The purpose of today's meeting is consideration of the Revised Estimates for public services 2019, Vote 30 - Agriculture, Food and the Marine, which was referred to the committee by the Dáil. I welcome the Minister for Agriculture, Food and the Marine, Deputy Creed, and his officials. The format proposed for today's meeting is that we will deal with Vote 30 programme by programme. The Minister will make an opening statement on each of the five programmes at the outset. We will then consider each programme separately or see how the discussion goes at the time. Before I begin, I remind members to make sure their mobile phones are turned off. Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the House or an official either by name or in such a way as to make him or her identifiable.
Vote 30 - Agriculture, Food and the Marine (Revised)
I am pleased to have this valuable opportunity to present the current challenges and opportunities across the various sectors in agriculture, food development, marine and forestry to the committee. My key focus for 2019 is protecting vulnerable farm incomes, supporting sustainable farming and jobs in rural and coastal communities, and assisting the sector in meeting the challenges of Brexit.
In 2019, the Exchequer contribution to the Vote of my Department will amount to €1.6 billion. This comprises €1.341 billion in current expenditure and €277 million in capital expenditure, including a €22 million capital carryover. This represents an overall increase of €31 million over last year when carryovers are taken into account. Regarding our 2018 performance, I note that expenditure was €1.546 billion. Almost 99% of the current allocation was spent, reflecting a very strong delivery of crucial supports to the agrifood sector. As members may recall, our allocation for 2018 included a €30 million supplementary allocation which provided additional funding for measures introduced last autumn to alleviate the fodder situation. I thank my colleague, the Minister for Public Expenditure and Reform, and the European Commission for support given last year when we were presented with unprecedented difficulties by weather impacts on farmers.
I am conscious that we meet today at a very uncertain and challenging time for the agrifood and fisheries sector. If a no-deal Brexit emerges, I am confident that the Government and our colleagues in Europe will not be found wanting in responding to the needs of our sector. However, the Estimate I present to the committee today is as set out in the 2019 Revised Estimates as published in December 2018, which were framed for a Brexit scenario presuming implementation of the withdrawal agreement.
I will now speak about each of the four programmes and the key themes. Programme A shows a substantial increase in pay and non-pay administrative allocations. This reflects the allocation to this programme of the vast majority of the Department’s additional funding for what is termed a "central case Brexit scenario". This covers preparations for the additional checks on east–west trade, including the associated development of IT systems and equipment. Obviously, this will be adapted to any change in circumstances that may arise in the weeks ahead.
I am providing for a substantial increase in programme expenditure, which includes additional funding for the meat inspection service. This relates to a new arrangement recently agreed between my Department and Veterinary Ireland regarding the engagement of temporary veterinary inspectors. I have provided a once-off sum of €4 million in additional funding to support the introduction of sheep electronic identification, EID, with funding both for producers and to provide readers for marts. I am also providing additional funding for ERAD, recognising that even with good progress in many aspects of the tuberculosis, TB, programme, we have seen a slight rise in herd incidence rates. The work of the TB forum will be very instructive as to the ways and means to achieve our ambitious goal of eradication by 2030.
Turning to programme B, a total of €863 million is available in 2019 to be paid almost exclusively to farmers, with €640 million allocated to EU co–funded rural development programme, RDP, schemes. That is in addition to the €1.2 billion in funding from the EU for Pillar 1, the basic payment scheme. These figures reflect the mature level of RDP implementation. The allocation for our agri-environment schemes is lower than 2018, at just over €228 million. The reason for this is that an exceptionally high level of expenditure in 2018 of €232 million on the green low-carbon agri-environment scheme, GLAS, and a further €22 million on other schemes succeeded in removing the large hangover of 2017 scheme payments and paying the vast majority their 2018 advance payments, hence reducing the funding requirement for 2019. The agri-environment options scheme, AEOS, and rural environmental protection scheme, REPS, are now virtually completed with only some residual payments due.
This support to farmers who deliver public goods and environmental benefits is vital. As well as the inherent environmental benefits involved, this investment enhances our sustainability credentials, which are invaluable as we serve increasingly demanding and knowledgeable customers at home and around the world. In that regard the allocations for organic farming schemes and locally led schemes are increasing. We will be investing in three highly significant local schemes concerning the pearl mussel, the hen harrier and Burren farming in 2019, as well as a number of smaller and even more localised schemes. This work is very much in sync with the objectives of the recently published report of the Oireachtas Joint Committee on Climate Action and the whole-of-Government approach to ensuring Ireland’s transition to a low-carbon economy.
We have increased the allocation to the areas of natural constraints, ANC, scheme by a further €23 million to €250 million, restoring the scheme to pre-downturn levels. This year is the first year of the new ANC scheme, with land eligibility now designated according to biophysical criteria. The redesignation process has been lengthy and forensic and it arrived at a very reasonable outcome. On budget day I described this latest increase as a very important part of building our Brexit resilience by giving invaluable direct financial support to farmers with land in the many naturally constrained parts of the country. The average ANC payment of approximately €2,500 will be an important part of income for producers, many of whom are farming in challenging circumstances.
Another element of our Brexit response for 2019 is included in the B6 subhead, namely, beef sustainability schemes. This now includes both the well-established beef genomics and data programme, BDGP, and the new beef environmental efficiency pilot, BEEP. For 2019, the pilot has been allocated €20 million for farmer payments and another €1 million for weighing equipment. I am pleased that the application process for BEEP went smoothly and has attracted a very good level of applications. It will offer an immediate income boost for participants and provide practical guidance for the future viability of our suckler herds.
It will complement very well the BDGP, for which €46.5 million will be available in 2019. I have also increased the allocation for knowledge transfer to €25 million for the third year of the three-year programme.
Moving to the sheep sector, the sheep welfare scheme allocation for 2019 at €18 million will provide for the balancing payment from the 2018 scheme year and the advance payments for the 2019 scheme year. As I have mentioned already, under programme A I have provided more than €3 million for payments to farmers for sheep EID. The new system will significantly reduce record keeping for farmers and will result in a simpler and more effective sheep traceability system.
In terms of capital expenditure, I have maintained the allocation of €70 million for the targeted agricultural modernisation scheme, TAMS. I expect this to be fully spent as payment claims are being submitted on an ongoing basis, with more than €20 million paid already this year. Despite the uncertainty the sector faces, many farmers recognise the value of upgrading their equipment and improving their facilities, and we will continue to match them in their ambition and pragmatism. I am also increasing the allocation for the commercial horticulture scheme to €6 million, recognising the need for greater efficiencies and innovation in that sector in the face of the challenges already endured and those ahead. I welcome the fact that the level of applications to this year’s scheme exceeds previous years.
Turning to forestry, the level of new afforestation we achieved last year was substantially lower than target but I am hopeful that at least some of the reduced rate was weather related and that activity will pick up this year. A strong programme is crucial to our sector's contribution to climate change mitigation. By the same token, I am fully aware of the concerns regarding afforestation in certain communities and my colleague, the Minster of State, Deputy Doyle, has recently established a group to examine this matter and to report this year.
Many of the programme C allocations reflect the comprehensive approach to Brexit responsiveness and how that intertwines with the continuing implementation of the Food Wise 2025 strategy. It includes additional funding for capital investment by food companies, initiatives for artisan producers and further support for the prepared consumer foods centre at Ashtown. I have also made a substantial contribution to Teagasc's national food innovation hub at Moorepark, which is reflected in the €4 million increase in the capital allocation. These initiatives, fostering innovation and product development, have been given a greater focus by Brexit but are consistent with the direction of travel of Food Wise 2025. The implementation to date of Food Wise 2025 has positioned the sector to defend its market presence in the UK robustly and develop new markets. In that regard, the allocation for Bord Bia has been increased by almost €5 million and now stands at almost €47 million compared with €32 million pre-Brexit decision in 2015.
The extraordinary export success of our indigenous food sectors did not come easily or quickly. Maintaining and growing this foothold in higher value markets requires huge efforts in the face of stiff competition and challenges such as Brexit. In 2018, after years of work, we achieved a very substantial breakthrough in opening the Chinese market for bone-in beef and further deep work is needed to exploit that hard-won opportunity fully. In that regard, I will also be expanding my Department’s global footprint. My Department has eight agricultural attaché posts in embassies in the European Union and across the world, including in Beijing and Washington DC. I intend to expand this network by 50%, adding extra posts in the key locations of Berlin, Tokyo, Seoul and Mexico. Trade missions play an important role in market development. In 2018, I led missions to US, Canada, China, Indonesia and Malaysia. This year I have already visited Turkey in early March and I plan to lead Government agrifood trade missions to China in May, Japan and South Korea in June, and Algeria and Egypt in November.
I have also increased the allocation for the horse and greyhound fund by €4 million, a 5% increase to help with the work in promoting and supporting these sectors. I am pleased that the greyhound Bill has made good progress in the Seanad and I hope it will pass into legislation later this year. I hope that with its financial position greatly improved after the sale of Harold's Cross stadium, the sector will move forward with confidence. Horse Racing Ireland is investing heavily in new facilities and services and we continue to be a very important partner to the industry.
The zero allocation for Brexit resilience as presented in the Revised Estimates Volume 2019 in contrast to the €25 million in 2018 might give cause for concern. However, as I have set out, we have a very intense focus on Brexit, with an overall package of €78 million in funding distributed across a number of subheads, including the €7 million for staff and information technology to facilitate my Department's regulatory role. Moreover, the 2018 allocation for the future growth loan, which involved a contribution via the Strategic Banking Corporation of Ireland, SBCI, to the European Investment Bank, EIB, has just been launched, so the benefits of the investment in the loan funding will start to flow to both primary producers and processors in 2019.
Part of our Supplementary Estimate for 2018 involved the transfer of savings from various subheads into the World Food Programme, WFP, to allow for the earliest possible payment of our 2019 contribution to that programme. Accordingly, when taken together with that voted amount and a further allocation of €4 million from later identified savings, the total WFP contribution in 2019 will amount to €22 million. This is an increase of 10% on our contribution for 2018.
With respect to programme D, the provision for my Department’s seafood programme has been increased by €6 million, mostly by way of an increased allocation to the fishery harbour centres to a total of €27 million, and this will help fund vital investment in Castletownbere and Killybegs harbours. The budget provision will also allow the Marine Institute to commence the planned replacement of the 21 year old Celtic Voyager with a new 50 m modern research vessel The other significant change in programme D is the reduced allocation for the Haulbowline remediation project. This reflects the great progress made in 2018, resulting in the completion of the east tip remediation.
The majority of funding for Bord Iascaigh Mhara, BIM, is in respect of various schemes under the European Maritime and Fisheries Fund, EMFF, operational programme. This is fully operational, with a total of 19 schemes. The investment will fund a range of programmes, including capital investment in the seafood processing, aquaculture and fishing sectors to foster growth in production, value and employment, enhance sustainability and competitiveness, and support training, skills development and stakeholder capacity development. We continue to support the sector in what we all know to be a very challenging period.
I have not referred to another very important aspect of the work of the year ahead, namely, the negotiation of the Common Agricultural Policy, CAP, post 2020. Although it is not visible in the Vote, there is much work under way in my Department in preparing for the next CAP and we can discuss this further during the course of the meeting.
These funding allocations will assist us in focusing on competitiveness, innovation, new market development and environmental sustainability while responding to the uncertainty and challenge posed by Brexit. This is a brief overview of the range of measures that apply in the agrifood and marine sectors for 2019. I look forward to the discussion and questions from committee members.
I thank the Minister and his officials for coming in today to discuss the Revised Estimates. Will the Minister outline the key differences between the Revised Estimates and the Estimates provided after the budget? This meeting is happening against the backdrop of Brexit and, over recent months, a crisis facing the beef sector. Permission was granted from the EU to increase permissible state aid from €15,000 to €25,000 five or six weeks ago, but our beef sector in particular has been in crisis for a number of months. Many finishers have been losing their shirts. There must be immediate support for those farmers, especially those involved with finishing cattle who have lost significant money. It is affecting the sector as a whole, and unless there is some support from the Government and this Department in particular, the beef sector will be further undermined. The Minister has mentioned a number of times how welcome is the increase in permissible state aid. That is of no use unless we assist farmers. Has the Minister considered this and can we expect to see something immediately from the Department to provide support to the beef sector?
Will the Minister speak to the BEEP uptake? In his contribution he did not outline how many farmers availed of it, how far that number is off target and where we are with the associated budget.
I would also like the Minister to flesh out how the €1 million in associated estimates in regard to weighing and will be spent and to comment on whether it will be sufficient to ensure there is not a burden on farmers who are participating in regard to the cost of weighing.
In regard to the targeted agricultural modernisation schemes, TAMS, and projected spend in that regard, I note the current round is due to expire at the end of April and that uptake in regard to projects was very slow initially. In terms of the Department's future projections in regard to this scheme, is sufficient funding in place to meet likely demand in the future? In regard to the 2018 outgoings, was there an underspend in the Department's overall allocation and, if so, what happened to that underspend?
In respect of Brexit and preparations in this regard, the Department outlined plans last September to hire 116 veterinary inspectors. Earlier in the summer, it had announced that 300 veterinary inspectors would be hired. What progress has been made in regard to the hiring of those inspectors? I note that a few weeks ago, the Department advertised in the public press for private veterinary practitioners to indicate their interest to be available to work in the ports and points of entry in the event of a hard Brexit. I took from that that there has been no progress made in regard to the hiring of veterinary inspectors. I ask the Minister to provide further detail in this regard.
In regard to the Brexit loan scheme, which was finally announced last week but was initially announced under budget 2018 in October 2017, will the Minister outline what happened to the funding that was allocated in budget 2018 for this scheme? Was it used elsewhere or carried forward?
The Deputy raised a number of points but the critical one, which I think many in the agriculture community would acknowledge, is the challenge facing the beef sector, on which we had a construction debate in the Dáil Chamber last week. We are directing the resources available to the State in a targeted way to farmers to try to shore up falling incomes. As the Deputy will be aware, unfortunately or otherwise, the reality is that there is nothing I can do in respect of meat factories and the prices they pay. What I can do is ensure that whatever resources I have are focused in the most effective way to the sector. The keys areas of action are increasing payments under areas of natural constraint, ANC, introducing schemes such as the beef environmental programme and driving the adoption and implementation of producer organisations.
The Deputy asked where we are at with regard to the beef environmental efficiency pilot. There were 18,536 applicants, covering almost 450,000 weanlings. There is a significant level of interest in this scheme. As the Deputy will be aware, the intention in respect of the scheme is for individual farmers who have applied for the scheme to have their own scales registered, in respect of which there is a facility to do this online on the Department's website, or for them to be able to avail of a bank of weighing scales that will be delivered for the purposes of the scheme through a series of outlets around the country. Farmers will be able to borrow these scales to weigh their cattle and then return them. This is how the programme will operate. The intention is to deliver the scheme as efficiently as possible with the least amount of bureaucracy or administrative burden and to target whatever scarce resources are available into the pockets of participating farmers. To the best of my recollection, the cost of providing the scales is approximately € 1 million. The remainder of the money will go directly to farmers who are applicants.
On the issue of Brexit staffing, I know that-----
In regard to the funding allocation, what was the uptake in comparison with the target?
My understanding is 450,000 weanlings are covered. We do not have final figures but it will be in or around the €20 million budgeted for. We will not have the exact figures until later this year. The ambition is to pay this scheme in the current calendar year.
On Brexit staffing, on which the Deputy has been asking a lot of questions, we are trying to manage a situation as prudently and effectively as possible. We made estimates and were involved in a central case scenario early on and in more recent times in terms of the necessary staffing requirement to deal with a crash-out Brexit. In a crash-out situation, there will be an escalating requirement for staff over a period of time. I am certain that should that happen next week or in May, we will be able to fulfil our obligations in respect of checking on trade coming from a third country and facilitating trade that we export to what then will be a third country.
As I understand it, the current staffing complement is in the region of 120, comprised of a mixture of veterinary inspectors, forest inspectors, technical staff, clerical officer portal inspectors, agricultural inspectors and a range of administrative staff. This complement may increase to 230 within a relatively short timeframe.
The Taoiseach and the Minister, Deputy Creed, announced in early summer that 300 staff would be recruited. This figure was downgraded in September to 116. My recollection is that the staff complement of 116 was primarily focused on veterinary and sanitary and phytosanitary, SPS, officials. I am concerned that there has been little or no action in regard to follow-through in regard to recruitment of this 116 staff or the previously-announced 300 staff. Will the Minister outline what was intended in terms of that 116 staff and what has happened in this regard. The first we heard about private veterinary practices being asked to front up in regard to providing assistance was when the advertisements were published in the papers a few weeks ago. I have grave concerns that nothing has happened in regard to that 116 staff. Will the Minister clarify what was to be done in that regard and what has happened?
As the situation has been an evolving one we have been able to refine our requirement in terms of populating rosters to meet shift work and so on. For example, the Wexford facility will operate on the basis of two rosters and Dublin Port will operate around the clock, if I am not mistaken. We have been able to drill down into the granular detail around the staffing requirement. The overwhelming imperative is that whatever the Brexit date we are in a position to meet our legal requirements and satisfy the European Union in that regard. Rather than recruit a lot or direct staff, with all of the contingent responsibilities and liabilities that that would bring with it, I have been trying to meet this requirement from the point of view of the most financially efficient way to do it.
In doing it efficiently financially, we must also make sure we are doing everything necessary with regard to our legal obligations. We have worked through the detail of that around all of the border inspection posts and the type of staff that are necessary. We have refined our numbers requirement and I expect it will increase to some 230 staff. That is the figure we see as ultimately necessary but there will be some 120 staff in situ on 12 April. This involves redeployment of existing staff and new recruits. We have been working with the Revenue Commissioners in availing of some of the panels it has had, from which we have recruited some staff. I understand there are also some temporary contract staff arrangements being entered into so it is a mix of elements.
We are trying to make sure that we are not entering into long-term financial obligations for a situation that might not happen. It is the case, however, that a crash-out and a requirement for these staff is more likely now than it was some time ago when we were planning for the central case scenario. I am satisfied that we will be able to do everything that is necessary on the dates in question.
I will give the Deputy some data. Dublin Port, for example, will be staffed on a 24-7 basis. At peak times in Dublin Airport the Department will have some 40 staff on the ground to do documentary and physical identity checks when dealing with the UK once it becomes a third country. As I said earlier, Rosslare Port will operate on two shifts per day based on ferry activity with ten to 15 departmental staff managing inspections for these operations across peak times. The outcome is based on what is necessary to meet the demand. I am satisfied that come 12 April, or any future date, we will have the necessary number of staff in place.
Is that primarily from reassignment?
Some are reassigned and some are new staff. I can provide the breakdown of that for the Deputy.
We have asked for the breakdown several times but have not got it.
As of today, 50 clerical officers and 30 veterinary inspectors are recruited and the rest currently are temporary contracts or redeployed staff.
Is that net recruitment? How much of that is replacement?
That is new recruits.
Yes, but how many people have retired or left the system in the same period? What I am trying to get at here is-----
Programme A shows the increased level of funding required because of additional staff complement. It is one of the areas where the budget is up. That is under the central case scenario. In a crash-out, the staff complement will be higher. We want to do this as efficiently as possible to avoid a situation where we have recruited contractually all of those staff and then find that the necessity did not materialise. Even as we stand here today that is a possibility. In a number of years' time I am sure there will be great fun before a public expenditure committee in the Oireachtas trying to explain what people in hindsight can say "Sure they were never going to crash out". We are trying to do it as financially efficiently as possible. This is why some of the staffing is through redeployment, some is using former staff on short-term contracts and some involves additional staff. It is a mix of opportunities.
Of course it has to be done as efficiently as possible and we have to ensure all the bases are covered. The point I make, and which I have made on several occasions before, is in the way the Minister and the Government indicated the way it was going to happen. In the front page headlines the day after the Cabinet meeting in Derrynane last year, the Minister told the whole country not to worry-----
I would still say that.
-----and that the Government's own plans were to recruit 1,000 new recruits, 700 of whom were to be Revenue and 300 of whom were to be with the Department of Agriculture, Food and the Marine. That was in July but all of a sudden in September, the Minister was a bit more low key when he announced that actually the Government was going to change its mind and that the figure was going to be reduced from 300 to 116. There has been no follow-through on that. Now the Minister is doing it in different ways. My point is the way the Minister had told us that he had all these plans in place and that he would follow through. There was no follow-through. In hindsight the earlier announcement looks very much like a public relations affair.
Headlines and figures were put out there but the Minister did not follow through on it and now he tells us that he is doing it very differently and using different means, be it deployment or other, and a small bit of recruitment.
That is simply not the case. I am aware of the headline the Deputy refers to, but I ask that he bears in mind it was in the context of a central case scenario which was a withdrawal agreement, a transitional arrangement and Brexit happening in an orderly way by the end of 2020. This scenario would have required rolling recruitment of staff up to that period in time. The Deputy is trying to make the case that because the envisaged number of staff for the 2020 deadline has not been reached by today - when there is a possibility of a crash-out - that in some way we are not prepared. I believe, without a shadow of a doubt, that Ireland is the most Brexit-prepared member state. There are enough challenges and uncertainty out there without fomenting uncertainty in this interaction. We will be ready in the most financially efficient way. Obviously there will be other people who have responsibilities around recruitment, across the HSE for example, with inspectors and so on in other areas of supervision and regulation to do with food businesses. They will not be recruited in this particular context but it will all be done to make sure we keep business moving and exports getting to marketplaces. The figures the Deputy spoke about were to the date at the end of 2020. The figures I have given to the Deputy are for what we are now planning: staff to be on the ground to deal with the necessary situation, should the UK crash out in the short term. This will increase and ratchet up. I do not think it serves any purpose for the Deputy to try to create uncertainty or doubt where we are ready to deal with what could happen, of which I am in no doubt, if the UK should crash out.
It is not about inserting doubt. I am simply holding the Minister to account for what he and his Government had outlined. If he looks back at it the Minister will find that it was very much presented in the context of 29 March and being ready for that.
Deputy McConalogue had two further questions on TAMS and Brexit loans.
On the Brexit loans, members will be aware that in October 2017, we had an allocation for our 2018 budget, which was drawn down in 2018. The benefit of that is in the loan scheme launched last week. People will apply to the Strategic Banking Corporation of Ireland, SBCI, to get approval as qualified to apply for the loan - which means that the applicant is Brexit-impacted as a primary producer - and for the proposed works. The applicant then goes with that to the approved pillar banks.
Is the Minister saying a criterion is that the applicant must be impacted by Brexit?
Yes. I have said before that it is a long running story, certainly longer than we anticipated, and it required primary legislation because of the involvement of the European Investment Bank. It was much more complicated than our previous foray in this area with the working capital scheme or the other €300 million working programme for small business. The fund is there now and it is welcome because it plugs a gap in the market that was not previously serviced with regard to the unsecured borrowing of money over seven years. It is very important that it is there.
The Deputy's other question was on TAMS. The allocation for TAMS this year is €70 million. We are drawing down in the region of €2 million a week now. To date some €20 million has already been paid out this year. We will need to keep this area under constant review.
In terms of applications, there is growing demand in this area. According to the most recent figures, we received more than 19,000 applications under TAMS. It has the exact same profile as any of the previous schemes in terms of being slow to start and then peaking. We are moving into that space now. The allocation for TAMS for 2019 is €70 million. It will require vigilance to ensure we process all applications and keep them moving along as quickly as we possibly can with farmers being paid.
I thank the Minister and his officials for the presentation. I have a few bits and pieces about which to ask, but everything will be set against the background of Brexit. I sometimes despair listening to people wanting us to not second-guess, but fourth-guess, what will happen across the water when the people there do not have a clue what is happening. It is a nonsense. This is an Irish tendency, where one has to be the leprechaun to jump into the middle of the sea and try to guess what will happen. Let us see and let us keep nice and cool, and calm. I get irked when I hear that type of nonsense.
I am worried about basic issues. In areas of natural constraint, ANC, the Minister has provided €250 million in 2019, a €23 million increase. The biophysical parameters are now involved. Of course, it has gone to an appeals process. All appeals must be in by 8 April. With this two-stage process, is there any indication of the likely number of appeals? There is only a week left.
The Minister would expect me to mention beef, given where I come from. I will mention a few factors here because I have an interest in this issue. A big issue is the grading issue on the kill lines in factories. I happen to be out meeting farmers. It is great to get out to get a bit of fresh air and talk to the Westmeath farmers, many of whom are involved with the beef farmers' forum and beef group. They are fairly hot on the ground and they are not fools. They know there can be no magic wand. They are intelligent people. Yesterday, I spoke to a man with 250 cattle and 150 sheep who well knows that. This mechanical grading is just not doing the business. This man said that they are able to put a digital machine in the air which will tell where one turned the course of a river. He asked why we could not do so in a factory and make sure that farmers get paid. I understand the grades were wrong on a number of occasions. Were there a number of cases where they were wrong in four out of every ten animals? Maybe I am wrong but that is what I hear on the ground. There is grave concern about this and it has to be tackled. It is no use having a beef forum and being nice to those factory boys coming in. One has to give them a few punches when they are in. The legal tolerance - maybe I am wrong and the Minister has senior officials who know all this - for beef grading machines in meat plants is approximately 60%. We should get that up to even 85% or 90% - I accept we will not have 100% - as that is a lot of money going out the door. There are significant losses in that. I understand trials are taking place with digital cameras, LED lights, etc., but how far advanced are they? Is there a plan to deal with those perceived issues? Maybe they are only perceived. I hear anecdotally about grading anomalies in the factories and between factories and it is a cause of concern. Things are bad enough on the ground, as I will illustrate, but if we could intervene, we could make a positive contribution in trying to deal with those issues. We brought in grids, for example, and if they are not working, they must be re-examined. We cannot stick to the same old line that they are grand in respect of this and the quality price system, QPS. We must sort those out. That is from where I am starting.
I spoke to another farmer yesterday. He said it appeared that everybody was getting a cut out of it. All the intermediaries, between farm and fork, are getting a cut and the only ones who are not getting a cut are the producers. The processors are getting plenty of cuts - the Minister need not worry about that. They are cutting people any chance they get.
Mr. Martin O'Sullivan was a colleague of mine in the 1980s, which is a long time ago. He did a study, which is well worth reading, taking the Teagasc farm management survey on suckling and cattle rearing on an average-sized farm of 87 acres. Between 2013 and 2017, the return on that farm, including subsidies, was €11,063, or €130 an acre. Let us not forget the subsidies are included. Between 1998 to 2002, the average income was €12,228, some €1,200 more. In the meantime, there was inflation of 37%. In order to stand still, one would need €16,752. That tells members, who themselves are involved in a bit of this and are interested, one would need €6,700 more to stand still on the same farm, the same number of animals, etc. Of course, the subsidies are 105% profit. Without the subsidies, it would be a negative wash-out.
One should bear in mind that Westmeath is a fulcrum of suckler farms. These are farmers who do the proper beef. They are not into the dairy stuff. Theirs is the real stuff. I spoke to those farmers yesterday and one man said to me that he would be better off if he let the land or put much of it into forestry. He said a man up the road was going into dairy an that he could let it to him. I cannot issue enough warnings about this rush into dairying, particularly by those in the beef dry stock area. It might sound great but, Lord save us, it involves a level of investment, work and everything else. Apart from that altogether, I never saw a balloon going up that did not come down. That is what worries me. That is the story. The return is €130 per acre and all that is all subsides.
The policy over the years must have been devised by Gay Byrne as there is a little for everyone in the audience. That is a problem. We must make our minds up on a policy direction and see where we are to go. The next round of CAP measures will be the defining time. It will be time for the Minister to make his mind up because he cannot represent everybody. If the Minister wants to have a policy objective to make sure we sustain the maximum number of farmers, something will have to happen.
The reason I raise that is there was a vote in the European Parliament today about convergence. If I am correct, it opted for 75% convergence, which is Big Phil's story, as opposed to 100% convergence, which is the left-wing story.
It left it at 100%.
Did it give the 100%?
I heard it was 75%. Am I correct?
It is 100%, I think.
I would be delighted if it was 100%.
It is 100%.
That is even better. That is a bit of good news. It will certainly benefit a significant number of farmers with low-value entitlements. We should not be shirking or afraid. There will be many people out evaluating. We will have the farm organisations thundering in. Let us protect those for whom this was geared. Look at the objective of the Treaty of Rome and the Common Agricultural Policy. The two key objectives of the policy were cheap food for the consumers and sustaining the maximum number of farms on the land. This is a chance for us to reach out to those objectives.
Many farm organisations are calling for various new measures to be taken in TAMS. Is the Minister open to that? I do not know if the figure is €70 million or €20 million.
It is €70 million.
It is a good sum of money and it is one of the best targeted schemes. Is there anything the Minister can do to help young farmers? He will have to grab the bull by the horns and think about stretching into a pot to help young people come onto the land. An early retirement scheme will have to be looked at again and there will have to be a farm insulation aid grant for young farmers. The amounts were only between €8,000 and €10,000 but they were very important.
I always look to see how much tuberculosis eradication costs. The Minister knows my view on that. We have pious aspirations about 2030 but I will have the Shannon drained before that and TB will still not be eradicated. I do not know where we are going to go with this. Some €5.5 billion has gone since it started and another €1 billion is planned. We will have to look at new ways of dealing with this as it is taxpayers' money. New Zealand has achieved the objective and they set out to do something about it in Australia too. Professor Simon More gave us a very detailed talk about it but he also delivered some home truths. I understand a TB group is looking at an evaluation of the situation and the various methods that could be used. I do not have a solution but going down the same way of dealing with it between now and 2030, or even 2050, will not work. Somebody will have to change something.
I will deal with the last point first. I could not agree more with the Deputy that if we want to achieve the objective by 2030, doing exactly what we are doing now will not deliver. It is an ambitious target but it is probably more doable than draining the Shannon. We have spent €5.5 billion in today's money and the plan is to spend another €1 billion between now and 2030, by which time we hope to have eliminated TB. It is not that there will be no incidence of TB but we will be below a certain threshold and thus deemed to be TB-free for the purpose of international trade, which will bring its own benefits.
I have established a working group under the chairmanship of Michael Cronin and the issues it is considering are raising the pulse rate a little bit. I have deliberately refrained from commenting on any of those issues because it is respectful to the group to allow it to bring forward its proposals. Representatives of the farming industry are also involved in it. The challenge is to step outside our comfort zone and embrace new positions on the basis that they are epidemiologically sound and based on science.
The Deputy will see that allocations this year are up, which does not reflect an increased incidence, though there is a marginal increase, so much as the fact that when a herd contracts tuberculosis now it is more costly because herds tend to be bigger. The choice is to continue plodding along at the rate we are going or to do something more radical and try to achieve our ambition by 2030. In that sense, we have to stop thinking all the time about the 3% which get TB and instead ensure the 97% do not get it, while looking after the 3%. Studies are being done about the impact on deer and we have a badger vaccination programme. We are spending an awful lot of taxpayers' money but, to make the quantum leap we need to make, we need to do different things. This committee has had interesting engagement with veterinary personnel and academia, which has been thought-provoking and challenging, but we have to be prepared to listen to different voices too, including those who might suggest doing things somewhat differently. We also need to look at international best practice and how other places have dealt with the issue.
The Deputy also asked about TAMS and the possibility of new measures. Deputy Cahill has previously referred to underpasses and they are always looked for but the scope for manoeuvre is extremely limited. Some of the early approvals under TAMS were expiring, having originally been three-year approvals. We changed the scheme to 12-month approvals, with six-month approvals for plant. The fact that the early ones were expiring gave us some wriggle room, which we used to announce that we would extend the availability of TAMS funding for solar panels in the livestock sector, which was previously confined to the intensive pig and poultry sector. This is significant and there is significant potential in it but the scope to reopen the scheme is limited as the budget is finite. It is not that extra money was made available but that some money was not being used, meaning we could include something else in the scheme.
The debate on the Common Agricultural Policy, CAP, is picking up speed and there were votes in the European Parliament yesterday and today, though I am not au fait with the latest results. A trend is emerging towards greater convergence. There are disparities between people who get very large payments and others who get minimal payments and are forced out of farming or into part-time farming. There is now a momentum to address this. I support doing so but we need to be careful of the law of unintended consequences. Last time, people had low gross single payments but they may have received a high payment per hectare. Others had large tracts of land but got a lower payment per hectare than the average. One person may have got €300,000 and saw the amount go up while another, with a payment of €10,000, saw it go down. We need to avoid that situation.
There is an inevitability around convergence. Apart from happening internally it is, unfortunately from our point of view, happening externally, with other member states saying they want a greater share of the Common Agricultural Policy budget. This is challenging for us and that brings me to the overall point, which is that the most important challenge we face is in securing an adequate budget. We need to encourage young farmers and we do so with top-ups, TAMS, the national reserve, the tax system, stock relief and a new €25,000 credit for succession partnerships, but the best thing we can do for them is to encourage them to see a return for their commitment to the sector. The age profile in Irish agriculture shows that the youngest are in dairy while the oldest are on the beef side and that tells it all. Young people do not see the beef industry delivering for them in the long term and that is part of the challenge.
Part of that involves greater equity in the payments and convergence is part of that process.
The Deputy asked about the ANC scheme. More than 1,500 farmers covering 760 townlands have lodged appeals and the closing date is in one week. There is a very capable appeals panel in place to deal with appeals. This was a challenging exercise. It is critical that people tick the box for the ANC scheme when filling out the basic payment application form. Even if they are excluded under the current revised arrangements, they may succeed following an appeal.
Is there a timescale for the completion of the ANC appeals process?
The deadline for submission of an application is 8 April.
What is the timeframe after that?
We hope to deal with the appeals as expeditiously as possible. I have not set a timeline for doing so. I want to get this right rather than having it rushed.
Deputy McConalogue spoke in detail on the preparations for Brexit and I will avoid duplication if I can. Last week, a Private Members' Bill was introduced in response to the crisis in the beef industry. A large amount of beef is exported to the EU market. There is very little recognition of how dependent the Dutch and Danes are on the UK market. In the case of a no-deal Brexit both countries will seek a home for their products, which will have severe implications on the beef and pig sectors here. There has not been much discussion on that matter.
The small number of farmers left in the pig sector have gone through an horrendous 18 months or two years. It looks like the outbreak of swine flu in China will come to their rescue and, hopefully, result in increased pig prices. The swine flu has been reported in China for about six months and it seems to be having an impact on pig production in China. The pig industry will disappear shortly if something does not change.
I welcome the presentation made by the Minister but I am disappointed it did not focus more on live exports. Only a small number of cattle over 12 months are being exported live at the moment. Deputy Penrose spoke about farmers' dissatisfaction with the grid. The only way to get competition among processors is through live exports. When we kill almost 40,000 cattle per week processors do what they like with the primary producer. That is what has happened for the past six months.
Another issue is the number of cattle the factories are producing. The Competition and Consumer Protection Commission, CCPC, must examine this issue. For two months, nearly 20% of the kill has been factory-owned cattle. Factories can manipulate the marketplace and control the price they pay to farmers. In the past five years, we have not seen beef prices increase due to scarcity because the factories are now able to control the market and put their own cattle into the system. In the past, cattle prices always rose as the end of the beef fattening season in the sheds approached but that no longer happens. The CCPC is well able to tell farmers what they can do but it is slow to get involved in the monopoly operated by the meat factories. That must change and it would give farmers some confidence to see some movement on the issue.
With regard to the grid, the way in which the flat classification works has changed in recent years. Cattle that were classified as grade 4 in the past are now definitely being classified as grade 3, while grade 3 cattle are being classified as grade 2. These changes in classifications should not happen if we want farmers to have confidence in mechanical grading.
On veterinary inspections, the Minister stated the meat inspection service will receive a substantial increase in funding. What was agreed following the strike in the sector and how much will the agreement cost?
Deputy Penrose spoke about the 2030 target for eradicating tuberculosis. Last Thursday or Friday, a farmer told me that his whole herd of between 180 and 190 dairy cows was to be depopulated. The first question he was asked was whether deer had been on his land. He replied that deer were constantly coming out of the plantations on to his land. A fortnight ago, he had a TB test done on his farm and his dairy herd was declared to have TB. Herd depopulation has occurred a number of times in County Tipperary recently and the common denominator has been deer encroaching on the land. Until we focus on the role deer play in the spread of tuberculosis, we will not get on top of the issue. There are people in Wicklow who have chosen not to keep cattle or bovine animals because they could never clear their farms of TB. Another bunch of farmers in the Killoscully area of Tipperary has heavy plantations and, unfortunately, their herds are all constantly locked up with TB. It is the same story in Rossmore. The vast majority of TB outbreaks in County Tipperary occur in areas frequented by deer. We must recognise that fact. A cull of deer or tests on the deer population would be very expensive but until we address the issue, we will not make progress in reducing the incidence of bovine TB.
The Minister referred to the working group on tuberculosis and the 3% of herds that will be affected by new restrictions introduced for cattle movement and the possibility of indicating on signs at marts how long it has been since a farmer last had a breakdown done on TB. Farmers will feel very disgruntled if no restrictions are applied to the movement of the deer that are causing TB outbreaks on their farms when the Department then undervalues the stock that leaves their farms. Discussions are needed before we bring in such restrictions on movement.
How many farmers are participating in the hen harrier scheme? How many of the farmers who applied to the scheme have not been admitted to it? It is grand to have a scheme up and running for the hen harrier. However, as I said when the scheme commenced, the barometer of its success would be if it restored the capital value of the land. The scheme has given some income to the farmers who have had their lands designated for the hen harrier but it has gone nowhere in respect of restoring the capital value of the land in question. Some land for planting was worth between €4,000 or €4,500 per acre but is now worth between €800 and €900 per acre because it has been designated under the hen harrier scheme. Until farmers are compensated to the extent that the capital value of their land is restored, the scheme cannot be deemed a success. How many farmers have availed of the scheme and how many applications have been refused? How many farmers have applied but were not accepted for the scheme?
The appeals process for the disadvantaged areas scheme was mentioned. I presume the Estimates make provision for successful appeals. When does the Minister expect the appeals process to finish?
The Minister spoke about young farmers and the different incentives available to attract young people to the farming profession. A scheme for young farmers is essential. We all know the figures on the age of farmers, which make frightening reading. A cap has been placed on the amount of incentives a young farmer can get. Given the increase in stamp duty to 6%, this cap will have a serious detrimental effect on the transfer of land. It restricts a farmer's access to stock relief. The Minister is shaking his head in response. I have tabled questions to the Minister for Finance and unless his answers are incorrect, the cap will have a serious detrimental effect on the incentives that can be availed of by young farmers. At first glance, €70,000 sounds like a big figure. However, if stamp duty of 6% applies on a farm of 150 acres, a young farmer will well exceed the ceiling. The cap will not allow stock relief or any of the tax incentives the Minister mentioned.
This barrier has to be re-examined. If I am wrong the Minister for Finance is wrong in his replies to me also, but we can discuss that.
The Minister mentioned TAMS, which I had brought up previously, and getting underpasses eligible for TAMS. There would be very significant demand out there for such a measure. Traffic flows on rural roads are increasing and herd sizes are also increasing. It would be good, if it was at all possible, to have underpasses incentivised. I could go over other items in the Vote but those are just the points I wanted to make. I await with anticipation the Minister's response to me on the €70,000 limit to incentives for young farmers.
I will try to deal with those. A lot of questions were asked there. On deer and TB, it is my clear understanding that where farmers or communities raise the prospect of deer possibly being a contributing factor to a TB incident, the Department's local veterinary office is quite prepared to have deer samples taken in the local laboratories. It is not as though the Department is turning a blind eye to the deer issue at all. In fact, in most of the cases the deer are found not to be the causing factor. We do, however, have to be open to the possibility of deer being a contributing factor.
The culling of deer is a matter for the National Parks and Wildlife Service, but it is open to farmers whose lands are overrun by deer to apply to the National Parks and Wildlife Service under section 42 of the Wildlife Act for a licence to kill deer. This is different to a cull in a national park. It would be a local cull on the basis of incursions on a regular basis. The National Parks and Wildlife Service deal with this and licences to kill deer are issued.
On the issue of hen harriers - I can get more detail - but all applicants will be included in the scheme by April or May this year. Everybody who wanted to be in the scheme and who has applied will be in the scheme. All applications are not in yet but from a recent engagement I had with the project team I understand that they will take everybody in.
Are people being refused on the basis that their land has not been inspected?
I have been informed by the project team that anybody who has applied who has not yet been taken into the project will be taken in by April or May this year, that is, within the next month or six weeks. My information is that everybody who has applied and wants to go in will go into the project. I believe that is about 60% of the eligible area designated for hen harriers.
On areas of natural constraint, ANC, appeals there is budgetary provision for ANCs of €250 million. The eligible applicants will be divided by the pot of money. That is how it happens. The average payment currently works out at approximately €2,500.
With regard to the €70,000 limit on incentives for young farmers, there has been many conversations in the Department with farm organisations, with Revenue and with the Commission on this matter. The figure of €70,000 was not plucked out of the sky in the 2018 or 2019 budgets. The figure has been there since the current CAP iteration. From engagements we have had, I am satisfied that there is an appropriate interpretation now being taken by Revenue on matters to the benefit of farmers. If the Deputy finds this is not the case I would be interested in hearing it. That is the engagement I have had and I have seen commentary to that effect also from farm organisations.
I have a practical example I can bring to the Minister.
Take it up with Revenue first and if the Deputy runs into trouble he can come back to me.
Revenue is looking for its money.
That is my understanding of it.
Reference was made to temporary veterinary inspectors. The increase in the allocation is €2.75 million. Members will be aware that there was a situation, which was highly unsatisfactory, where we had industrial action. That has been resolved and the allocation is up from €18.2 million to €21 million, an increase of €2.75 million in the 2019 allocation.
Deputy Cahill spoke about the cattle grading grid. Different people want the grid to be revisited for different reasons. I know the background that Deputy Cahill has come from in making this point. While some farming organisations have a particular view of the world, other farming organisations have an entirely different view of the world but want the same thing to achieve different outcomes. I have made the point that the grid is not a Department of Agriculture, Food and the Marine grid. The grid was facilitated by the Department through the loaning of expertise. The grid and the payment from the grid is an arrangement between farm organisations and the meat industry. If our expertise is requested again we would be quite willing but there is no agreed position on this matter between farm organisations as I understand it.
Deputy Cahill also spoke about live exports and I am glad that he did. We have different views of the world. I take the view that live exports are important. The surest way to guarantee that live exports continue is by absolute vigilance on the welfare issues around live exports. We are adamant and insistent on that. In 2018, Ireland exported 246,000 head of cattle, of which approximately 160,000 were calves. To facilitate the calf exports we reduced the levy from €4.80 to €1.20 per calf exported. In so doing we also brought in the calf exporters and said that they were the beneficiaries to the tune of almost €750,000 just on the levy alone. I engaged directly with them last July - if my recollection is correct - and there has been ongoing engagement with them by the Department since then and before that. I have also engaged directly with them every year since I was appointed. In the middle of year I met them because we knew the issue of additional calves in the system was coming down the track in the spring of 2019. We asked the exporters to work together and with their contracting lairage providers in France to make sure the issue could be dealt with. I regret to say this did not happen. We are, however, committed to live exports. I was in Turkey recently on a short mission in respect of live exports. That is an important market and I will also be going to some north African markets later in the year. We see them as hugely important, and not just for the calves. Obviously calves hedge off a problem later but there is also the export of weanlings. We certainly remain committed to that.
On the pork issue, it has been a horrendous 12 to 18 months for those in the pig sector. On the basis of every cloud having a silver lining, farmers may be pinning their hopes on the incidence of African swine fever, which may mean a rise in prices internationally. Deputy Cahill referred to the market in China and I am aware of the difficulties happening there with African swine fever. I hope this happens but I am not in the business of predicting what will happen with prices. I hope that what the Deputy referred to may happen.
As for beef in the context of Brexit, the Dutch and the Danes in particular, the Deputy's point is true and undoubtedly the case. In volume of exports to the UK market the Dutch would be really up there. I believe that 11% of the Netherlands' total agrifood export offering goes to the UK, while it is 40% of ours. In value terms, however, it is about the same. Ireland certainly will not be the only ones looking for support but given the volume of product we put into the UK market, one of our arguments to the Commission has been that we need to contain the issue in the UK market or the contagion would spread into all other European Union markets. We would look for supports for our industry to keep their products in the UK market until such a time as we negotiate a comprehensive free trade agreement, which we will. Hopefully this will be by the short route rather than the long, circuitous route of a crash-out and the carnage that goes with it.
Certainly in the event of a crash-out and a package being offered, we will not be the only ones looking for support and nor will beef be the only sector looking for support. We have laid a very solid foundation in this regard, however.
I thank the Minister for his contribution so far. I do not have the same intimate knowledge as other members, as I am not from a farming community. Looking at the documents the Minister has supplied to the committee, there is no 2018 output. There is a list of targets but no outputs. We have no way of gauging how the Department has performed on any of the parameters. It is regrettable because our view of the Minister's performance is based on outputs and our own knowledge. Any Joe Soap would see there is nothing here on how the Minister is performing on any of these figures, which is disappointing. Anything I say will be gauged in this regard.
The key outputs in programme A include the number of food safety and hygiene inspections carried out. In 2017 the outturn was 3,657 and the target was 9,400.
Where is that?
It is on the second page with regard to programme A for 2017. We have a target for 2018 but no output so we have nothing with which to compare it. The target in 2017 was 9,400 and the outturn was 3,600, which is well short. How do we know that 2018 was in any way on target? We do not have the figures. Perhaps the Minister has them.
With regard to programme B10, forestry and bioenergy are combined together and there is no way of knowing how they break down. The 2019 Estimate is for €81.8 million but we have no way of knowing how this breaks down between forestry and bioenergy and with regard to Coillte. I am interested to know whether the Minister can expand on this. With regard to the metrics, in 2017 the target for the number of hectares of new forestry planting was 7,100 and the outturn was 5,500. We do not know the numbers for 2018 or 2019 in order to make a comparison. With regard to the number of herds participating in the animal welfare scheme, the target was 33,000.
What is that figure?
I am discussing outputs under programme B and the number of hectares of new forestry planting.
I have that.
There is also the number of herds participating in the animal welfare scheme for sheep. The target was 33,000 and the output was 19,000. The target for 2018 was 23,000 but we do not know anything about what the output was. In programme D, with regard to fisheries, which is the largest expenditure group in the 2019 Estimate, the figure is €42.488 million.
Is that D3?
Yes, with regard to fisheries. I would like a breakdown of what that €42 million for 2019 accounts for. With regard to the outputs for the number of aquaculture development licences under programme D, in 2017 the target was 235 determinations and the outturn was 109, which is approximately 50%. How do we know how many were done in 2018? We have a target figure but we have no information on the output.
I apologise Deputy, we did not send the outturn for 2018 but we sent whatever documentation was asked for. We can send the outturn for 2018.
With respect, it is a bit rich to have these figures and not have the outturns. We should not have to ask for them.
This is the 2019 Estimate. It is not 2018.
Yes, but how can we know what the Estimate is? The 2017 outturn and targets are there.
I will get the Deputy the outturn. My apologies. I might have missed a few of the Deputy's questions but I will try to deal with them all. He asked about fisheries under subhead D3 and the number of European Maritime and Fisheries Fund applications. There were 17 in 2017, 19 in 2018 and 19 are anticipated in 2019.
There is €42.488 million for the 2019 Estimate for current and capital expenditure under subhead D3.
With regard to subhead B10 on forestry, the Deputy asked about the level of afforestation. The number of hectares of new forestry planting in 2017 was 5,538 ha. The target was 7,140 ha. In 2018, it was 4,025 ha and the target was 6,605 ha. For 2019, the target is 6,900 ha. We have been missing the target substantially. The year 2018 was exceptional in the sense that part of the reason we missed the target was because of the weather. There were weather-related issues in 2018.
The weather was just as bad in 2017.
Because of the declining performance, we conducted a mid-term review of the forestry programme. We have revised the level of grant aid available for various species mix. All of them have increased. We hope we can get the targets back on track. This is very important. It was the rationale behind reviewing the operational programme for forestry. It remains to be seen. There is a narrative, as the Deputy is aware, in certain parts of the country where forestry is considered to be a dirty word. This is unfortunate. Deputy Martin Kenny is here and we have discussed this issue previously. There is a hierarchy of objectives that we need to meet, one of which is climate change. Trees are a critical part of the solution. I am not saying they should be concentrated in any given area. Apart from the climate obligation, they also bring a number of other benefits in terms of employment and income that is tax-free for 15 years. There is also employment in timber processing and downstream businesses. We could collectively do well to consider how we could work to promote forestry. Last week, I deliberately made the point in the Golden Vale and Tipperary that trees should not be the burden of any particular community to carry. Every farmer and every region should be obliged to consider tree planting in some shape or form. It is interesting we are having this discussion during National Tree Week. We have been missing our targets significantly. Did the Deputy raise another issue?
I asked about the animal welfare scheme for sheep.
Funding for the sheep welfare scheme in 2017 was €1.9 million, in 2018 it was €1.8 million and we are budgeting for €1.8 million in 2019. It is a demand-led scheme. If it is exceeded we will pay but we are basing our budget on the previous year's applications. It is true to say the number of ewes in the country is more than the number of applications we receive. This is unfortunate because it is a sector that could do with support and we have been happy to introduce the scheme. We have based our provision for 2019 on the take-up of previous years.
Subhead B10 relates to forestry and bioenergy. How is that broken down?
It is practically all forestry. There is not much of it for bioenergy. We have a pilot scheme-----
Is the name just added on to it?
There was a scheme previously in the bioenergy area which has been practically phased out, but there are some legacy payments relating to it. That is why the name is there. Obviously, the area of bioenergy is something that is under-----
The word "forestry" should just be used.
There is a Brexit heading in this under which there is no provision because it is a legacy heading from the previous year in terms of the loan scheme. There are a host of other provisions across all the subheads dealing with Brexit in various guises. Sometimes the subhead can be confusing. It is not deliberately so.
I have a question on programme A and the number of food safety and hygiene inspections carried out in 2017. There was a target of 9,400 and 3,600 were carried out.
My information is that the number of food safety and hygiene inspections carried out in 2017 was 3,657 and in 2018 it was 4,663. Then there were other controls. The controls associated with the issuing of health certificates for the export of meat and dairy products to third countries are considered to be other controls. They also encompass controls for new activities being carried out in existing approved plants, new approvals for new establishments, inspection visits in preparation for internal and external audits, the close-out of audits and inspection findings and ongoing specific checks for third country criteria. They amounted to 16,036 in 2018 and we anticipate approximately 16,000 of those in 2019 also.
If we had received the documentation laid out here, it would have been a great deal easier to look at what is being done. It is not unusual documentation. Basically, they are the outturn targets and the outturns. I am sure the Department has done this previously and has provided the information to us. I do know why it is not done this way. It is retrograde and makes it difficult for us in terms of looking at the information.
I take the Deputy's point.
Deputy Martin Kenny is next.
May I make a brief point?
On Deputy Pringle's point, is it possible to have further documentation over the coming days just for information showing the position? There is also the point I made about the 2019 Estimates provided after the budget. Is it possible to have a column on that as well to show if there are any changes between those Estimates and these Revised Estimates?
Deputy Corcoran Kennedy has indicated that she wishes to speak and the Minister must go to a Cabinet meeting at 8 p.m.
I will shoot through it as quickly as possible. I thank the Minister and his officials for their contributions. I wish to raise a few matters. The final page refers to the number of aquaculture development licence determinations made. People appeared before the committee a number of months ago to discuss this issue. They stated that there are very long delays in having licences issued.
To what page is the Deputy referring?
It is page 135.
It is programme D. The output target is 300 for this year, and in 2018 it says it is between 250 and 300. It is a strange output.
The output was 305.
Was that for 2018?
There is a target of 300. Some of those have been waiting years. I know there were delays in getting surveys done.
We stated that we would clear the backlog in three years. This year, 2019, will be the third year of it so we will have cleared the backlog relating to aquaculture licences.
That is fine. I am concerned about another issue. There is an increase in the amount of money for Bord Bia. It has increased to €47 million this year, which is a substantial amount for the promotion of Irish food abroad and so forth. As the Minister mentioned, much of the work involves going to what are, in effect, third countries, such as the US, Canada, China and so forth, and developing new markets. That is very welcome. However, many people would consider that many of those new markets, particularly those that are further away, are for our prime or higher quality cuts of beef. We all know that a large amount of the beef product produced in this country is the lower quality which ends up in manufacturing beef, and there is a large market for that in Britain. With Brexit approaching and the pressure that will come in respect of that product, is there an opportunity to emphasise marketing it in other European countries as a possible destination for it? What are the Minister's views on that?
Deputy Penrose said earlier that the idea of the European Union was to have cheap food. We need to get away from the cheap aspect, if we can, and talk about quality and affordable food. The idea of cheap food is our problem. Irish farmers are not in a position to produce cheap food. We are in a position to produce very high quality, affordable food to a standard that is well above what many other places can produce. We must market it in that way.
The Minister indicated that additional veterinary certificates and so forth had to be issued when product is being exported to third countries. What if we run into a difficulty with Brexit? While the intention is that we keep the market in Britain with whatever supports we can and that we will continue to supply our food there, will that impose an extra burden? We will have to produce these certificates because the UK will, in effect, be a third country if there is a crash-out, which is looking more likely every day. Having to issue all those additional veterinary certificates for export to Britain would impose a huge burden. They are not necessary at present.
The other issue is not mentioned here, but a review of the veterinary laboratories was carried out over the past year. What is the position with that? I recently spoke to in Sligo who are very concerned about the veterinary laboratory there. A number of laboratories are under review. What is their status and what is the position with the review? It is not in the Estimates but I would appreciate it if the Minister could give a view on that.
With regard to CAP, I understand that 2% of the overall budget at European level is being set aside for young farmers. There will be more autonomy coming back to the member state regarding how it deals with these matters. Is there an opportunity to increase that perhaps to 3% of the budget? We need to do that to facilitate more younger people getting into farming.
A large section of Pillar 1 of CAP, I understand it is up to 20%, will be for eco-measures. One of those eco-measures is something that arises regularly. Most of the farmers who contact us do so because of a problem with payments. The main problem is that their basic payments are refused due to penalties being put in place. The width of hedgerows was meant to be 2 m and when the photographs were taken from the sky, they were 4 m wide because they had grown out. That was not a problem for the farmer. In fact, it was good for the farmer, for the environment, for greenhouse gas sequestration and so forth, yet the farmers are penalised for it. The hedgerow area should be included in the area that would be allowed for Pillar 1 payments under basic payments. It should have been done at all times.
The other issue relates to TAMS payments. A considerable number of people who made applications for TAMS payments have been waiting a long time for their applications to be processed. One farmer told me he had made an application and it was accepted last October. He was told it would probably be May or June before he would be approved. If farmers have to wait that long to get the building work and everything else they want to get done for the season completed, it will not work for them. Can the Minister give his view on the length of time it takes to process applications, particularly those relating to farm buildings?
I acknowledge that afforestation and biomass were mentioned. I do not wish to have an argument about it, but one of the main aspects is the tax-free nature of forestry development, which the Minister mentioned. If every cent farmers made from, say, organic farming was tax free, there would be a lot more people working in organic farming; there would be labour involved, and it would keep communities alive. However, if forestry development was tax free, 100% all the way through the process, it would cause a problem. I do not mean that there should not be tax incentives, but the level of tax incentives is excessive.
On Bord Bia, €47 million is a substantial increase in Exchequer funding, although I do not think the Deputy was making any contrary point, given that he was asking whether we had received the best value for the markets Bord Bia was targeting. That is always a challenge and I am not a marketing expert, but the team, the board and the executive are very good. I have a lot of confidence in them and they do a good job.
China, South-East Asia and the wider Asian region have been targeted in Food Wise 2025; it is not a matter of the Department determining where food should be exported. Generally, it is due to the emerging middle classes looking westwards with their dietary habits and so on, which means that there are opportunities. As I understand it, the problem with the European market for beef, for example, to which the Deputy referred, is that while there is a market for premium cuts, it is not a growing but a static market. The growing markets for beef are in Asia. As an overall percentage, they are small but growing. We recently read in the newspapers that one of our major processors had secured a new contract to supply more beef. The Asian market is interested in all cuts, not just premium cuts. One of the contracts awarded was for part of the fifth quarter. I visited a restaurant chain, the name of which I cannot remember, on the previous occasion I travelled to China. In both Japan and China they seek premium cuts and those from the fifth quarter. There is a market for these products.
In many of these matters the function of the Department is to open markets as generously as we can negotiate. I may have misled the committee when I indicated that bone-in beef was sought in China because I meant boneless beef. We are always seeking to improve the terms and conditions of access, but it takes time. It is a matter of building relationships. We have been fortunate to have good relationships with the Chinese and the Chinese ambassador in Dublin who is leaving but who has been a great asset to us in that regard. We open markets, but the industry decides what it sells to the market. However, I understand that in China the full range of products is being sold. In the context of Brexit, we have always said the United Kingdom is the best paying market and people are slow to leave it, notwithstanding all of the challenges. It is important that other doors are opened for exporters, which is how we view our function.
On veterinary certification, we already have to certify our products for third countries to which businesses export. When the United Kingdom becomes a third country, although it has indicated that it will not request veterinary certification for our products, that may change over time as there may be regulatory divergence, where its standards may change and become different from those of the European Union. Therefore, it may require certification. We have factored this into our preparations in respect of the staff who will be required, not just in the Department but also in the HSE, local authorities, abattoirs and so on. They will all have a role to play in that regard.
On young farmers and the CAP, it is a significant challenge, but we invested 2% of our budget in the young farmer aspect of the CAP on the previous occasion and it met the demand. However, if there was to be growing demand or if it was considered greater incentives were needed, we could consider increasing it, given that these matters are up for debate.
One of the areas to which the Deputy referred was environmental measures and the climate becoming more mainstream, but that does not cause us to have sleepless nights. We were on that trajectory before it was popular, with schemes we have piloted and driven such as the green low-carbon agri-environment scheme, its predecessors and the beef data and genomics programme. It is welcome that the CAP may give us more policy levers to meet our climate change obligations.
While I note the Deputy's point on forestry, the overwhelming majority of the beneficiaries of the tax incentive are farmers, which is as it should be. I reiterate that we have a hierarchy of objectives to achieve, the most critical of which is planting trees for carbon sequestration. We need all of the incentives we can have because our level of afforestation, notwithstanding the challenges in certain communities, is far too low. There are income opportunities for farmers in that regard which far exceed anything they might make on marginal land, if not from anything else, certainly more than they would make from beef production at current prices. We need to retain the incentives and have re-examined and increased them, which is right in the context of climate climate and carbon sequestration.
On TAMS approvals, the case the Deputy made does not resonate because we have no backlog of approvals. The Deputy referred to an application made in October 2018 for which approval had not yet been received, but it sounds as though there might have been a documentation deficit on the applicant's part. If the Deputy wishes to supply me with the details, I will have the case examined.
The Deputy also asked about the laboratories.
As the Deputy will be aware, we commissioned a cost-benefit analysis, which we are studying. The laboratories are critical to our offering. There seems to be a conspiracy theory that, whether it be Sligo, Kilkenny, Athlone, Limerick or Cork - or Backweston which also comes under the microscope when we consider how effectively we deliver services - the agenda is to close or dismantle these services, but the contrary is true. They are critical to the agrifood industry and delivering services locally that are critical to the integrity of our exports and so on.
I thank the Minister and his officials for their attendance. I had a query about subhead B10, forestry and bioenergy, but it has been answered. My other question relates to programme C, policy and strategy. It appears that the spend is estimated to have dropped by 4% from the figure for 2018. How does the Minister account for this?
What projects are being funded under the Commission for the Economic Development of Rural Areas, CEDRA, that is, the rural innovation and development fund?
On food aid donations to the World Food Programme, how can the disparity between the Estimates for 2018 and 2019 be accounted for?
Why is the sum for the European Agricultural Fund for Rural Development estimated to be lower in 2019 than in 2018? I refer to programme E, appropriations-in-aid.
The Deputy asked about the capital element of programme C which she indicated seemed to provide for a reduction. If one removes the big ticket item, namely, subhead C10, under the heading, Brexit resilience measures, one will see that €25 million was drawn down in 2018. It was accounted for in budget 2017 under the heading of the Brexit loan scheme. That product is coming to the market and not replicated. It is, therefore, a significant hit to the subhead. In the case of the restoration of Johnstown Castle, for example, the cut of 48% is simply due to the fact that the work has been completed and there is no need to replicate the funding in 2019. Apart from that, it is quite satisfactory overall. In the case of the horse and greyhound fund, capital spending has been reduced by 3%, but current spending has risen by 6%. Overall, therefore, there has also been an increase in the horse and greyhound fund. Generally, the programme is in the black.
On the World Food Programme, as I understand it, in late 2017 we brought forward and made our 2018 allocation because the programme is always seeking earlier payment.
By the end of 2017, we had made our allocation to the 2018 World Food Programme. The same thing happened in 2018. We brought forward the substantial balance of our 2019 allocation and paid it at the end of 2018. It looks like a drop, but I am advised that, over a three-year period, our commitment is €70 million. The graph is certainly moving in the right direction. In fact, we are a substantial contributor to the World Food Programme's budget.
What was the last question?
It was about the Commission for the Economic Development of Rural Areas, CEDRA.
Will the Minister detail the projects that come under it?
They include female rural entrepreneurs, social farming, agrifood tourism and food waste reduction. I was at the launch in Galway of a very interesting company involved in a food waste initiative, or a food cloud. These are the initiatives envisaged under CEDRA.
The final question was about the European Agricultural Fund for Rural Development.
It is dealt with in subhead E13.
It is a little like the World Food Programme in that it is an accountancy issue. There was a late payment due from the European Commission in 2017. It arrived in 2018. Areas of natural constraint, ANC, payments are made in September and we usually receive the receipts from the European Commission in December, but, as I understand it, that will not happen in 2019. This has served to skew the figures somewhat, but I am advised that there really is no story to tell.
I thank the Minister.
That concludes the select committee's consideration of the 2019 Revised Estimate for Vote 30 for the Department of Agriculture, Food and Marine. I thank the Minister and his officials for dealing directly with the issues raised.