Select Committee on Enterprise and Economic Strategy debate -
Friday, 20 May 1994

Vote 31 — Agriculture and Food (Revised Estimate).

Chairman

I welcome the Minister for Agriculture, Food and Forestry, Deputy J. Walsh, the Minister of State, Deputy O'Shea, the Secretary of the Department, Mr. Dowling, and their officials to this consideration of the Agriculture Estimate.

The proposed timetable is as follows: from 10.02 a.m. to 10.20 a.m. the Minister will make his opening statement; from 10.20 a.m. to 10.35 a.m. the Fine Gael spokesperson, Deputy Crawford, will make his opening statement; from 10.35 a.m. to 10.50 a.m. the Progressive Democrats spokesperson will make an opening statement, and from 10.50 a.m. to 11.05 a.m. the spokesperson from the Technical Group will make an opening statement.

We will then consider the subheads under the various groupings. We will ask the Minister to respond to the group rather than to individual subheads. This would be a more efficient way of getting through the agenda. I hope we will be able to conclude by 1.30 p.m. Is that agreed? Agreed.

Minister for Agriculture, Food and Forestry (Mr. J. Walsh)

I am pleased to present the Estimate for the Department of Agriculture, Food and Forestry to the Select Committee. My colleague, Deputy O'Shea, and I look forward to dealing with any questions which may arise. I will sketch briefly the background against which the 1994 Estimate for the Department must be seen. I will then comment on a number of the subheads in the Estimate, which are of most interest to members.

Last year was a good year for Irish agriculture. The increase in aggregate farm income was pleasing following a particularly good year for farm incomes in 1992. As in most years, the growth in farm incomes was not distributed equally across all sectors. While prices for the main commodities — milk, beef and sheep — remained buoyant, pig prices were down substantially on 1992 levels and cereal volumes were adversely affected by poor weather conditions last year.

The performance of the sector in the first four months of 1994 has also been satisfactory. In particular, cattle prices have remained firm and are up on last year's levels, while milk prices to date are up. Prices in the sheep meat sector have been strong and I expect this trend to continue for the remainder of the year. However, the poor weather conditions over the winter and spring may have some adverse impact on cereal volumes this year. On a positive note, the level of direct payment, that is, premia, headage and arable aid should increase substantially this year.

Since this committee last considered the Department's Estimates, approximately one year ago, a number of important political decisions have been taken which will shape the policy environment for the agriculture and food industry until the end of the decade and beyond. These decisions have been taken at different levels, nationally, by our Government, at European Union Councils and, in the context of GATT, at world level.

Before going on to the detail of the Estimate, it is useful to reflect on these decisions and to indicate how the choices the Government made in the context of the Estimates fit into a coherent policy for the future. Earlier this year, the Programme for Competitiveness and Work was agreed between the Government and the social partners, including the farm organisations. The overall agreement contains a programme for competitiveness and rural development designed to help prepare Irish agriculture and the food sector for the more liberal trading environment which will arise from CAP reform and the GATT outcome. The main focus of the programme for competitiveness and rural development is, therefore, to increase the competitiveness of the core sectors of the agricultural economy as well as to encourage farm diversification and rural development measures.

The Programme for Competitiveness and Work has affirmed the overall strategy set out in expert group report on the food industry. This strategy underpins the measures in the sub-programme for the development of the food industry in the National Development Plan. Central to this strategy is the importance of investment in research and development and human resources, as well as the promotion and marketing of Irish food. As Deputies will have seen in the Estimates, provision has been made for the establishment of An Bord Bia, and the Bill to establish this body is before the House. I expect that An Bord Bia will begin functioning along the lines envisaged in the expert group report in the coming months.

At European Union level, 1993 saw the first full year of implementation of the CAP reform measures and 1994 will see further developments in the second year of the revised arrangements for the agricultural sector. The reforms represent a shift in the nature of agriculture income assistance away from market support towards significantly increased direct payments to farmers.

The Government has provided additional resources to ensure that headage and premia payments are made at the earliest possible date. I will speak about this in more detail when dealing with the relevant subhead.

The shift in the balance of support towards direct payments to farmers was a crucial element of CAP reform. A further crucial element was the set of accompanying measures — covering farm retirement, agri-environment and forestry. I am delighted that in 1994 each of these schemes will be in operation. I will refer to these later in the context of discussing the individual subheads.

A further EU development of major importance to the future of rural Ireland is the agreement on Structural Funds. Negotiations on Structural Funds with the EU Commission on Ireland's National Development Plan 1994-99 are now at an advanced stage and a Community support framework for Ireland will shortly be agreed. Parallel negotiations are ongoing in Brussels on the various operational programmes necessary to drawn down the funds. Over the six year period it is expected that the operational programme for agriculture, rural development and forestry, together with the food sub-programme which will form part of the industrial development programme, will attract total public funding of the order of £1.4 billion.

At international level, the GATT negotiations finally concluded late last year and the outcome on agriculture was quite satisfactory. The final agreement addressed almost all the concerns I had identified with the Blair House agreement and it provides a stable base from which the Irish agri-food industry can plan its future. That future will be a more competitive one but this is a trend which had been signalled and for which the industry had been preparing for some time. The task over the coming months will be to ensure that the agriculture agreement is implemented in an equitable manner which respects Irish agri-food interests.

I also recognise there will be, over the medium term, a move toward freer trade in agriculture and food products. We have to prepare for this by increasing the competitiveness of our industry, as envisaged by the programme.

These are the realities, at domestic, European Union and international level and in the food industry, which influenced the decisions my Department and I made on the Estimates. Details of the Estimates have been circulated to Members but because of time constraints, it is clearly not possible for me to comment on each subhead. Instead, I will focus on those which I think are of most interest to this committee.

As Deputies are aware, the administrative budget system applies in my Department as in other Departments. The administrative budget agreement for the 1994-96 period being concluded with the Minister for Finance set the basic allocation for administration and running costs for each of the three years covered by the agreement.

In the context of the 1994 budget I am pleased that additional resources have been made available to help implement the changes arising from the Common Agricultural Policy reform and the Single Market and to continue to implement information technology and the management and control provisions of European Union and domestic schemes.

My Department was not as advanced in its information technology during the 1980s as were some other Departments. However, significant progress in this area has been made in the past couple of years. I am very committed to ensuring that this progress in information technology in the Department is accelerated.

Indeed this has already been done; otherwise it would simply not be possible to meet the very significant demands of the new CAP. The reformed CAP involves a shift towards more direct payments to farmers. So effective information technology which will enable these payments to be made in as timely and accurate a way as possible is of critical importance to the farming community.

At the same time there will be an improvement in my Department's ability to comply with its regulatory obligations and in its accountability to the Dáil and to the European Union Commission.

I am also pleased to announce that in the administrative budget this year provisions are made for the refurbishment of part of Agriculture House. That work is expected to commence in the next few weeks.

The allocation for Teagasc for 1994 shows a 19 per cent increase on the 1993 outturn. The grant-in-aid for general expenses and for pensions together account for about two-thirds of Teagasc income. The 1994 allocation includes £2.5 million towards the cost of restructuring the organisation to allow maximum use of the opportunities arising from the increased Structural Funds and to address the key challenges facing the agriculture and food industry following CAP reform and the new GATT regime.

Effective information technology is also vital to the national effort for animal disease eradication. Under subhead C2, a sum of £42 million is included to cover the running costs of the bovine TB and brucellosis eradication schemes. The current running costs of the schemes are shared by the Exchequer and the farming community in a ratio of 1:2.

The contribution of the farming community is provided through the collection of disease levies. Revised compensation arrangements have recently been put in place. The new rates which are backdated to 1 January 1994 take account, for the first time, of higher yielding cows and the potential production of in-calf heifers in setting grant rates. The overall package has been unanimously welcomed by the farming organisations. The changes represent a significant improvement in reactor compensation levels and is a serious effort to enable herd owners to replace valuable dairy stock lost through a disease breakdown. The securing of European Union funding for the bovine TB programme will of course provide amplified resources needed for a significant initiative to press for a reduction in the level of the disease including the expansion of the vital research needed to bring essential new technology on stream. I continue to maintain a vigorous case for this funding and we can achieve success in our efforts to have additional resources put into the European Union veterinary fund. Meanwhile, a full round of testing on the national herd has commenced.

The horse racing industry will benefit by an additional £2 million above last year's record grant-in-aid of £4.3 million. With access to this generous funding the new Racing Authority will be well positioned to accelerate the much needed development of the equine industry.

On the greyhound industry, an additional £600,000 grant-in -aid is being provided to the new board of Bord na gCon. The board is currently preparing a strategy for the industry within which the increased funding will be used.

Provision of £1 million has been made for relief to horticulture and potato growers, who suffered serious losses arising from very heavy rainfall last summer. Payments commenced this week and the final cost of the scheme will be nearer to £2 million than the £1 million originally provided in the Estimate.

The overall provision of some £34 million for 1994 shows a 15 per cent increase on the 1993 outturn for on-farm investment. The allocation this year will cover ongoing expenditure under the farm improvement programme, installation aid to young farmers, and new schemes proposed under the national plan.

There is an increase in the provision for headage payments from £82 million in 1993 to £135.4 million in 1994. The 1994 Estimate also includes the additional £10 million provided in the context of the Programme for Competitiveness and Work. This is the first step in meeting the commitment in theProgramme for Competitiveness and Work that over the period of the programme, payments to farmers under the headage schemes will be made by October of the year in question.

It has been agreed in the context of the Programme for Competitiveness and Work that the timely and efficient payment of headage and premia grants is a major priority for the Government. I am glad I have secured extra resources in each of the last two budgets so as to ensure improvement in the delivery of these payments.

In 1993, a new centralised unit for dealing with special beef premium applications was set up in Portlaoise where over 100 staff are employed. This year I announced a further investment of £4.8 million to upgrade technology and provide additional staff in the Department in order to achieve the optimum delivery of services to farmers with special emphasis on the timely payment of headage and premia grants.

Given the very substantial increase in the volume of applications the record level of payments of some £377 million achieved in 1993 speaks for itself. Since the beginning of this year further payments amounting to over £140 million have been made. Over £50 million was paid out in April alone.

I intend to move progressively to a streamlined system for the delivery of all direct payments to farmers. The system will be as simply as possible while remaining consistent with EU regulations and enabling payments to be made as early as possible. I am satisfied that considerable progress has already been made in this regard.

The current payment levels have been achieved against a background of EU regulations which precluded any payment under the suckler cow and special beef premium schemes before November 1993, and even then, limited to an advance payment of 60 per cent. Payment of the balances due under these schemes was subject to EU regulations relating, in particular, to the ceiling on eligible animals and stocking density. In fact, member states are obliged to process all applications received from an applicant in the course of a year before paying out the balances. The November 1993 tranche of applications were therefore a factor in the payment of balances. Payment or foot of November 1993 applications commenced at the beginning of April 1994 and this allowed for payment of balances under all 1993 schemes to commence in April.

Ireland's performance in the delivery of these payments compared more than favourably with that of most other member states in the European Union. No advance payments under the suckler cow premium and special beef premium were made in several member states. The CAP reform measures have resulted in a considerable extra administrative burden on farmers and administrators. I appreciate that many of the schemes are highly complex and farmers have found it necessary to devote much time and effort to the completion of the necessary back-up documentation which is an essential part of the new regime. My Department, in conjunction with Teagasc, has made very effort to give the necessary information and help to all farmers.

Given that the schemes involve considerable amounts of money — as much as £640 million when the CAP measures are fully in place next year — it is not unreasonable that the EU lays down strict conditions for the filling of forms and the meeting of other requirements.

Farmers can help in the speedier delivery of payments by ensuring that the necessary documentation is completed carefully and fully. The experience with some of the 1993 schemes confirms that some farmers are not as careful as they should be in this regard. Incomplete or incorrect application forms is the principal factor holding up payments. There is no delay in getting payments to any farmer who makes an effort to ensure that all documentation is correctly completed.

As most Deputies are aware, the 1994 Vote represents only a small percentage of the expenditure handled by the Department. It does not, for example, include FEOGA guarantee expenditure in Ireland, which is expenditure funded by the EU budget or market support measures such as export refunds and intervention purchases. FEOGA guarantee expenditure in Ireland last year amounted to almost £1.2 billion. During the same year the Department took some £200 million worth of beef, butter and barley into intervention. In the overall context of FEOGA guarantee activities the Department's borrowings, as intervention agency for the EU in Ireland, at the end of December 1993 amounted to £503 million.

Expenditure incurred by the Department in purchases of intervention commodities is met from funds borrowed by the Department. The borrowing costs and the technical costs of storage, freezing, handling, transport etc., is initially met by my Deparmtent subject to subsequent part recoupment by the EU budget.

There were no significant developments in intervention stock levels of dairy products in 1993. This was due mainly to a relatively buoyant market for skimmed milk powder and a stable market for the butter sector. Beef intervention stocks, however, have been reduced dramatically since the beginning of 1993. This is a reflection of the firm market conditions which have resulted from the substantial reduction in beef production in the European Union and in eastern Europe as well as the reopening of some important third country markets. Irish exporters responded well to improved market conditions and consequently Irish sales of beef into intervention in 1993 were down to a quarter of the 1992 level. It is anticipated that there will be little of no use of intervention this year. On intervention stocks, it is a matter for the EU Commission to determine sales disposal programmes for these products.

Due to the large amounts of money needed to fund the CAP the Department is authorised, subject to the consent and guarantee of the Minister for Finance, to borrow to fund the system. The decreased provision for 1994 is due to once off devaluation costs which arose in 1993 on some foreign loans resulting from the devaluation of the Irish pound in February 1993.

The provision for the Leader and INTERREG subhead has more than doubled on the 1993 out-turn. The increased allocation is designed mainly to deal with the demand which will arise for 1993 claims which will not mature until this year.

As part of the CAP reform, three accompanying measures, part funded by the FEOGA guarantee section of the EU budget, are being introduced in member states. The start-up costs of the agri-environment scheme —£10 million — and the early retirement from farming scheme —£7.5 million — are being provided for in this year's Estimate.

Another part of my portfolio receiving substantially increased funding in 1994 is forestry under Vote 32. Increased expenditure in 1994 reflects the Government's ambitious plans for the development of the forestry sector. It is proposed to spend almost £50 million in 1994 on grants to promote forestry. The expansion of the national forest estate is a priority. Ireland's forest estate currently covers approximately 7 per cent of the country and the National Development Plan sets a target of 10 per cent to be achieved by the year 2000.

In 1994 we estimate that close on 25,000 hectares can be planted and if we can achieve this it would be a significant step towards attaining the ultimate target of 30,000 hectares per annum. Even then, we would still be a long way behind the average throughout the European Union which is just under 25 per cent. That the EU is not self sufficient in timber supplies means that there is a ready market for quality timber and timber products at competitive prices. We have the opportunity to exploit this market and the launch yesterday of increased afforestation grants and forestry premia, which are reflected in the 1994 Estimates, will add momentum to the forestry development programme.

The Minister of State, Deputy O'Shea, and I will be glad to answer questions later.

Mr. Crawford

I wish to share my time with Deputy Deasy. I welcome the opportunity to discuss the Estimate for Agriculture, Food and Forestry. It is one of the most important Estimates as agriculture is our largest industry and our greatest export earner in real terms. How this money is used is of paramount importance to export earnings and long term job creation in the food industry, on the land and in the service industries.

I agree with the Minister that farm incomes in the livestock and dairy sectors increased in the past two years but it must be remembered that they increased from an extremely low base. People involved in the production of pigs, poultry and cereals have had a difficult time due to the bad weather and would like to have a food equalisation pricing programme. Milk prices, influenced to some degree by the devaluation of the punt, were increased and that was of great benefit to the industry. That occurred in spite of rather than because of Government.

Under the Administration subhead there is an increase of £6.5 million in the cost of salaries, wages and allowances plus £2.1 million in office machinery and supplies. This is occurring at a time when farming families, despite what the Minister said, cannot get headage premia or grants and cannot even be told if or when they might be paid. The Minister said in his speech that there is no delay in getting payments to any farmer who makes an effort to ensure that all documentation is correctly completed. Many farmers have correctly completed the documents and still cannot get a date for payment.

I understand that over £100 million is in arrears. Computers have been blamed and farmers have been accused of incorrectly filling in the relevant forms when in may cases these forms have been filled in by Teagasc advisers. It is interesting to note that in November 1992, there did not appear to be any problem with these payments and they were all paid within three weeks.

Some farm families have received no payment since then. I hope they will all be paid before 9 June. Many farmers are looking forward to 9 June not because of the election but because they hope they will get their cheques before then.

Mr. Deasy

The Minister does not want to see Brian Crowley get elected.

Mr. Crawford

Under the subhead for education, research and advisory services it is sad that at a time of scarce resources £1.5 million extra has to be spent testing for illegal substances, such as hormones, in animals and meat. Pig farmers must feel aggrieved that the pig evaluation programme has been dropped, removing the only Government support of this sector.

The £6 million increase to Teagasc will be of little benefit to families when fewer advisers and specialists are being made available to help them with the myriad new Government and EU regulations, which involve form filling, maps and new diversification programmes. The highest earner in my county is an instructor on a three month contract. It is difficult for farmers to build up a relationship with someone on a three month contract who does not have guaranteed employment. Teagasc advisers are not helping farm families with the complicated farm retirement scheme applications. What will happen to the rural environment protection programme and other possible EU schemes? Farmers will pay for, and appreciate, a proper advisory service, but not advisers employed on a three month contract. While Department officials have attended public meetings and helped by giving information on the farm retirement and other schemes — this is appreciated by farmers — the advisory service has built up a trust with farmers over the years. It helped to initiate the massive increase in farm production before our entry into the EU. However, the number of advisers employed must be seriously examined by the Minister. I appreciate that the Minister has given funding to Teagasc, but the person who pays the piper calls the tune and more advisers should be made available to help farmers deal with the complicated farming structures which exist today. The new regulations, CAP reform and the GATT, will force farmers to work within a new code of structures. It has not been clearly indicated that of the £42 million allocated for tuberculosis and brucellosis eradication — I appreciate the Minister's actions — farmers pay at least £28 million in levies.

Even with the welcome changes in compensation arrangements for reactors, many farm families are being forced out of business by technicalities. I refer specifically to the hundred animal regulations mentioned to the Minister and some of his staff which debars farm families from income aid supplement. If a farmer has 35 cows, 50 calves and other assorted animals bringing the number to 100, he is debarred from this income supplement. Yet, a farmer with 99 top class dairy cows and no replacements could lose 10 of them and still be entitled to it. The situation is totally ludicrous and only a small number of farmers are caught in this way. We appreciate that the Minister has backdated the compensations to 1 January. Indeed, this will cost a fair sum of money. My proposal will cost a nominal sum but will be of major benefit to these small number of farmers. Will the Minister seriously reconsider that matter.

Will the £1.5 million eventually bring the Milk Board saga to an end? When will the promised milk agency be set up to control the liquid milk industry? The Bord Bia estimate looks dramatic until one realises what is happening. I have already spoken on this matter in the Dáil. In the new board power is being taken from the producers and industry. While the farming industry will still provide approximately £6 million, it will have no power on the board which will be politically chosen. I know the Minister will do his best to ensure the board is of the highest calibre, but its composition is creating a precedent in that those who pay the piper, such as the farming organisations and industry, do not have any right to provide members for the board. I appreciate they will be allowed to have members on the inner committees, but they will not decide on the allocation of finances.

Some £1 million has been set aside for the extraordinary cost of the Beef Tribunal. I wonder what percentage of the costs this will pay for? As yet, we have no idea of the results of that tribunal —it is long overdue. The real crime is the level of payment certain people have received and the cost to the agriculture budget.

I am glad the Minister stated that not £1 million but £2 million has been allocated as a result of unfavourable weather conditions. However, the Minister guaranteed on 26 January in the Dáil that it would not only help those in horticulture, but sugar beet and tillage growers as well. Will this sum cover all that, or will the Minister prepare a separate budget to fulfill that promise?

Is the Land Commission being wound up or revitalised since its budget has been increased? Has it been given new minor roles to keep it operating indefinitely? Does the budget for less favoured areas allow for the extensions and reclassifications that have been promised? Deputy Hyland is not present — I presume he is announcing another major project because of the European elections — but will he say whether this reclassification will take place, if extensions be made and if, and when farmers in these areas will receive headage payments?

Does the £34 million allocated for farm investment include part of the £6.3 billion Structural Funds package? Will this estimate have to be lowered in line with overall decrease in the amount of funds available? It was said that the funds would total £8 billion at the Edinburgh Summit. When will the new proposals for the control of farm yard pollution be announced?

Producer groups were heralded as a major benefit to farmers. However, I have been told by those in the process of applying that it is virtually impossible to get grant aid. Will they be extended to the poultry and pig industries? This could be of great importance to those industries.

The Minister has said how important the forestry industry is and could be. Has there been an increase in employment in the sector? Has Coillte provided these much heralded jobs? In my county, all of the timber produced is going north and we are not getting any employment benefits from it. What are the Minister's proposals to deal with big industrialists who take over large tracts of good land and plant it without planning permission? We should ensure our country is not destroyed for short term gains.

Chairman:

There is no facility for sharing time on opening statements. However, due to the poor attendance today and on the grounds that it will not be taken as a precedent, I am prepared to allow Deputy Deasy contribute for three minutes. As the committee is usually well attended it would not be possible to adhere to the Deputy's request. As this is his first speech as spokesperson on agriculture, I welcome Deputy Crawford's contribution.

Mr. Deasy:

Thank you, Chairman, for your indulgence. I also thank Deputy Crawford for sharing his time with me. I am sure the Minister will join with his colleagues in wishing Senator Crowley the best of luck in the European elections. Who would want a bright young man like that under one's feet in one's constituency?

Chairman

I notice that there are none under the Deputy's feet.

Mr. Deasy

I am amazed that there is not a batch of prospective Dublin MEPs present this morning to engage in a bit of farmer bashing, as they have been doing in the media for some weeks past. The Beef Tribunal could have a re-run, given the increased headage and premium payments in recent weeks and the likelihood of an avalanche of payments before 9 June 1994.

Regarding membership of the EU, under subhead M.4. reference is made to contributions to the CAP. There are four prospective members joining the EU from 1 January 1995 and it is also anticipated that a number of eastern European countries will apply for full membership and will pursue their applications vigorously in the coming months. These matters have considerable implications for this country and the committee should devote time to discussing the merits of the applicants and to assessing these implications.

A number of significantly large countries, with many very small farmers, joining the EU has serious implications for the overall EU budget and especially for agriculture. As a member of the Council of Europe I have been visiting a number of countries in eastern Europe and I am regularly lobbied. I was in Poland this week and there is a Polish parliamentary delegation visiting Ireland next week. They will probably lobby Members of the Oireachtas and the Government regarding Poland's prospective membership of the EU.

Poland has a population of 38 million people, a large proportion of whom are peasant farmers. Given this, the committee will appreciate the implications arising from countries such as Poland, Rumania and Hungary joining the EU. I do not wish to come down on one side or the other. The cost considerations of such developments are enormous, but the humanitarian considerations are probably more important and significant. Germany is in favour of Poland joining the EU, perhaps because it wishes to create a buffer state between itself and Russia.

This issue is so significant that it requires discussions of considerable length and depth by the committee. The committee does not wish to be presented with a fait accompli and be powerless to respond. It is important to ascertain the implications of developments on this issue.

Regarding the REPS scheme announced by the Minister in the Dáil last week in response to a parliamentary question from me, this scheme deals with the revitalisation of agricultural land with a view to making it suitable for habitats and sanctuaries for wildlife. Large tracts of our land have been virtually denuded of wildlife because of over-grazing and the over-concentration on intensive farm activities.

The Minister should continue to publicise and promote this scheme because the country is, and will become more so, dependent on agri-tourism. It will depend on having a wild life system, which was in place many years ago, to attract tourists. Given that many countries in Europe have been virtually denuded of wildlife it is important to have sanctuaries, habitats, major controls on pesticides and other harmful chemicals which would destroy the type of ecology that is desired for the country.

Hopefully, Chairman, I will have the opportunity later to elaborate on other points such as the planting of trees on good agricultural land and the involvement of Coillte Teoranta and their apparent lack of response to farm organisations or individuals on issues such as this. There is a need to consider the lack of control over a semi-State body such as Coillte Teoranta.

Regarding the issue which farmers have spoken about most of all in the past few days, will the Minister comment on the reasons for the sudden reduction in the price of milk? Is this a temporary snag, or is it something more permanent? Is there to be a continuing decline in the price?

Ms O'Donnell

It may appear unusual for a city Deputy to address the Estimate for the Department of Agriculture. It is a shame that it should appear strange for an urban Deputy to have an interest in agriculture, especially the food industry which affects equally those living in cities and towns. Agriculture and the food industry are of critical improtance to our economy as 30 per cent of total employment is accounted for by people working directly or indirectly in agriculture. It is regrettable, therefore, that there is a growing rift in understanding between rural and city dwellers regarding the language of modern farming and agriculture.

The food industry is one of the most significant employers in the country and has potential for a huge growth in jobs. All Deputies should be interested in the impact of policies on job creation. The Estimate for the Department of Agriculture is one of the key Estimates for the Government. The Department is one of the biggest Government employers and has a pivotal role in the administration of the CAP. There has been widespread criticism over the past couple of years of the administration of the CAP in regard to delays in payments to farmers and so on.

In some areas farming and food is of critical interest. The recent report by the Bishops on the west of Ireland illustrated that in some western counties such as County Roscommon and County Leitrim, over 45 per cent of the labour force is engaged directly in agriculture. In addition to the sociological importance of keeping people on the land, which is vital to all of us, despite the problems of rural depopulation, the food industry is vital.

We have come a long way from the roadside creameries of 100 years ago to become part of a major international food processing enterprise. Some of our major food companies have processing plants as far east as Budapest and as far west as Wisconsin. These developments are to be welcomed and there is scope for further such developments, especially with regard to the food companies in Munster where the food sector is so vital.

For these reasons, the Estimate for the Department of Agriculture deserves great attention. It is regrettable that as it is Friday, and three weeks before an election, there are so few Deputies in attendance and that there is not more public debate about agriculture. Given the recent Beef Tribunal it is important to ensure that moneys are well spent and that the administration of the Department of Agriculture is top class and fully accountable.

The consumer has a huge interest in this Estimate. The role of the Department, as watch dog on the quality of food and the elimination of the misuse of illegal substances, is important to all citizens. In recent months major campaigns have had to be undertaken to reassure the German consumer of the quality of our beef. It is heartening to note from the Estimate that there is increased provision for the testing of illegal hormone residues in meat. I hope it will soon become unnecessary for butchers to advertise hormone-free beef. We should all have an interest in the control of farmyard pollution and the subsequent effect on the environment. As Deputy Deasy said, this is essential for angling and agri-tourism, which have great potential for jobs and development.

I recently tabled parliamentary questions to each Minister about our compliance with EU Directives. Our compliance rate is very low. I asked further questions about Directives for which the date has passed for transposition into Irish law. Our compliance with these was also bad and in some cases infringement proceedings had been taken against Ireland for such non-transposition. We have been selective in relation to our membership of the EU. We have been quick to look for everything to which we are entitled but slow to take on the responsibilities of our membership. The Department of Agriculture and the Environment were the biggest offenders in relation to non-compliance with EU Diretives. These Departments are intrinsically linked. This audit of non-compliance should be of serious concern to the Government and the electorate.

Subhead B.1. relates to research and testing. There is a significant increase in the amount provided for testing for hormone residues in meat. Could the Minister give us assurances about the level of testing and the percentage of beef consumed which is tested? It is some time since the use of illegal growth promoters was banned. Why has it taken so long for such an essential increase in the funding of this investigation?

Under the miscellaneous services subhead there is a significant allocation of £1 million for damage relief. Could the Minister explain the reason for this increase and state whether there are matching funds from the EU for the damage relief programme? The increased funding for the Leader programmes is welcomed by everybody. In the context of the everchanging CAP, expenditure on research is a keystone in the development of a market-like agriculture. With regard to the increase in the grant-in-aid for Teagasc, could the Minister clarify what the effects will be of increases in funding for research centres and for training, advisory and education?

The consumer aspect is very important for everybody, particularly city dwellers. I frequently receive letters from urban dwellers who have concerns about the quality of food. An average person spends £70 per week on food. Therefore, since 1980 an average person would have spent over £50,000 on food. The quality of food is of vital importance to most citizens because of the huge spending on and consumption of food. A woman in Rathfarnham pointed out to me in a letter that she spent £50,000 on food since 1980. I was shocked by this figure because we do not evaluate how much we spend on a weekly basis on food. She complained that she had to accept food which was damaged rather than enhanced by the processing system. She was referring to washed potatoes, vegetables packed in plastic bags while wet — which is a perfect recipe for rapid decay — milk which was processed to last for a week but rapidly deteriorated when not refrigerated, bacon which was putrid because pigs were under stress during slaughter, beef which turned black because of growth promoters and bread so badly made that children would not eat it. There is a whole litany of complaints which consumers legitimately make about the quality of Irish food. Consumers spend £40 million each week on food and should have a stronger voice on food boards. The quality of food is a major political matter. I would like the Minister to comment on the view of various commentators that An Bord Bia should not come under the auspicies of his Department but should come under the Department of Enterprise and Employment.

The administration of headage premiums has been a big issue. Any Deputy who looks at the Order Paper will see a whole range of questions expressing complaints and asking when particular farmers will receive their headage payments. Perhaps the system is not adequately computerised. I would like the Minister to respond to this. Perhaps we do not have the resources in terms of computers and information technology to record beef herds. I cannot understand why such delays have occurred over a long period. I also understand that a clerical error by a farmer on a cattle identity tag is seen as an attempt to defraud the Department whereas if it makes a mistake it says nothing can be done about it. It is unacceptable that the biggest debtor of farmers is often the State. People canvassing in constituencies have found this to be an issue. Something must be done about the administration of the headage premium system to alleviate this inconvenience to farmers. I look forward to the Minister's response.

Chairman

We will now deal with subheads A.1. to A.8. which deal with administration.

Mr. B. Fitzgerald

Could the Minister explain why the provision for overtime and Sunday duty is reduced from £5,134,000 to £3,750,000? There may be a legitimate reason for this because of difficulties in 1993. The increase in the number of research and testing staff is welcome and is a step in the right direction. Subhead A.3. proposes to reduce the provision for advertising and publicity. There may have been an exceptional need for advertising and publicity in 1993, which the Minister may explain. There is an increase in the provision for staff training and development. Even though I would like to see even more money spent on this, the increase is welcome. Does the Minister think that investment in computer and data preparation equipment under subhead A.5. will help to eliminate many of the difficulties which have arisen, or is it part of an ongoing programme which has reached its peak?

Chairman

Before I invite further questions, I ask Deputies to indicate the subheads to which their questions relate. This would make the operation more efficient because of the size of the Estimate.

Ms O'Donnell

My question is about the administration of the various headage and beef premia — is there any hope of an increase in computer technology in the Department to alleviate delays in payments to farmers?

Mr. Crawford

I know it is not relevant to this subhead but I am very disappointed by the comments made in the media by some members of the Technical Group that they were not prepared to come here to discuss this Estimate.

I would like a breakdown of the cost of the Portlaoise office. The setting up of that office appears to have caused enormous problems for farmers, at least in the short term. Some of them have to ring Portlaoise, Dublin, Castlebar and their own local office. We should have a one-stop shop where farmers could get this sorted out. This would ensure that payments would be made on time.

The Minister said that any farmer with the correct documentation would have been paid long ago. However, many farmers have gone into their local office, been told that everything was correct, that it was sent for payment last January, yet they cannot find out if or when a cheque will be issued. This is totally unsatisfactory.

The staff in Portlaoise are extremely helpful to those who can get through to them. However, if farmers could go to their local office, as is the case with social welfare, then this could be sorted out much more quickly. Would the Minister reconsider, even at this late stage, the standardisation of the issue of payments, form filling and so on? It is ludicrous to see the forms in the local office being thrown into a box and then brought to Castlebar and back to Portlaoise. The whole system has gone haywire.

Deputy Brian Fitzgerald raised the issue of overtime which caused me to wonder if the overtime on sundry duties will be decreased this year. Will the 190 administrative staff be allocated to the national offices or will a reasonable number be appointed to area offices such as my own in Ballybay, Cavan and so on?

There is obviously more research and testing going on in the Teagasc area than there is here. There is an increase in funding there but the numbers involved are quite small — 20 or 30 people. The whole area of research and testing is of vital importance, given that we have to reorganise our food industry to take account of the fact that we can no longer increase production but must make the best use of the production we have.

Mr. J. Walsh

Deputy Brian Fitzgerald raised the question of overtime. There were exceptional overtime expenses in 1993 and I am glad to say that this year we have received approval from the Department of Finance for the recruitment of extra full-time staff, some of whom have already been taken on this year. Some additional part-time staff will also be recruited.

In relation to technology and the streamlining of the operation of the Department's administration, one of the biggest information technology projects ever undertaken in this State to upgrade our facilities was sanctioned last week by the Department of Finance. That whole operation, which will network all the local offices throughout the country with Agriculture House in Kildare Street, should be completed by the end of June. That will considerably improve, enhance and streamline the whole administrative system and the networking will be of considerable benefit to the administrative staff and also the farming community.

The specific matter of headage and premia payments has received a great deal of attention in the last year and there has been some misconstruction and politicisation of the whole matter. For example, the question of massive payments in 1992 because there was an election at the beginning of that year is an absolute fallacy. In 1992, for example, £349 million was paid to farmers in compensatory payments to supplement the income which they received from farming itself. In the calendar year 1993, £377 million was paid, which anybody with only an elementary knowledge of sums would realise is a higher figure. Therefore, this absolute nonsense and politicisation of massive payments in 1992 does not stand up.

There will be further increase this year in line with the increase under the reform of the CAP. Some spokespersons said that we should veto the reform of the CAP as it would not be in the best interests of Irish agriculture. Of course, the opposite is the case as farm incomes are up in the mainline activities. I referred to pigs and poultry as areas which did badly last year. I also mentioned damage caused by bad weather and we have made provision for some of the worst hit people.

In relation to payments for this year, I said in my opening statement that £140 million has already been paid. In April, for example, £20 million was paid as a supplementary compensatory payment to farmers. It is true that all eligible payments for January, February and June applicants have been paid and only those with queries or problems remain. As far as November is concerned, we have commenced payments and we are making very substantial progress because we can pay the 100 per cent payment.

The supplementary payments of £300 million, which will go up to £640 million next year, are funded by the European Union which insists on accountability and a certain degree of complexity in forms and so on. We have sought and achieved certain simplification of those forms. With the assistance of staff, we have gone around the country to advise and give information to applicants. Teagasc has also been quite outstanding and have worked beyond the call of duty, even on weekends, to give assistance. The staff of the Department of Agriculture have kept offices open over weekends. These schemes are new to the Department and to the applicants.

An unfair amount of criticism is levelled at officials and Ministers in relation to this whole matter. For example, of the 82,000 applications for the special beef premium, 40,000 had queries, were incorrectly or inadequately filled out or lacked the supporting documentation. Half of those 40,000 people were written to by the Department up to six times and still did not respond. In desperation the Department inserted notices in the newspapers advising prospective applicants that if they wished to be considered for payment under these schemes, they had 21 days to forward identification cards and additional documentary evidence requested.

While the Department's information technology and computerisation was not up to the standard of other Departments, superhuman efforts were made. Following the provision for additional staff and resources last year and in this year's budget, a contract has now been given for on-line computerisation of the local office network with the Department. Considerable progress should be made by the end of this year.

We gave an undertaking in the Programme for Competitiveness and Workthat, while we cannot meet abolute deadlines this year because of various constraints, next year all eligible farmers will be paid within three months of their application. Headage payments will be paid before October of the year in which they apply and considerable amounts of money are involved.

We are one of the best member states for making payments. I heard a complaint that the money is paid in small amounts and that it would be better if it was paid in one sum. We decided to give the 60 per cent advance payment allowed under the European Union regulations and then pay the 40 per cent balance. We could have delayed the total payment and paid it all together which would have been easier from an administrative point of view, but I recall demonstrations in Kildare Street on 5 November last about the delay in payments. However, under European Union regulation we could not commence payment until 1 November. In March there were angry statements from certain spokespersons about the delay in paying the final instalment of the ewe premium. Yet, under European Union regulations that payment could not have been made until 15 March. The teething problems with these schemes have not all be one-sided. Exceptionally large amounts of money have been paid in compensation payments to farmers and we are far better than other member states at making these payments.

There was a question about milk prices with which I will deal under another subhead. The Portlaoise office will work out well and be of considerable assistance in the administration of the special beef premium.

Deputy O'Donnell raised some legitimate concerns about research, testing and the quality of the food industry. Consumers are entitled to assurances on the quality and safety of food. The Minister of State, Deputy O'Shea, will address the concerns raised by Deputy O'Donnell.

Minister of State at the Department of Agriculture, Food and Forestry (Mr. O'Shea)

I share Deputy O'Donnell's view that in the food industry, the consumer is paramount. We hear much jargon about the industry being market led or consumer led. While those terms are clichéd that is how the system works. If one is not producing a quality product at a reasonable price, it has no future.

I reject the suggestion that the quality of Irish food is open to question. We are not told the origin of the items listed in that communication and we have no way of checking its veracity. The public are not aware of the excellence of our food processing industry and the great strides made since the food section was established in 1987. We have a reputation for top quality producers and processors.

The expert group on the food industry whose report has been adopted by the Government emphasised our advantages in having a green, clean, pollution free environment. There is now a food safety advisory committee with representation from the Department of Agriculture, Food and Forestry and the Department of Health. Funds have been provided to enable the committee to become an advisory board and the laboratory facilities available to it will be upgraded.

Mr. Crawford

A farmer could go into his local office on a Monday in November 1992 and be told that his cheque would be there on Friday. I am not being political; I am simply stating the facts. Farmers have been waiting for payment since last January. I appreciate a myriad of forms, maps and so on have to be processed but we must give some comfort to the farmer who has to appease his bank manager. A substantial sum of money is involved.

A farmer owed £5,500 to £6,000 in sheep payments approached me in desperation recently. He could not understand what was happening. I have not been able to get any information for him through the so-called hotline system. Initially it took days and now it takes weeks to get information through that system. I appreciate the efforts of the Minister of State, Deputy Hyland, in setting up that structure to help Members of the Oireachtas but they are having great difficulty getting information.

I appreciate that some farmers made mistakes but, as Deputy O'Donnell said, mistakes have also been made at administrative level. I have great respect for the local staff who do a tremendous job. As the Minister said, the office opens at weekends but, unfortunately, they are only allowed to open for a few hours in the morning.

A number of problems could be sorted out in the office. Many farmers did not get the education others got. They have great difficulty filling out complex forms yet if they leave one query unanswered their applications are refused. Many of the forms filled out by Teagasc personnel contain mistakes. This is not a political point; it is a fact.

I am not questioning the Minister's figures and I do not doubt that there has been an increase in the amount paid but that does not address the fact that farmers are in difficulties because, for some technical reason, they have not been paid. I had sufficient involvement in the EU to know there are reasonable people who wll deal with cases as long as there is not an abuse of the system.

As Deputy O'Donnell said, if a farmer makes a mistake he is accused of trying to defraud the Department and the EU. Meanwhile millions have been spent on the beef tribunal but answers have not emerged yet. When will farmers be paid and how can the process be streamlined?

Chairman

I will only take supplementary questions on the Minister's response. We have dealt with the group of subheads under administration. Deputies should base their questions on the Minister's response to the points raised.

Mr. Connor

I support my colleague, Deputy Crawford, on the delays in the payment of premia. The Minister must realise that premia payments represent almost the total profit income for farmers. Whether or not we like it, 60 per cent of farmers in 1992 figures earn less than £5,000 per annum and the premia payments represent their total disposable income.

I cannot accept that administrative difficulties cause these delays. The political will is not emerging from the head of the Department — I do not wish to offend the Minister — to ensure that the cheques are paid out. We use the most up-to-date technology; everything is prepared by a computer which has the capacity to issue thousands of cheques every day but there is ridiculous bureaucratic checking and cross-checking of files, which causes enormous delays.

On the age of the animal in the application for the 1992 beef premium the Minister will recall that in reply to my parliamentary question he said he hoped to secure a relaxation of the Commission regulation where farmers, who applied for the last of the old beef premia in December 1992, were a little careless about the age of the animals. The only requirement then was that the animal be aged ten months and over. Many farmers said the animals were 18 months when they were 22 months. They declared the same animals for the special beef premium in January 1993 and if there was a discrepancy in the declared age of the animal in December 1992 and the age declared in January 1993, although inspectors would have seen the animals and made a visible inspection of their teeth to discover their age, farmers received a letter from the Department which alleged they were defrauding the State or the EU. The letter was not couched in diplomatic terms. It was a bald statement. The Minister gave a sympathetic answer in reply to my parliamentary question but will the Minister let us know the present position as he said he intended to go back to the Commission and seek a relaxation of that rule?

Mr. J. Walsh

I do not want to labour the point on payments but an administrative burden was suddenly placed on the Department due to CAP reform and its implementation. Approximately 500,000 applications, with the requirement for maps and other documentation, placed a strain on the system and on the applicants. Deputy Crawford mentioned that farmers are not particularly interested in being inside, filling out application forms; they prefer to be out farming. However, taking everything into account, a substantial number of payments have been made where the supporting documentation is in order and the application forms are properly filled up. All the January and June 1993 eligible payments have been made. Only payments involving forms with errors or lacking supporting documentation require to be made.

Half the applicants for the special beef premium had to be written to up to six times. The idea that any Department or Minister would be slow to pay out EU funding is ludicrous. It does not merit further comment. I gave the figures for the payments in 1992 and 1993 and the increase this year. The increase this year is due to farmers improving the way they fill up forms and their use of Teagasc and other consultants in that task. If one applies for anything, for example, a house improvement grant or some other aid, one must fill up the forms and make an application.

Mr. Crawford

There are no house improvement grants.

Mr. J. Walsh

In the UK, a substantial decrease in headage payments was announced in the budget this year. We are maintaining payments and members will note from the Estimate provisions that there is increased funding. While we cannot meet absolute deadlines this year, we are doing better than last year. By next year, given that the contract for information technology has been signed, we will pay eligible applicants within three months of application and, all headage payments will be made by October of each year. I will keep that commitment.

Deputy Connor asked about applications for premia for animals aged 10 months. In November 1992, three months later the animals somehow reached 22 months of age. It was a little peculiar. I have the greatest sympathy for farmers in this matter and I raised the issue in Brussels, pointing out that farmers gave a rough estimate of the age of the animals. At that time they were not asked to estimate it within weeks or have the birth certificates of the animals.

Mr. Connor

They only had to be ten months old.

Mr. J. Walsh

It was, as we would describe it, an innocent error. I have made the case on that basis to Brussels. I am awaiting the outcome and hope the case we have made in good faith will be accepted. I hope we can help the farmers concerned.

Mr. Connor

I hope the point was made——

Chairman

Deputy, I will have to rule you out of order. I am moving to subheads B1 to B4 of the next group. Administration is being used to raise everything. There is a slight abuse here. We should move on or we will not get through the Estimate. Anything can be dealt with under administration but we must get down to business.

Mr. B. Smith

On the filling of vacancies among Teagasc staff, in County Cavan, the situation is unacceptable. A permanent vacancy in the Bailieboro area has not been filled for months following the sudden death of a formidable Teagasc adviser. Three other permanent positions, have been filled on a temporary contract basis. I understand that Teagasc headquarters have submitted proposals to the Department, seeking to have these vacancies filled on a permanent basis. I appeal to the Minister to try to ensure that the four permanent positions being requested by Teagasc will be filled in County Cavan without further dalay

Mr. B. Fitzgerald

Will there be further discussions on Teagasc?

Chairman

Not unless it is about the grant-in-aid and general expenses of Teagasc for superannuation purposes.

Mr. B. Fitzgerald

The increase to Teagasc of nearly 900 per cent from £182,000 to £1.68 million in funding for hormone testing under subhead B.4 sends out a clear message which has to be welcomed. Consumers' concern is widespread because over the past few months a number of people appear to have put the entire beef industry in jeopardy. Some speculators go to marts and outbid the genuine farmer knowing that their subsequent use of an illegal substance will enable them to gain when reselling.

The proposal to increase funding for hormone testing by 900 per cent gives a clear message, but does the Minister consider it sufficient to cope fully with the illegal practice which appears to be fairly widespread? The reasonable amount of success of late, satisfies me that we are dealing with this serious problem and we should not allow a few speculators to put our industry in jeopardy.

On subhead B.3 covering Teagasc, a figure of £3.8 million is allocated to reduce the core debt. Teagasc's core debt has always been a serious problem. Where does this leave Teagasc now and what is the current debt? Will it be relieved of the albatross that has been around its neck for some time?

The 10 per cent increase for research centres is welcome because if we do not continue to research and develop our industry through Teagasc we will get nowhere. Perhaps we could have some explanation for the £2.5 million restructuring costs?

Mr. Connor

On subhead B.1 — research and testing, I welcome the 32 per cent increase in the amount of money being allocated. How much of that money will go to research and what progress, if any, is research making in terms of combating bovine tuberculosis? Do other endemic animal diseases research pose problems for the national herd? How successful is our research proving and how much is it costing?

On testing can the Minister tell us the incidence of tuberculosis in the national herd and if the battle is being won? At the end of this year can we report that matters are better than they were a year ago when these Estimates were dealt with and no doubt the same question arose?

Subhead B.2 deals with grants to farm and rural development organisations, the responsibility of the Minister of State. I take it that under that subhead we can discuss the Leader programme. Will the Minister tell us the up-to-date position on Leader II as well as reporting to the committee on whether the aids and programmes in Leader II that were not in Leader I will be expanded. We would also be delighted to know what expansion is planned for a county like Roscommon, or any western county, where Leader applies.

On rural development will structural funding or some European Union funding be available because it is fundamental to rural development? On the small dairy sector, the Minister might be aware of——

Chairman

Which subhead is the Deputy referring to?

Mr. Connor

Subhead B.2.

Chairman

I would ask the Minister not to respond to the question on Leader because it does not come up until subhead M.12.

Mr. Connor

Perhaps we can leave that question until then. The other point I have is a general one about rural development in the small dairy sector and the need for Structural Funding for that sector. I do not know if the Minister is aware of a recent survey carried out among 1,500 dairy farmers in County Clare, 75 per cent of whom said they would leave dairying because they were under economic/financial pressure. The main problem was that most of them had a quota which was barely viable or on the wrong side of the viable line and matters were getting worse for them. The survey showed also that 800 of these farmers could viably remain in dairying if some assistance was given to them, for instance, to purchase or expand quota. Such assistance is the fundamental basis of rural development.

The survey showed that 30 million gallons of milk were being produced by those 1,500 farmers and on a rough estimate that is worth £30 million. Counties such as Clare, Roscommon, Mayo and Sligo are losing an enomous amount of that milk quota to the better milk producing areas. If half the dairy farmers in Clare were to go, it would, in theory at least, take something like £15 million out of that economy. I would like to be able to give the relevant figures for my county or constituency but I cannot because such a survey has not been done there. However, the trend revealed by this Teasgasc survey of 1,500 producers in the County Clare dairying industry shows that they are losing millions of pounds from the rural economy. Rural development must involve some assistance being given to this category of farmer to ensure that that cornerstone of the economy in any region is maintained. Its replacement would involve social welfare assistance and other income assistance from the European Union which would not be nearly as efficient nor deliver the income the producer would get from dairy production. I make that point because of the way rural development policy might go in the future.

Chairman

I do not like interrupting but we should avoid making Second Stage speeches. This is a question and answer session and I would like Members to adhere specifically to that. I would ask the Deputy to keep to questions and allow the Minister to answer. A statement was made on behalf of the Deputy's party by a spokesman earlier.

Mr. Connor

Thank you for your indulgence, Chairman. I was, however, trying to pose a valid question although I admit it may have been a bit over long.

Ms O'Donnell

I too welcome the increase in research funds. In all Departments of State there has been a lack of research, including science and technology. On subhead B.3 there is a provision of £2.5 million for restructuring costs and almost £4 million for the reduction of a core debt. What impact will this restructuring cost have on employment in Teagasc centres, and will this increase in expenditure result in increased research activity by Teagasc or will it apply to the restructure of the debt and administrative matters?

Mr. Crawford

I would like information on the general testing regime and veterinary research in particular. It is annoying that £1.5 million extra must be spent on hormone testing. I agree with the Minister and Deputy O'Donnell that our consumers and purchasers must be sure that we are producing the finest produce. However, it seems a bit daft that under the recent GATT we must allow in meat from the US and other countries which is tested in those countries but is not tested in Europe. There are different regulations for different people.

I have already mentioned Teagasc. Will the sums of £3.85 million and £2.5 million put Teagasc on a sound basis for the future? I welcome this financial commitment to Teagasc. However, it is not seen in the number of Teagasc workers at farm level. I am delighted that Deputy Brendan Smith supported my call for more full-time advisers to advise farmers on the complex developments in agriculture. The Minister must insist on such an increase because when we approach Teagasc at either local or national level we are told that full-time staff cannot be employed without the permission of the Minister for Agriculture and the Minister for Finance.

It seems strange that at a time of great potential, but great difficulty, in agriculture advisory staff is not made available. Farmers pay an enormous portion of the funding for Teagasc advisers. The adviser in Monaghan to whom I referred earlier is on a three month contract and is the highest earner among Teagasc advisers in the county. Nevertheless, his contract will not be made long term. Is that £14.7 million the figure that farmers subscribe to the work of the advisory service?

Mr. J. Walsh

Teagasc is a crucially important arm of the development services for the improvement of our agriculture at production, processing, marketing and packaging levels. It also provides essential testing and research facilities in the interest of consumers. I am pleased that we have provided additional funds for Teagasc this year. The additional funds will allow extra permanent staff to be employed as part of an efficiency programme for Teagasc. The programme offers a voluntary retirement scheme for some workers who are nearing retirement and provides for a badly needed injection of new blood into the organisation. The £2.5 million is earmarked for that programme.

The restructuring of Teagasc in the context of an efficiency programme is going very well. Teagasc in its early years was quite outstanding in improving and increasing production at farm level. Its task has now changed to operating within quotas and within savings. It assists industry not only at farm level but beyond the farm gate, in our processing industry. Our national food centres at Dunsinea and at Moorepark work extremely closely with industry and are doing an excellent job. They also provide important consumer-orientated facilities, particularly at Dunsinea. The additional staff and moneys will assist in those areas.

Testing and facilites to give assurances to consumers were mentioned by a number of Deputies. We have a national random residue testing plan, which was drawn up in conjunction with the European Union, to examine live animals and fresh meat for the presence of any harmful residues. Under the plan, which covers both the export and domestic markets, testing of live animals and of meat is carried out for all hormones, antibiotics, betagonists and other substances including pesticides. This plan for sampling is complemented by extensive sampling on suspicion. Under the plan 21,147 samples were examined in 1993. This compares with 20,679 for the previous year. Additional sampling on suspect animals and carcases for 1993 was 17,445 as against 12,000 for 1992. In addition, the Animal Remedies Bill was passed. It gives further protection to the consumer and increases fines for the small number of people who persist in abusing the system.

It is vitally important that we have these controls in place. Our controls and testing procedures are of signicant benefit not only to our own consumers but also to consumers of Irish food worldwide. This fact was highlighted a couple of weeks ago when the German authorities accepted our assurances that we had adequate and comprehensive controls in place. That acknowledgement by the German authorities was of vital significance to our meat industry and to our food industry in general. Additional resources in that area are welcome.

Deputy Connor asked a question about the Clare milk quota. I launched a study carried out by the Clare Leader programme in Ennis and I was impressed by the finding that milk producers in the west of Ireland and small milk producers generally are decreasing in number and are finding it extremely difficult to purchase additional quota at reasonable cost. I have asked the milk division in the Department to review our policy on milk quota allocation and redistribution. I have also asked Brussels to permit a degree of flexibility in the implementation of various schemes to assist small milk producers. I have asked the European Union to allow us to make provisions to retain the milk production capacity in disadvantaged regions, particularly those in western and north-western areas of the country. There is concern that milk production might move from these parts of the country to more affluent areas.

I expect Brussels to give favourable consideration to the introduction of a milk quota restructuring scheme which may possibly be part-funded under European Union Structural Funds. We hope these discussions will be successfully concluded. That would address a number of the problems raised by Deputy Connor.

Some co-ops have been extremely helpful in this regard, especially those in the north-west. Deputy Crawford's area is an example to the rest of the country. Those co-ops assisted the smaller milk producers. The area has been covered quite well by Teagasc and other bodies.

Mr. Crawford

Will the Minister urge Teagasc to make more field officers available? It is important that research be carried out but the results must be brought to the farms. My information is that there has been no increase and there may even have been a decrease in personnel provided by Teagasc at farm and producer level. I ask the Minister to rectify that.

Chairman

We now move to livestock improvement and disease eradication. I suggest we take production and development aid also — that involves taking the subheads from C.1. to D.3. Is that agreed? Agreed.

Mr. Crawford

There is an increase of 5 per cent in the funding for bovine tuberculosis and brucellosis eradication. The Minister said he was still trying to obtain EU funding for these schemes. Can he be more explicit about how those negotiations have progressed, as they have continued for many years? What hope is there of obtaining from Brussels the possible £10 million per year over a number of years to alleviate the cost of levies? These cost farmers and the country as a whole between £28 million and £29 million.

Is the Minister satisfied this money is being properly used and that we are coming to grips with TB and brucellosis? It is causing considerable damage to farmers around the country. As my colleague, Deputy Connor asked, is enough research being carried out into the cause of the disease? Both nationally and at farm level massive annual funding continues to be paid into this area. Unfortunately farmers and others feel this position will continue forever.

At a time when some of the activities of An Bord Glas are supposed to be taken over by An Bord Bia, why is the budget of An Bord Glas being increased? Does this mean the Minister sees a need for extra funding for the promotion of horticultural production, since he failed dismally to provide enough funding for those who had made tremendous strides in increasing horticultural production? He said £1 million was initially provided, which was increased to £2 million, but that industry not only made great efforts to increase its share of the national exports while dealing with the needs of the horticultural sector. To what use will An Bord Glas put this increase?

Mr. Broughan

This subhead constitutes one of the great scandals of Government and administration. Recently we investigated this 50-year long problem and the enormous amounts of money involved which urban dwellers believe have effectively been wasted under this subhead, especially on the bovine TB scheme. Have we to continue spending money on this area?

This constitutes one-sixth of the agriculture budget, a huge proportion. Would it not be better to give this money as income support for smaller farmers or those in western and other underdeveloped regions and cut our losses? The Committee of Public Accounts was aghast when it looked at the figures some weeks ago. A colossal amount of money has been wasted over the years. Perhaps the Minister could finally take decisive action to stop this wasteful burden on our people.

Ms O'Donnell

Will there be a facility or an allocation under this Estimate for the computerisation of herd numbers? This is badly needed to control the spread of disease such as bovine TB. It has been recommended by ERAD. In New Zealand and Northern Ireland major advances have been made in tackling the spread of such diseases by controlling the movement of animals and enhancing computerisation. Are we simply throwing money at the problem rather than seeing what systems can be put in place or make an impact on the problem, such as recording the relevant details?

Is there any confidence in or support for the development of organic farming in Ireland? Will the Minister outline his plans within the context of the Estimate to give support to that area and indicate political will and confidence in that area? That sector of the industry is popular among urban dwellers and it should be developed positively because of the demand.

Mr. Killeen

Under subhead C. 1., is the Minister satisfied that his schemes for the non-thoroughbred horse breeding industry takes account sufficiently of the level of expertise and co-operation available to breeders? Sometimes that is organised through small companies, such as my group, West Clare Horse Breeders. Does he think the level of support is sufficiently well directed to be of maximum benefit?

Deputy Broughan mentioned the bovine TB and brucellosis schemes. The success of the schemes depends largely on farmers not being unduly penalised and not suffering financial loss for complying with conditions of the scheme. One difficulty faced by the Department, which has been a cause of the lack of success, has been that in complying with the regulations farmers have suffered severe losses and in some cases gone out of business. It is vital that farmers be adequately compensated for their losses because the success of the scheme depends on their co-operation.

Mr. J. Walsh

The Minister of State, Deputy O'Shea, will take the matters relating to horticulture, An Bord Bia and consumer concerns about a number of matters. There were a number of questions about the bovine TB and brucellosis eradication programmes. While it is easy to say that there has been considerable expenditure on both these schemes and that we still appear to have a problem, the facts are a little different. When the scheme came into operation we had an extremely high incidence of brucellosis and tuberculosis in our livestock herd. That has now been reduced to a hard core residue, which is extremely difficult to eliminate. Nevertheless, a programme is in place which allows Ireland to retain its exceptionally high animal health status internationally. That is important because we have what we call a white country status in a number of areas and in this area it helps the export of over £4,000 milllion worth of food and beverage products annually. If this programme was not in place, a number of our products, not only meat but other livestock products such as milk, would be endangered in some markets. We are continuing with the programme and its research element to seek new ways and systems to try to root out the final residue. These organisms are extremely difficult to eliminate because they stay in place for a number of years. This is the situation in most other countries as well.

Compensation is another aspect of disease eradication, which was raised. It is a severe blow to any farmer to have a disease breakdown. We sought this year, in consultation with the farming organisations, to improve compensation to herd owners who had a breakdown. For dairy farmers, that is related to the milk output from particular animals and it was unanimously agreed between the Department and the farming organisations. It is a substantial improvement.

Over the last couple of years we have tried also to get substantial funding from the EU in an effort to make substantial inroads into the final residue of the disease in the national herd. However, the EU veterinary fund is totally committed, but we are still looking for it because it is important. There are substantial amounts of money involved and we are continuing to press for an allocation from the veterinary fund. At present, that is not forthcoming because the fund is committed.

The following figures give an indication of the residue left in the national herd: in 1991, 4.4 of every 1,000 animals tested had tuberculosis; 3.2 animals were affected in 1992; and in 1993 2.9 of the 1,000 animals tested had the disease. This is an extremely low level which means that over 99 per cent of the herd is free from the disease. Brucellosis is under control and is virtually eliminated. We are now talking about finally tackling this remaining residue.

I ask the Minister of State at the Department of Agriculture, Food and Forestry, Deputy O'Shea, to address questions in relation to An Bord Glas, horticulture, An Bord Bia and consumer concerns.

Mr. O'Shea

The increase in relation to An Bord Glas is as a result of a new board. The interim board came up with a plan in 1988 to cover the period from 1989 to 1993. During that time 1,800 fulltime jobs and 1,500 part-time jobs were created. The new board is presently drawing up a strategic plan, which I hope to get in the near future. The mushroom industry has been the big success of the last five years. Obviously, we want an industry to create the same level of fulltime and part-time jobs, comparable with the achievement of the mushroom industry between 1989 and 1993. The extra money will assist the board to get the new plan off the ground.

I will sketch out the functions of the board because there is often confusion about them. The board is involved in market research, the provision of market information, the promotion of horticultural produce, helping marketing projects, test marketing, feasibility studies and business planning. This work is important because of the widespread nature of horticulture and the fact that it depends on the market. Since I came into office I have been impressed by the way in which the standards have improved in various areas of the horticulture industry. That is based on the good work carried out by An Bord Glas.

Another question related to organic farming. The fact there is only a token increase under subhead D does not give the full picture because of £150,000 is available under subhead M.17. The provision under this subhead is for a scheme of grant-aid to individuals, companies, co-operatives or producer groups for the provision of facilities for grading, packaging, storage and distribution of organic produce and to recognise bodies, such as Teagasc, SFADCo, UCD, etc., for research and development, marketing, promotion and training in support of organic farming.

My colleague, the Minister of State at the Department of Agriculture, Food and Forestry, Deputy Hyland, recently launched the rural environmental protection scheme. There is also provision under that scheme for organic farming. This option will assist farmers who wish to covnert to or continue with organic farming methods. Farmers who wish to obtain the premium for organic farming must meet the requirements for organic farming as set out in the EC Regulation, 2092/91. That is the register with the Department of Agriculture, Food and Forestry and the details are in that programme.

A problem in the industry, as presently structured, is that three groups are catering for approximately 200 producers. There was only one group when this industry was first funded, but it seems to have become the classic Irish business with two splits. It is my intention to meet these three groups in the near future because I remain to be convinced that we get the best value for taxpayers' money for EU funding by having three groups to cater for such a small number of producers.

I want to refer to earlier comments about the food industry and, in particular, if An Bord Bia should reside in the Department of Agriculture, Food and Forestry. The expert group was unanimous, although there was one dissenting voice, that it should reside in the Department. Most administrations in Europe have placed food policy in the same Ministry as agricultural policy. That is logical because it enables an integrated approach to be taken to the development of the agri-food policy in general. This is essential for the elaboration of a policy, which is market-related, and to ensure that when taking decisions on agricultural policy the interests of the food industry are clearly taken into account. Over the past decade this approach has seen the development of a modern export oriented food industry. Since 1987 there has been a separate section for food in the Department. If we look at what happened during that period through the use of the FEOGA guidance fund and the wide range of expertise in the Department at all levels of the food chain, the logic of the almost unanimous decision of the expert group, which has been endorsed by Government, may be seen.

Mr. J. Walsh

I neglected to answer a question Deputy O'Donnell asked about animal movement. Animal movement is covered in a major project, the animal movement, permit and headage scheme, which has been operated by the Department since 1992. This is a large project, involving five phases. It involves establishing links with marts and vets throughout the country who will have a role working with the Department putting in place the animal movement system. In 1996 we will have a system of tracking the movement of every animal from birth.

Deputy Killeen asked about the non-thoroughbred horse industry into which considerable resources have been put over the past few years. There has been an increase this year. This increase has been given because of the dramatic rise in the number of non-thoroughbred horses. I am glad that under the National Development Plan we expect to have a further programme to improve and enhance the quality and performance of the non-thoroughbred industry in the coming year. It is an important industry and headage and other specific grants have been made available. Equine centres have been grant-aided and Leader schemes have been beneficial. It is worth spending money based on our international reputation in this industry. We have been awarded the World Equestrian Games in 1996, which will be held in Punchestown and we should have a good national team for that event. Investment in that industry in recent years was money wisely spent.

Mr. Crawford

My initial point about the £42 million allocation in the Estimates for bovine tuberculosis and brucellosis eradication has proved correct, despite Deputy Broughan's assertion that the State was spending one sixth of the agriculture budget on disease eradication. One of our main problems is that farmers will spend £28 or £29 million on disease eradication while the State will spend approximately £14 or £15 million. I hope that will be spelled out clearly in future because it causes enormous problems. I am not justifying the lack of progress in this area, but it is important to set the record straight.

On subhead C.3., General Disease Control and Eradication, in the light of the massive increase in cattle imports, is the Minister satisfied that we have tight enough control over that scheme? I know the Department allows animals from some countries, but not others, to be slaughtered in processing plants. This anomaly must be clarified. We must maintain our good record of disease control and this island is an important nucleus for disease free animals in Europe. There is much talk about State funds spent on disease control, yet farmers get no recognition for the major role they play.

Mr. J. Walsh

I pointed out earlier that farmers pay at a ratio of 2:1. of the £42 million spent, farmers contributed £28 million. In addition the Department pick up the administrative costs of the scheme. However, farmers are making a substantial contribution.

Chairman

We will now deal with the next group of subheads under the Miscellaneous heading. There are 17 subheads under this heading and I suggest that we take subheads E. to I.5. There are 19 subheads under Schemes Operated in Implementation of EC Regulations and Directives. The diverse nature of the Miscellaneous heading could be confusing and I suggest that we take subhead E. to I.5 and then J.1. to L. Is that agreed? Agreed.

Mr. Crawford

On the rationalisation of the Dublin and Cork District Milk Boards, which have been allocated £1.5 million does that mean we will see an end to this saga and that the milk boards will be wound up? Will a new agency control the liquid milk area? This obviously has major implications for the AIE system because of the two boards' involvement in the A.1 stations.

I spoke at length about An Bord Bia. I hope the Minister will give a commitment that the funding in the Estimates will be provided not only in 1994, but in the long term. If this new food board is to be meaningful and is to include part of the role of An Bord Glas and the other food agencies, we must make a long term commitment.

The allocation to the meat classification scheme has been increased by 27 per cent. Even in the early days of meat classification when I was chairman of the IFA livestock committee, the scheme caused great anxiety among farmers. Will new technology eliminate farmers' anxieties that, perhaps when under pressure, some operate this scheme differently. When there is an opportunity to sell to a meat factory or to live exporters, we must ensure that the meat industry has the best market. If there is doubt in farmers minds, they are inclined to opt for the guaranteed system of live export. I want to ensure that as many cattle as possible are slaughtered here, provided farmers get a reasonable return. If we are able to prove that the meat classification scheme is beyond question, we could increase the faith of farmers.

Mr. B. Smith

The Minister will be aware that cattle breeding societies expressed concern about the possible loss of the ancillary businesses of the Dublin and Cork District Milk Boards. Has provision been made to retain in public ownership the valuable livestock breeding centre at Enfield, County Meath?

Mr. B. Fitzgerald

Can the Minister tell the committee the position in industrial relations aspects of the winding up of the Dublin and Cork district milk boards? Have negotiations been finalised and, if so, has there been an agreement to ensure that the full time jobs of staff remaining on will be protected? We do not want to see experts being put to work in unsuitable areas as the skills acquired over the years must be put to good use.

On the Second Stage debate on the Irish Horseracing Industry Bill we welcomed the major 52 per cent increase in funding for the industry which we all recognise is a tremendous employer and an entertainment industry. However, those with an interest in the industry know that attendances at race meetings are again in serious decline. What is wrong? Are we pricing ourselves out of the market? Will this additional money fund research into the real difficulties and try to address them rather than being thrown at some of the major tracks which will not bring in the punters? For example, last weekend the Leo-pardstown meeting did not attract the punters, perhaps because of the expense. I hope that will be addressed.

A little nearer to my heart is the greyhound industry. I am glad there is an increase of 80 per cent in funding, albeit from a very low base, but at least it is a step in the right direction. I hope the new board will be encouraged to produce a development plan which will be met with further funding in the future. If not, another industry which has had a bad run will continue to decline. However, looking at the receipts in the past few weeks, it is obvious that there has been an increase in revenue. I hope the new board will be given the support it needs. This is a step in the right direction.

Mr. J. Walsh

A number of Deputies raised the question of the Dublin and Cork district milk boards. The Department has concluded an agreement with SIPTU on the rationalisation of the staff of the Cork and Dublin district milk boards in the context of the board's abolition and the sale of the ancillary business. The agreement provides for, amongst other things, a voluntary early retirement scheme and the sum we will be required to pay will include lump sums to the retiring staff and pensions during 1994 as well as certain other costs associated with the abolition of the boards and the sale of the business. This agreement with SIPTU will mean that the staff who remain on will be fairly treated. They have accepted that they will be no worse off than at present.

On the legislation there is one final amendment to be agreed with the draftsman's office before we can reintroduce the Bill. I expect that the drafting will be finalised in the coming week or two and that we will be able to reintroduce this legislation and get this matter tidied up in this term.

Deputy Brendan Smith had a specific question on Enfield which will be put up for tender. It will be a matter for interested stations to tender for it.

Deputy Crawford asked about the beef classificaiton scheme and I confirm that there is a common system of carcase classification. This is a standard method here. Each carcase is inspected and classified at the weighing scales on the factory line by a classification officer of the Department. The carcases are labelled and stamped following classification. There is an appeals procedure for those who are dissatisfied with the grades which their animals received in the beef carcases classification system. Complaints on the grading of cattle should be brought to the attention of the factory management or the classification staff within 24 hours of the initial grading. The carcase will then be re-examined with the assurance that either the same grade will be maintained or a higher grade recorded.

Deputy Crawford referred to livestock and meat exports. I concur that we must have a balanced system which gives the best return to the farmers. In that regard I was very pleased, along with the veterinary staff of the Department, that the north African market for live cattle was reopened on 1 January 1993. It worked extremely well and the prices to farmers improved almost immediately and dramatically. It is important that that competitive level of live exports remain.

There is some concern that the number of live exports, which reached 385,000 head last year, is running at such a high level that some plants are finding it difficult to keep going for five days a week and some of are down to one day per week. Some of the larger co-op plcs particularly are threatening to get out of the processing industry. That would not be in the best interests of the industry in the medium and longer term because we have invested a very substantial sum in the processing promotion and marketing of Irish meat and have been successful not alone in the UK but in continental supermarkets.

Anybody who read the CBF report last year will see the dramatic improvement in sales of value-added products. We have in excess of 5,000 jobs in the industry as well as the added value to the product. We need balance in this matter. We need and will continue to have a substantial live trade but we need sufficient numbers to go through our plants to meet the valuable markets which have been opened up in supermarkets throughout 60 countries. I am glad to have the opportunity to comment on that matter.

Deputy Brian Fitzgerald raised the question of the Irish horseracing authority and expressed concern about the security of funding for that structure. That concern was voiced by people in the industry. That section of the legislation on funding is similar to that which applies to all State bodies. I do not see any difficulty in the medium or longer term with funding and support for the industry. It is important; it employes 12,500 directly and a similar number indirectly, making a total of about 25,000 in the industry. Racing and the performance of Irish horses in Ireland and overseas, has given Ireland a tremendous reputation as a suitable location for breeding and racing world class horses. The industry is worth supporting and investing in. It also has substantial export potential and it benefits our tourism industry.

A county adjacent to mine has three tracks giving tremendous entertainment and, probably some profit to punters from time to time. Race tracks are part and parcel of our tourism industry. We hope that by improving facilities and the menu of opportunities for people who go racing there will be a substantial increase in the amount of money going back into the development of facilities at our tracks, leading to an increase in the numbers who go through the turnstiles making it a more profitable, exciting and entertaining industry, as well as a valuable contributor to our economy.

A number of questions were raised about An Bord Bia and Bord na gCon which the Minister of State, Deputy O'Shea will address.

Mr. O'Shea

Deputy Crawford asked whether we intended to continue the level of funding for An Bord Bia. I assure him that will be the case, and it will be catered for under Structural Funds until 1999.

There has been a welcome increase in funding this year for Bord na gCon. The new board established earlier this year is developing a strategic plan and, as Deputy Brian Fitzgerald pointed out, this industry has been and is in decline. However, one of the recent hopeful signs was the legislation passed by the Houses of the Oireachtas before last Christmas removing the ban on Sunday racing. The Sunday meetings held heretofore have been a success and this augurs well for the future.

Sunday meetings need to be held in conjunction with some local events or festivals, for example. The Waterford track had its first Sunday meeting last Sunday in conjunction with a local charity. There was a record Tote take and a record betting levy. Bord na gCon's funding comes from three sources — the betting levy, profits from the Tote and sponsorship and, therefore, the attendances and betting at the tracks is important. We intend to introduce more comprehesive legislation on the industry late this year. One aspect will be the establishment of the greyhound industry consultative forum. This idea was mooted because the greyhound industry has many segments and it is not possible to cater for all the interest groups in Bord na gCon. The Government has agreed that we should establish this forum where the various interests can come together. I will set up this forum on an interim basis in the near future.

The industry has to be looked at; the future of racing in Dublin, for example, has to be addressed. To arrest the decline we need strategic planning. The increase in the funding in the Vote is the first tranche but to justify further funding we need a strategic plan which, will help to relieve unemployment.

An aspect of greyhound racing of which we can lose sight is that it is a good alternative enterprise in rural Ireland. A survey carried out a couple of years ago indicated that of 8,000 greyhound breeders 6,000 are small farmers, and, on average, each earns an income of £2,500 from greyhound activities. At that level, it is important as an alternative rural enterprise. There is also employment at the tracks, with Bord na gCon and with the Irish Coursing Club. It is a considerable industry but, as I said earlier with regard to An Board Bia, we must be conscious of consumers. Consumers nowadays are not happy to accept the facilities and amenities available at our tracks. Experience in other countries shows that we need to provide a wider range of amenities, eating facilities in some instances, bar facilities and indoor facilities generally.

On marketing, there is more scope in the British market and, to a lesser extent, in the American market. We cannot wait for people to come to buy greyhounds. In the horse industry, possible buyers are targeted, contacted and invited here, and this is the way forward. As part of the stratgic plan we need a marketing facility and we need to become more professional.

It will be difficult to regenerate growth in the industry but the potential is there and I look forward to Bord na gCon producing a strategic plan to turn this industry around.

Mr. Crawford

I am worried about the Minister's statement that the funding of An Bord Bia is subject to EU funding. Does this mean that as we have not yet got agreement on the whole package from Europe? Could An Bord Bia's funding be decreased on the same basis as overall EU funds have been decreased? I understand the Department saved an enormous amount on intervention controls since intervention is no longer a major issue. Surely, therefore, An Bord Bia could be guaranteed a long term budget without reference to EU funds. If structures to continue to do what the Minister has said CBF is doing are set up the board must know that the funding will be available.

The Minister was asked earlier to comment on the coming decrease in the milk prices. There is no doubt, when the real effects of CAP and GATT reform are felt prices will decrease, so that structures for proper marketing will be more important than ever.

Mr. O'Shea

I recognise Deputy Crawford's great interest in this area. The Deputy served a term with CBF, an organisation I hold in high regard. I can assure the Deputy that the funds, whether Structural or Exchequer, will be provided.

Mr. B. Smith

When Enfield farm is offered to public tender, can the Minister ensure that it will be kept for cattle breeding and livestock research purposes, either by the coming together of the breeding societies or under public ownership, possibly by Teagasc?

Mr. J. Walsh

It is intended that the valuable animals at Enfield farm and its provision of services will be made available for offer by public tender to interested concerns. I expect breeding societies, either singly or collectively, to make an appropriate bid for the farm and retain the stock and services there for the benefit of our farming community.

Mr. Crawford

Will the Minister ensure it does remain as an identity for breeding purposes?

Mr. J. Walsh

That is the general idea. I hope breeding societies will bid for this farm. I expect they will. Enfield farm is a well established centre where they have valuable animals. I cannot see what use it would be to any other society or organisation. I expect it would become available to one or more of our breeding societies for the improvement of our livestock.

Mr. Crawford

Will the Minister go for the highest or best offer or will he take the long term interests of the breeding industry into account?

Mr. J. Walsh

The sale will be advertised publicly and made available by way of public tender. When the tenders come in, they will be assessed and evaluated. The final decision will be taken according to the national interest.

Mr. Crawford

Is that in money terms or the long term benefit to the industry?

Mr. J. Walsh

All interests will be taken into account. On balance, the final decision will be based on what is best for the national interest. It will not be entirely a monetary evaluation.

Chairman

We will now go on to subheads J.1. to L.

Mr. Crawford

I welcome the increase in the provisions for food aid programmes. However, when they are broken down, one sees that some of that figure will go towards meetings to be held in County Kerry. I am not sure that will be of much benefit to the Third World.

Another issue to be considered is the ongoing funding by the Department of Agriculture, Food and Forestry of the legal teams in the Beef Tribunal. Miscellaneous services have already been discussed. The Minister has already said that the provision for those who suffered in the horticultural sector will be increased from £1.94 million to approximately £2 million. The Minister has not yet made any statement as to what will happen to tillage and beet growers. In my initial address, I asked what had happened to the Land Commission. I thought it had been wound up some years ago, yet it is still on the record of this book. Does the Minister intend, by this increase, to prolong its life? Does the Minister have any viewes on what should be done with the long term structures of land in this country, taking the restrictions of our membership of the EU into account? If young farmers are to stay on the land, something must be done about it.

Mr. Killeen

On subhead L., a good deal of extra activity has arisen because of the farm retirement and other schemes on land ownership. There is some difficulty and considerable delay in getting records on these matters from the Cavan office. There are also difficulties with the level of staffing there. In some cases people suffer a substantial loss of income because of their difficulties in getting particular documentation. I am aware of two cases where people have sought Land Commission records relating to transactions in the 1930s or 1940s to establish their ownership of land. Another problem involves the acquisition of a piece of property. There is some difficulty in getting a decision on it.

Mr. J. Walsh

The Land Commission, which was referred to by a number of Deputies, has been dissolved. However, there is some residual and commonage division work being carried out by Land Commission inspectors. I will take up the specific issue of delays and problems in the Cavan office raised by Deputy Killeen and I will see in what way and to what extent they can be ironed out.

Deputy Crawford raised a question about horticulture. There is a scheme currently in place to assist horticulture growers who suffered losses because of the heavy rainfall last year and payments will commence this week. They are expected to be approximately £2 million, although £1 million was the original allocation. Therefore, we were flexible and generous in our allocation. The fine details of that scheme were agreed on by those concerned. I hope that matter has been satisfactorily resolved.

Mr. Crawford

Is there any aid for beef or tillage farmers?

Mr. J. Walsh

Flood damage was discussed with the farming organisations and representatives of the agricultural industry and an agreement was reached with them. At my final meeting with the farming organisation I said this scheme could be put into place to put money into the hands of those, especially the north Dublin growers, who suffered extensive damage and wanted to get their enterprises going as quickly as possible. If the extension of this scheme to other categories of farmers was contemplated, the evaluation would have to be restarted. A new survey would have to be done and this would delay the matter considerably. The farming organisations have agreed to go ahead with this scheme.

I pointed out to the delegation I received from County Wexford who were seeking aid for cereal damage that considerable amounts of money were paid out in area aid under the CAP reform last year. In County Wexford alone, cereal farmers were paid in excess of £6 million. We are referring to £2 million here for horticultural growers. The scheme is worthwhile and has already been agreed by those most affected.

I also wish to refer to a matter relating to the long term future of land ownership and the measures taken to improve its structures. The farm retirement scheme is an accompanying measure to the CAP reform. While there was inordinate interest in the scheme throughout the year, with large meetings being held throughout the country, the fact is that to date 30 farmers have availed of the scheme and are being paid. I am pleased to report that the majority of them are in County Cork. They have released their land and its management to young, well qualified farmers.

Notwithstanding the fact that there is a great attachment to land in Ireland, we hope that a significant number of people will avail of the farm retirement scheme and allow young farmers to take over the management of land. I am satisfied that the £7.5 million which we have allocated in these Estimates will be adequate to cover the number of farmers who will, finally, complete the full application process of the scheme.

We have also improved the installation aid scheme for young farmers taking over a farm. The scheme provides a good grant which helps them to become established in farming. In addition, there was a substantial concession in the Finance Act, 1994, regarding stamp duty. Macra na Feirme, espeically, lobbied for a long time on this matter because in some cases it caused severe difficulties. I was pleased therefore, that we were able assist in that regard.

These measures, the farm retirement scheme, the installation aid scheme, the concession on stamp duty, and the substantial concession on the capital acquisitions tax, will be helpful in improving the structures in farming and the age profile. In Ireland only 15 per cent of farmers are under 35 years of age which confirms that there is a difficulty with the age profile. We are seeking to address this difficulty with the aid of national schemes and the assistance provided by measures from the EU.

Mr. Crawford

The Minister referred to the farm retirement scheme, the installation aid scheme and so on. It is significant that, to date, only 30 farmers have availed of the farm retirement scheme, despite the fact that every month the scheme is advertised to farmers on the basis that they will obtain a full benefit of £800 per month. There appears therefore to be a problem.

Chairman

I must advise you, Deputy, that this issue will be addressed under the following subheads. You will have ample time to address the matter then. I am not trying to restrict the debate, but the committee must proceed in an orderly fashion. I ask you, therefore, to delay your comments.

Are there any further questions on the subheads presently under consideration? As there are no further questions I turn to the Estimates in respect of schemes operated in the implementation of EC regulations and Directives. There are 19 subheads in this grouping and I suggest that by virtue of the fact that they all refer specifically to regulations and Directives they should all be considered together. Is that agreed? Agreed.

Ms O'Donnell

Regarding the compliance audit with EU Directives, Ireland is not performing well. Mention was made in the House of an information deficit regarding our participation in Europe and in view of this Ireland's compliance deficit must be considered.

I asked the Minister to outline all EU Directives in respect of the Department of Agriculture, Food and Forestry which have not yet been transposed into Irish law. It appears that 76 Directives have been adopted by the EU Commission but await transposition into Irish law. Of these, the date for transposition has passed in respect of 60, which is a serious matter and, in respect of 31 of the 60, a letter has been sent by the EU Commission to Ireland threatening infringement proceedings. In respect of 12 of the 76 a recent opinion has been issued by the EU Commission to Ireland for non-compliance. Proceedings are pending against Ireland before the European Court of Justice in one matter and Ireland is in breach of judgments of the European Court of Justice with regard to four Directives.

This audit on non-compliance must be considered. The European Communities Act, 1972 ensures that the Department of Foreign Affairs has responsibility for Ireland's overall compliance with its European obligations. From formation from the Government to date, neither the Department of Foreign Affairs nor the Oireachtas Joint Committee on Foreign Affairs has considered the rate of compliance.

There should not be an automatic or blinkered response to all Directives. They must be debated because some Directives can have a detrimental impact on jobs and productivity and everything must be judged from the perspective of the impact on jobs. However, it is time that some mechanism was established, perhaps by way of a special committee of the House, to deal with this issue, as no committee of the House is considering our compliance rate and the possible impact of Directives on our economy.

It is the belief of my party that overregulation is a bad thing. It can be counter-productive and it is time to have a political debate in the House on those Directives which are coming on stream, which have not yet been transposed into Irish law and which require transposition. Nobody is keeping an eye on this at present.

This is why I raise the matter with the Minister and I ask him to respond on those Directives which have not yet been transposed into Irish law, especially those in which Ireland is in flagrant breach of decisions of the European Court of Justice. Would the Minister agree that there must be a debate in the House on the issue or absorption and transposition of EU regulations and how they will affect Ireland? Does he agree that this area has been neglected and Ireland's compliance, or non-compliance, is unobserved and not getting enough political attention?

Mr. B. Smith

The Minister will be aware that there is a need for an early start to the scheme for the improvement of on-farm dairy facilities. If approval of the operational programme is some time away could this scheme, and the new scheme for the control of farmyard pollution, be put in place in advance of European approval? Will the level of grant for those two schemes be modulated on a basis such as the size of milk quota or farm size?

Mr. Crawford

An arrangement of the operational programme is required as quickly as possible. The increase of 50 per cent is wlecome but there is no point in having an increase unless farmers can get started on the job at a time when the weather is suitable. Will the level remain at £34.29 million or will it be affected by the possible decrease in funding from Europe on the operational programme?

There is an increase in 65 per cent in aid to farmers in certain less favoured areas. Does this increase allow for the reclassification and the extension of disadvantaged areas? When will the Minister stop beating about the bush and be in a position to announce, once and for all, that all of Counties Cavan and Monaghan will be declared a severely handicapped area?

Aid to producer groups is important. While I appreciate that matters involving pigs and poultry are generally not dealt with at EU level, some aid could be given to these sectors through the formation of producer groups. However, I have been told that it is difficult for a producer group to be set up and recognised, even within the lamb or livestock sector. This issue was raised in Brussels some time ago and I had hoped for more movement on it.

The new programme announced by the Minister of State, Deputy Hyland on farming and environmentally sensitive areas needs staff and we must advise farmers on how it will operate.

The Minister stated that only 30 farmers have been paid under the farmer retirement scheme. This is an indication of the need for a rethink on how the scheme is promoted at ground level. I recognise that Department officials attended large meetings throughout the country and answered questions from the floor. Anytime I rang the Department it was very helpful but in many cases farmers and their legal advisers would like to be able to sit down with somebody at Teagasc or, at least, local level to iron out the technical difficulties and make absolutely certain before they hand their farms over to their sons or other purchasers or lessees, they will get this grant. The grant is reasonably generous and is welcome. It could give a major impetus to restructuring the farming sector. The Minister gave full credit, as I do, to Macra na Feirme for their initiative in trying to get a decrease in stamp duty. It is no harm to remind the Minister that stamp duty was not an issue before his party went into Government some years ago. The decrease in stamp duty is welcome and is long overdue. Figures clearly show that the extensions to the initial stamp duty relief had enormous effects in allowing land to be transferred. I hope the new reductions will encourage farmers to hand over their land and avail of the retirement scheme. If these schemes are to operate smoothly, we must have staff available to farmers, either from Teagasc or the Department. The main part of the funding for the farmer retirement and installation aid schemes comes from Brussels. Many farmers had to wait for years to have their applications for installation aid processed. We must avoid delays in this and in the retirement scheme.

Mr. Kileen

Capital investment by farmers, which is provided for in subhead A.1, has been very successful, especially in the control of farmyard pollution. There has been excellent co-operation between the Department at different levels and farm organisations and farmers. However, the scheme is restrictive for farmers who have off-farm incomes. A farmer must have an income of less than £15,000, 50 per cent of which must be farm income. This remains a difficulty. In the area I represent, many people are part-time farmers. The control of farmyard pollution is important in environmental terms. It would be beneficial from the environmental and agricultural points of view to extend this scheme to people with off-farm income, on the basis of a farm plan agreed with Teagasc.

The Minister stated clearly that many of the criticisms of delays in premium payments have been mischievous and not based on fact. The strong fear in farming circles that the shift from market support to direct payments to farmers will not continue in the medium term has not been addressed. There is fear that the EU funded schemes will be discontinued. Premium and other payments are effectively the profits of many farmers who would not survive without them. The Minister dealt with this at length in his speech but it needs to be stressed that a programme has been in place for a number of years.

Deputy Brian Fitzgerald made the point that the Department probably needs a more effective publicity campaign that it had heretofore. This is very much the case on the timescale for headage and premium payments. There have been minor difficulties, some because farmers made mistakes but others because of restrictive conditions. The Minister has had some success which I welcome in having some of these addressed at EU level. Enormous difficulty arose because farmers filled in their forms from cattle identity cards rather than from ear tags. Those forms would have been completed on wet days when farmers were unable to bring in their cattle. This condition has been stressed too much and the difficulty arose because of genuine mistakes by farmers who have been over penalised. The circular scheme for friesian cross cows has also caused difficulties and could have been dealt with more liberally, although I understand the Minister was probably constrained by European regulations. He made a strong effort to overcome this in the short term for the first year or two.

The role of the banks has not been mentioned. In a substantial number of cases farmers were put under enormous pressure, in spite of the banks being aware at local and central level that these payments, issued by the Department of Agriculture, would be paid. This should be addressed.

The Minister should be flexible on quotas. When young farmers go into business, on foot of an agreed farm plan an extra quota should be available if this can be negotiated at EU level.

Subhead M.9 deals with the operational programme for rural development and farm diversification. Deputy Connor spoke about a study on milk producers. Will the Minister on foot of that study consider setting up of a pilot programme for milk producers? He could easily tell me that while I am making representations to maintain farm quotas within the county, I could also make representations for individual farmers selling land with quotas to people in his county or elsewhere. This is the nub of the difficulty. People from outside areas with stronger milk production are in a position to outbid local groups. The Department, in co-operation with the co-ops and farm organisations could put together a small pilot scheme to see if the effects outlined in the report occur. The Leader II programme is about to be announced and I understand that changes in the structure are proposed at Europen level. Is there an insistence under the new Leader programme that local authorities or public bodies be involved? Leader I has been very successful in areas such as my county and it would be a tragedy if Leader II was not to go ahead. A network has been set up which can make a great contribution to the development of rural areas in places such as Clare.

Ms O'Donnell

I do not know if this is appropriate under subheads M.13 and M.14, but has the Minister a policy on the increasing problem of over grazing by sheep? Perhaps it is related to the headage payment system. I have been alerted by environmentalists that this is of increasing concern in some areas, particularly in Donegal and Kerry where sheep are overgrazing the hills causing long term environmental damage. This will also have long term effect on tourism. Has the Minister addressed this and what can be done about it?

Mr. J. Walsh

On the transposition of directives from the European Union raised by Deputy O'Donnell, we are complying with all of the directives either through transposition or by administrative arrangements. In some cases, we cannot transpose the directives because the Commission has yet to make detailed rules on them. We are making new arrangements to expedite the transposition of those directives with which we can now proceed. The Department of Agriculture, Food and Forestry has the largest number of directives to transpose and has transposed more directives than any other Department.

I am concerned about over grazing and in certain parts of the west, in particular, over grazing is doing considerable damage to the countryside. Under the REPS programme for environmentally sensitive areas, provision will be made to improve housing for sheep farmers and to implement other measures to combat this problem. A sum of £230 million is provided under the REPS programme and overgrazing will be addressed under that scheme. The extension and reclassification of the disadvantaged areas was completed and submitted to Brussels last November. The appeals panel will complete its work in the near future and that report will be submitted to Brussels. The decision on both the extension and reclassification can only be taken after examination by the Commission and the European Parliament and subsequently a decision by the Council of Ministers. There is a Government commitment to implement that decision. We are in the hands of Europe in those matters and as soon as we get the go adead we will implement those schemes.

Concern was raised as to staffing for the REPS scheme, the farmer retirement scheme and the accompanying measures. A considerable amount of finance is available from Europe under those schemes and, as Deputy Crawford said, it would be a pity if we were not able to make maximum use of the schemes. Sufficient staff will be available to operate the schemes and to assist farmers. There is provision in the Estimate for additional staff for the Department and Teagasc and for additional software and computer services.

With regard to on-farm investment a fixed sum of £34 million is earmarked for this year. There will not be any reduction in that. This subhead includes farm investment programmes under the dairy hygiene and pollution control schemes. We have submitted the overall national plan to Brussels and as soon as we have even an informal decision we will go ahead with on-farm investment programmes. I know from my contact with farmers that they are anxious to upgrade milk facilities and pollution control facilities. They had hoped to do so earlier this year when farming generally was quiet. We are anxious to go ahead with that but we must await European Union approval which I expect to be given in four or five weeks at the most.

The Leader programme was very successful in the pilot areas last year and some very valuable projects were funded. The Tipperary Leader scheme ran into some well highlighted difficulties but they were sorted out. We put additional controls in place following that experience while at the same time giving flexibility to local groups to come up with their own projects. There will be substantially increased European Union funding under Leader II — in excess of £1 billion over the period of the programme for the European Union as a whole. Ireland should get more than its proportionate fair share of that funding. We expect the Commission to adopt the Leader II proposal in June this year and we will then select Leader groups. That should be in place by November which will allow the new programme to begin from that date. We expect that Leader II will cover the whole country.

The question of producer groups for pig meat and poultry sectors was raised. This has been examined by the Department. There is a difficulty there because the integrated structure of these sectors does not lend itself to benefiting under the current producer group scheme. The structure of the producer groups is laid down by European Union Council and Commission regulations which do not cover pig meat and poultry. If a convincing case is made to me I can raise this matter again. I know that the producer groups do very valuable work and I would like to see them used on a wider scale.

Deputy Killeen raised the concern of farmers about the shift to direct payments and whether those direct payments will continue or if the tap will be turned off after four or five years. When we concluded our CAP reform negotiations, commitments were made by the Commission and the Council of Ministers on the permanency of direct payments. I do not believe there is any worry in that regard. There was no question of making direct compensatory payments available for a few years and then terminating them. We are keeping the budgetary provision for compensatory and direct payments under close scrutiny at European Union level.

Milk quotas were referred to by a number of Deputies and I have, to some extent, dealt with that already. While implementing and staying within the spirit of regulations, we are seeking to redistribute milk quotas to those who need them most and can best make a living from them. In all redistribution and restructuring schemes to date, we have endeavoured to help smaller milk producers. We are seeking European Union approval for a subsidy to help smaller farmers and for a measure which would allow the retention of milk production in the west.

Deputy Crawford had some concerns about the early retirement scheme. The Department and Teagasc have given advice and made themselves available at information meetings throughout the country. They have been as helpful as they possibly can. I attended a number of meetings in west Cork where I spoke to large numbers of people about the scheme. People from the Department and Teagasc were also there to give information.

With regard to the actual transfer of property, the best advice I can give to any farmer is to go to his solicitor. The sooner the legal aspect is attended to, the sooner payment can be made. To date, 30 farmers have gone through the process. We would encourage more farmers to avail of it.

Deputy O'Donnell raised the important question of European Directives. I recall being a member of the committee on secondary legislation of the EC which did much valuable work. The current President was a member of that committee. I assume it is still in existence. Work could recommence on that when the European parliament elections are over. If that is not appropriate it could be dealt with by the foreign affairs committee.

I accept Deputy O'Donnell's view that these Directives and regulations influence greatly what happens in Ireland and should be discussed. The problem when I was a member of the committee was that many of the Directives had been in operation for a number of years before we got around to discussing them. We should be more up to date in that regard because these Directives have a major bearing on a range of matters and activities in the agricultural area and others. I will personally examine this matter to ensure that these regulations and Directives are adequately discussed.

Mr. Crawford

The Minister had much to say about poultry and beef producer groups. Is there any provision in this budget for some support for the pig industry? This has been promised for some time. It is great to see Deputy Killeen battling on behalf of the Minister. He said that he took exception to the fact that Deputies were being mischievous.

One has only to refer to any Order Paper to see the number of queries from Deputies on both sides of the House about non-payment. These do not just come from Opposition Deputies. Any Deputy in the House can tell one that there is a problem in this area. It is, at its mildest, naive to suggest that we are being mischievous in raising legitimate political points on behalf of unpaid farmers.

The Minister said that we have to go through all the EU regulations on severely handicapped areas. When we can hope to have an announcement about aid to purchase milk quotas? Creameries are holding back the distribution of milk quotas at present as they are waiting for guidance. We do not want a repeat of what happened last year when, for almost 12 months, farmers did not know where they stood.

The Leader initiative was very helpful but I am worried that it will be spread too thinly and will be meaningless even for those groups who do reasonably well out of it.

Mr. Killeen

I want to give a brief personal explanation. I would only suggest that Deputies are mischievous if they are giving misinformation to farmers. I appreciate that there are genuine difficulties. I am aware of them and on occasion I have pursued them myself. However, the Minister has pointed out that there are EU regulations which prevent him from making payments until a particular date. There are Deputies who either did not know that or did know it but mischievously stated otherwise.

Chairman

Can we move on? I would prefer to end on a harmonious note.

Mr. J. Walsh

I would like to refer briefly to a couple of the matters. With regard to the purchase of milk quotas, my case to Brussels was made in conjunction with the prices issued this year. I expect the matter of prices to be concluded at the meeting of the Council of Ministers next week. When that is concluded, we will put the scheme into operation. That should help smaller producers in the purchase of milk quotas.

Mr. Crawford

Is that really essential? While I would support that, it is just a matter of trying to get a deadline and providing farmers with some guidance.

Mr. J. Walsh

I said in my speech that the pig industry went through a difficult time last year. Last week the prices were a little more stable. We introduced new marketing measures through CPF to help the pig meat industry which is worth helping. We have put a significant amount of money into the processing side of the industry. I hope the measures I announced will be helpful.

Far be it from me to get involved in any mischief making but I have noticed while reading Dáil Questions that where there is a query about why someone was not paid the full amount due, very often that person was only entitled under the regulations to the advance payment. I find it a little disconcerting that some Deputies representing rural areas ask questions about payments which have already been made. Their network could be improved and their advisers should give them better information.

Mr. Crawford

I wish we could get the information we need from the Department. It is totally unavailable. We would not have to ask questions if we could get the information.

Mr. J. Walsh

I set up a help line to deal with that.

Mr. Crawford

I said that earlier.

Mr. J. Walsh

There are some very pleasant staff involved in the running of that help line.

Chairman

That concludes the consideration of Vote 31.

Vote 32 — Forestry.

Mr. B. Smith

I take this opportunity to put on record my serious concern about the level of purchase of land by Coillte Teoranta. This is a particular problem where land is marginal. In my constituency, there are far too many instances of Coillte Teoranta, private forestry companies or individuals purchasing land and thus depriving young farmers in that area of the opportunity to make their holdings viable.

The present day activities of these companies and individuals will cause huge problems in the future, particularly in terms of rural depopulation. I ask the Minister to address this issue as a matter of urgency. There should be a land authority or some such body to regulate the purchase of land to ensure that farmers are not deprived of the opportunity to enlarge their holdings and make them viable.

Mr. B. Fitzgerald

The increase in the Estimate is most welcome. It has increased from £23 million to £49 million in relation the operational programme for the promotion of forestry. However, if this money is not directed to the right areas we will not avail of forestry's true potential. There would be no employment in many rural areas if it had not been for Coillte Teoranta's forestry services over the years. Unfortunately, there has been a major decline in that area. Few other industries would consider moving into it and there has been a decline in rural population as a result of the decline of Coillte Teoranta. Over the past two or three years, the number of Coillte Teoranta employees has reduced by at least half. This happened because its budget was continually being cut and it had no other option but to enter into a redundancy programme involving people who had worked in the forestry service all their lives. The black economy has been rampant in the forestry sector for years. The more services go outside Coillte Teoranta's ambit, the more people will avail of or use the black economy.

The Minister referred to the required quality of timber. As a result of the major reduction in employment in forestry services, forests have been neglected. There has been little fencing, drainage, road making, pruning or removal of wind falls. Trees are just left lying there. Some of our forests have been destroyed by the lack of people employed. More people will remain in rural Ireland if more are employed in forestry. I have often discussed with people why they continue to live in areas when they have just a small land holding. They say it is a way of life and if they can secure employment in forestry, they will continue to live there. This would reduce the pressure on towns and villages. The money is not being used properly at present, particularly when the funding has increased.

I take Deputy Smith's point. I have seen such an example in my county. One farm of approximately 500 acres of the best possible arable land is being used for forestry by the farmer. One year it had a crop of wheat but the next year a crop of hardwood trees, which will be there for 40 years, was planted. That land is completely tied up. If forests are planted through Coillte Teoranta, at least it can be done in a structured manner. In addition, the true employment potential can be reached, with decent employment to maintain the rural population in such places as Counties Cavan, Monaghan and Leitrim. Nobody would consider setting up an industry of any sort in parts of those counties, unless perhaps it was related to agriculture in a minor way.

Some control and clear direction should be given in relation to where this funding will be spent. It is welcome and there is a great need for it, given that there is only 7 per cent forestry coverage in this country, while the aim is 10 per cent, and the average in Europe is 20 per cent. We have potential and people that we need to keep. They are our greatest resource but we are not tapping this industry properly. I hope that a clear direction will be given.

Mr. Crawford

There is great anxiety regarding the take-over of good agricultural land and I am glad my colleague, Deputy Smith, aired it. We must have some ideas about where we are going in this area. We must decide whether we want foresty through a planned structure or wherever people decide to engage in it. I am concerned about people living close to laneways or by roads who discover, after work has begun, that the farm in front of them is being planted with trees and that their farm will be isolated. In light of the recent great difficulties of families in isolated areas in south Galway and Clare we must be aware that we are not isolating farm families or forcing them out of rural Ireland by unplanned forestry promotion.

In relation to administration, the increases in some areas are welcome. However, one wonders how the situation will be improved on the ground. As another speaker said, there has been great difficulty in trying to properly maintain and control forestry, particularly with regard to forest parks such as Rossmore in County Monaghan and others. Forestry has much potential for tourism in the future but the upkeep of forests cannot continue or be maintained with the current level of staff in Coillte Teoranta. It is forced to operate on a commercial basis and that is correct. However, other aspects must also be considered.

I implore the Minister to take the requests of the Governemnt backbenchers seriously. The Opposition did not raise this matter today. Government backbenchers raised the issue of proper decision making and control regarding where forestry will be introduced and maintained in the future. It is definitely a project that should be carried out on marginal land. Places such as Roscommon, Longford and Galway were recently designated as severely handicapped areas. They have good land but my area is made up of bog and mountain and it is not classed as severely handicapped. This leads on to question where forestry is and should be taking place. I ask the Minister to take the requests of the Government backbenchers and the Opposition seriously in this area of planning.

Mr. J. Walsh

I accept that there are concerns in relation to the afforestation programme. Having regard to that, I initiated the preparation of a strategic plan for the development of the industry up to the year 2015 to ensure that there was a planned programme. This is the first such plan ever undertaken by an Irish Government. It recognises the rapid development of forestry in Ireland in recent years and anticipates a continuation and intensification of the pace of development in the years ahead. The scope of the plan will be very broad and the intention is to ensure that there is coherent development of this valuable industry.

The work of preparing this plan is well under way. I have appointed consultants to assist me in the task. As part of the process, I have been anxious to afford all those interested in forestry the opportunity of putting foward their views, ideas and concerns. If any individuals, farmers, groups or organisations want an input into this review, I would welcome them. I am delighted that over 100 such submissions have been received so far. This exercise is of great significance in terms of ensuring that the major investment in forestry in recent years, which will continue over the years to come, will generate the best possible return for people in rural areas. The question of Coillte Teoranta's acquisition policy was referred to by a number of Deputies. The position is that Coillte Teoranta is currently afforesting 7,000 hectares per annum; farmers 11,000 hectares and non-farmers 3,000 hectares. That is the afforestation line-up. The vast majority of this afforestation takes place on land that is marginal to agriculture and this is evidenced by the fact that the average price paid for such land is less than £600 per acre while the top price of £800 per acre. In west Cork one would not get any acreage, good or bad, for £600. Coillte Teoranta are out of business in auctions and private treaty sales as far as the southern part of the country is concerned. Coillte Teoranta complete approximately 400 individual acquisitions of land in any one year and in the overwhelming majority of cases these acquisitions proceed without difficulty. I accept the concerns raised by Deputies Brendan Smith, Brian Fizgerald and Crawford that in a minority of cases concerns are raised by local people and in a handful of cases, where a pocket of good land may be included in the acquisition of forestry land, disputes can arise. Coillte Teoranta's approach has always been one of flexibility and its policy is to co-operate with local farmers and their representatives in order to resolve any issues that arise to the mutual satisfaction of both sides. This policy of flexibility is one that I endorse and if there is any requirement for me to remind Coillte Teoranta again I will be glad to do so.

In so far as the issue of Coillte Teoranta driving land prices upwards is concerned, the reality is that Coillte Teoranta is losing out in auctions and private treaty sales to such an extent that they are well behind in their land acquisition targets. As anybody knows, good agricultural land is making at least £2,000 per acre and if there is a quota with it it is going far in excess of that.

Members will recall that our colleague, the Minister of State, Deputy Hyland, has recently set in train a review of controls on the scale of forestry development including the effectiveness of planning controls in this area. This review, which is being undertaken by the Department of Agriculture, Food and Forestry in conjunction with the Department of the Environment, will en compass an examination of the current thresholds for planning permission in respect of forestry developments. As part of this process we have invited an input from a range of interested parties including local authorities. I expect that that review of planning regulations will help to allay any fears because the whole idea is to have this ambitious afforestation programme in place to develop the forestry resource in a coherent way by maximising the value added by various companies. We have some very modern, world-class, saw mills and have attracted companies such as Medite in Clonmel which employs a large number of people, as well as the OSB mill in Waterford which has recently been going through the planning process.

I envisage that in the next five or six years we will have a planting programme and further development of the existing forestry resource in addition to new jobs in converting that valuable forestry resource into added value products for exports. There is a shortage of foresty products throughout the European Union from which I hope and expect Ireland can benefit.

Concern was expressed about Coillte Teoranta's job losses. Some rationalisation has taken place because Coillte Teoranta was established as a commercial State body, is operating commercially and has to pay its way. It has had to rationalise in the same as any other company had to but it has all been done on a voluntary basis. We expect to increase the number of jobs in the sector following the review of developments in forestry, the development programme up to 2015, and major investments in the processing of our timber. For example, £21 million was invested in Medite where recently there was also a re-investment for an extension providing 180 new jobs. In the case of Louisiana-Pacific, 500 jobs are being provided and I expect there will be an increase.

Deputy Brian Fitzgerald raised the question of the black economy and I will be glad to bring this matter up with my colleague, the Minister for Social Welfare, to ensure that people in employment are not double-jobbing and that they come within the various social welfare and PAYE regulations. The situation concerning the black economy has improved in the forestry sector where various jobs are now done by contract work. The matter has been substantially regularised.

Mr. Crawford

How many jobs have been lost in Coillte Teoranta? Has the Minister any idea how many jobs this forestry programme will produce over the next five-year period? In the north and west it would not seem very productive at present as most of our timber seems to be going across the Border. The Minister of State, Deputy Hyland, promised that this was one of the big job creation areas but as far as I can see it is slow to start.

Mr. J. Walsh

In relation to jobs, the position is that in processing — Medite, OSB sawmills and Finnsaw — and in the afforestation programme itself, in the order of 2,000 jobs have been created. At the same time, due to rationalisation in a number of other areas, 900 jobs have been lost since 1989.

Chairman

We will take questions now on the final group of subheads B.1. to E. If there are no questions that concludes our consideration of the agricultural group of Estimates. On behalf of the committee I would like to thank the Minister, Deputy Walsh, and the Minister of State, Deputy O'Shea, and their officials for the very detailed documentation they provided for Members as well as the manner in which both Ministers answered questions. I would like to thank the Members for their participation and the staff. I would remind Members that we will meet here again at 11 a.m. on Wednesday, 25 May 1994, to consider Estimates for the Department of the Marine.

Mr. Crawford

I would like to record my thanks to you, Chairman, as well as to the Minister and his staff for their cooperation.

The Select Committee adjourned at 1.50 p.m.