we administer. The EU funding arrives in at times that we do not control. Some of it does not happen neatly in financial years.

Is it not related to activity?

It is related to participation in schemes and grants.

Therefore, we have a 40% reduction in activities.

That is not the case. I will get a breakdown for the Deputy. We have fixed numbers of participants in the BDGP, in GLAS etc. Those schemes are co-funded but sometimes the funding arrives late. Sometimes, one get a 2017 and 2018 payment.

The EMFF is the European Maritime and Fisheries Fund.

Yes, that is the fund of €240 million, of which €147 million is EU funded.

The 2017 payment was higher because that was the first payment under the European Maritime and Fisheries Fund, EMFF, programme. I will get a detailed briefing note on it for the Deputy.

I thank the Minister.

That concludes our consideration of the Supplementary Estimate for Public Services for the year ending 31 December 2018 for Vote 30 - Department of Agriculture, Food and the Marine.

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