I welcome the Minister for Agriculture, Food and Forestry, Deputy Yates, Mr. Tom Arnold, Assistant Secretary; Ms Marian Byrne, Mr. Brendan Gleeson and Mr. Cathal Bayle.
Vote 31: Agriculture, Food and Forestry.
I welcome the opportunity to introduce this Supplementary Estimate for 1996 for the Department of Agriculture, Food and Forestry and to respond to any questions. The background is a difficult year for farming, especially when measured against 1995, which was an exceptionally good year. An increase in the value of gross agricultural output in 1995 of more than 5 per cent and in aggregate farm incomes in 1995 of almost 7 per cent, gave every reason for optimism at the beginning of 1996.
The increases in 1995 were due to a combination of buoyant prices for most products and a substantial increase in the level of direct income payments to farmers which rose from just under £670 million to almost £750 million — an increase of almost 12 per cent. Confidence was high that incomes could be maintained and perhaps even increased with good performances expected in the milk, sheep and pig sectors.
A decline, albeit marginal, was expected in the beef sector. However, we are all aware of the drastic change in the situation in 1996 and, although output value in the pig and sheep sectors looks likely to increase substantially, other sectors have come under pressure.
In the milk sector markets have weakened from the very high levels experienced in 1995 and there has been intervention buying in of butter and skimmed milk powder in a number of member states of the EU, including Ireland. Reflecting this situation, milk prices have come down somewhat from last year's very high levels, which, overall, are unlikely to be matched this year.
As a result of BSE, the beef sector is facing its worst crisis ever with prices substantially down on 1995 and supplies of heifers and cows well behind 1995 levels. Although European markets have recovered somewhat of late, in the short term there is unlikely to be a significant change in the overall prognosis. My Department is making every effort to minimise the extent of the negative impact of these developments on the industry and to provide for change. With those general comments as background, I would like to outline some of the details of the Supplementary Estimate.
A net Supplementary Estimate of £48.646 million is required. The additional requirements come under four principal headings — measures arising from the BSE crisis; disallowances or EU beef fines; CAP reform accompanying measures and capital investment schemes under the Operational Programme for Agriculture, Rural Development and Forestry.
Deputies will be aware of the impact of the BSE crisis. It affects a number of areas of the Department's Vote. Its impact in the administrative budget can be seen in the requirement for an additional £650,000 in subhead A2 for travel and subsistence and the requirement for an additional £250,000 in subhead A5 for computerisation. These additional requirements are partly offset by savings of £750,000 in subhead A1, salaries, arising from less recruitment taking place than had been anticipated at the beginning of the year.
In the case of subhead A2, travel and subsistence, additional costs of £650,000 are due to the implementation of controls by my Department in Border counties to prevent the illegal importation of cattle and beef products from Northern Ireland. Officers have also been transferred from other work areas into the meat inspection service to ensure compliance with various EU measures and to implement the recommendations of the beef tribunal.
In subhead A5, office machinery and other office supplies, the additional £250,000 sought relates to the first two phases in a three phased approach to information technology based BSE controls.
The first phase involves the installation of computer and communications equipment in the district veterinary offices in the 32 EU approved slaughter plants and 46 marts and export assembly points. It will allow the Department's veterinary staff access to details on more than eight million animals, based on headage and premia systems, in the implementation of new controls.
Phase two of the process is the development of an animal location file which will hold details of all animals for which headage and premia grants were paid, all animals slaughtered and all animals exported. Taking these two together, total expenditure during 1996 on improving computerisation in response to the BSE crisis will amount to £1 million.
The third phase will involve putting in place a fully computerised animal tracing system, provision for which will be made in the 1997 Estimates. This essential series of measures is designed to improve and maintain the marketability of our beef, and to allay any concerns about public health which lie at the heart of the current difficulties in the beef industry.
In the case of subhead C3, general disease control and eradication, the increase of £5.655 million is required to fund the payment of compensation to herdowners for animals slaughtered as a result of BSE positives. There are a number of factors in this increase. From an average incidence of about 17 cases per annum between 1989 and 1995, the figure has now increased to 47 cases as of 7 November. Since the beginning of this year there have been changes in our control arrangements as follows: on depopulation of the herds in which a case of BSE occurs, the meat from the carcases is no longer permitted to be used for human consumption. Instead the carcases are rendered and the resultant tallow, meat and bonemeal are stored awaiting destruction; the progeny and birth cohorts of affected cases of BSE are traced, purchased by the Department and destroyed in the same way as the depopulated herds; the brains of all the adult animals in the depopulated herds are now brought to the Department's veterinary laboratory and tested for BSE. Up to the end of August a total of 1630 such brains have been examined and all tests were negative; all animals imported from the UK are, when being culled from herds, purchased by the Department and destroyed. The last importation of such animals occurred in 1988 and the cows are now at the age for culling. Deputies will also be aware of the changes with regard to meat and bone meal.
These factors mean that a considerable extra sum is needed to compensate the herdowners at market value for the animals being bought and to pay for the transport, slaughter and rendering of the animals and carcases. A total sum of £8.432 million is therefore required for subhead C3 as against an original provision of £2.777 million.
The BSE crisis has had an effect not only on farmers, but also on agri-industry. A provision of £2.196 million is included in the Supplementary Estimate in subhead J3, aid to rendering industry. Deputies will recall they approved a Supplementary Estimate for my Department earlier this year to open a new subhead for a temporary scheme of financial assistance to the rendering industry and for the provision of a token expenditure subhead. As I indicated at the time, the scheme to store meat and bone meal was intended to provide transitional support of up to £2.5 million to the rendering industry for production and storage up to 21 May. The scheme achieved its purpose. The actual expenditure was £2.196 million as provided for in the Supplementary Estimate.
The reintroduction of intervention for beef in April 1996 provides the clearest illustration of the impact of BSE on markets. Subhead L1 — financing of the common agricultural policy — expenses in connection with market intervention and financing of other FEOGA guarantee section measures covers, inter alia,the technical costs of intervention, such as deboning allowances, handling, freezing, storage and transport charges, and the costs of borrowing to fund intervention purchasing. The increase of £17.934 million sought arises primarily because of the resumption of intervention for beef, with 60,000 tonnes of stock expected to be in intervention by year end, and because the costs of purchasing butter and skimmed milk powder into storage has been greater than expected this year, as international markets have been less buoyant than anticipated. The technical and financial costs of market intervention are reimbursed by the European Commission at pre-set rates. Expenditure under this heading will result in additional appropriations in aid amounting to more than £10 million in subhead N15.
Deputies may recall that a provision of £50 million was included in the 1996 Vote for my Department under subhead L2, market intervention losses by deficiency-accident etc., towards the cost of EU disallowances in respect of public storage operations in 1990 and 1991, and the audit of the EAGGF annual account in 1992. This provision had been made in the budgetary arithmetic before the final disallowance of £72 million was decided upon by the commission on 27 March 1996. As I explained to the committee when the 1996 Estimates were presented, a Supplementary Estimate is required to fund the balance of the disallowance. An additional £20.2 million is accordingly sought under subhead L2, with the balance of the disallowance taking the form of a reduced receipt under subhead N15. That would be payments from Europe to Ireland.
The next focus of this Supplementary Estimate is on two of the CAP reform "accompanying measures", REPS and early retirement. These schemes, intended to contribute to the structural reform of Irish farming, have proved tremendously popular in recent years. An increase of £15 million is sought under subhead L4 for REPS. This will bring the total allocation for 1996 to £56.6 million, reflecting the increased demand for the scheme. This additional expenditure has been approved by Government, on the basis that £7 million would be funded by savings arising from the introduction of a restructured eradication scheme for bovine tuberculosis and brucellosis on 1 April 1996. There are now 20,000 participants in the scheme and up to 2,500 additional applicants are expected by year end. Seventy five per cent of costs on REPS are recouped from the EU Commission, therefore the net cost of this increase to the Exchequer is £3.75 million. Like REPS, the early retirement scheme for farmers has proved tremendously popular. An additional £3.5 million is sought for subhead L5 because of the greater than anticipated demand for the scheme. This will bring total expenditure on the scheme in 1996 to almost £44 million. It is anticipated that approximately 5,000 applicants will have joined the scheme by year end, with 1,700 of those joining this year. As with the other accompanying measures, 75 per cent of the costs of this scheme are recouped from the EU, and the net cost of this increase is £0.875 million.
The capital investment schemes under the Operational Programme for Agriculture, Food and Forestry, 1994-99, have also proved very popular with Irish farmers. Subhead M1, on-farm investment schemes, provides funds for the control of farmyard pollution scheme, the farm improvement scheme, the dairy hygiene scheme and for the improvement of animal welfare standards.
Expenditure under the scheme for the control of farm pollution continues to rise as farmers carry out necessary pollution control work. I expect considerable numbers of farmers will have completed this work by year end and will urgently require the grant which has been approved for them on satisfactory completion of the work. The scheme has been suspended since April 1995 but my Department is still processing the 18,500 applications which were received by that date.
An additional £17 million is sought for subhead M1, primarily to fund demand for the control of farmyard pollution scheme, £14 million approximately, and also to fund current demand on the farm improvement scheme, £3 million approximately. This will bring total expenditure on subhead M1 in 1996 to more than £61million. As regards subhead M2, general structural improvement, extra expenditure is required specifically for the scheme of installation aid for young farmers as participation in this scheme has increased considerably since some of the conditions were made more flexible. This scheme is being independently evaluated under the Operational Programme for Agriculture, Rural Development and Forestry. This objective evaluation is likely to fully reveal the extent to which it is achieving its objective of encouraging the earlier transfer of farms to young farmers.
These increases in this Supplementary Estimate are offset by expenditure savings in a number of areas and by a net increase in appropriations in aid. The increase in appropriations in aid arises principally from proposed increases in expenditure in areas such as REPS, early retirement and market intervention, which will attract EU recoupment. Savings in expenditure arise principally from the radical restructuring of the eradication schemes for bovine tuberculosis and brucellosis, subhead C1 —£10 million, from delays in the submission of claims for reimbursement of legal fees incurred in the course of the beef tribunal, subhead J1 —£13.6 million, and from a slower than anticipated start up of the Leader 11 programme, subhead M9 —£3 million.
I will be pleased to provide further details on the items in the Supplementary Vote requested, should the Deputies require clarification. I commend this Supplementary Estimate for Vote 31, Agriculture, Food and Forestry to the committee.
I remind Members there is provision for questions and answers in the time schedule. There will an opportunity for Members other than party spokespersons to contribute.
This Supplementary Estimate is being discussed against the background of a crisis in the beef sector. The Minister's request for extra expenditure would be more easily given if we saw some better effect from the moneys which have been already spent. The BSE measures do not suggest there is a strategy and the extra allocation of £5 million for computerisation this year shows the long standing stop-go and stop again approach to this issue. Since March, we have sought extra expenditure in this area. When the committee debated the Estimates, the Minister suggested he had made an application to the Department of Finance for £14 million. He subsequently told the House that, as a result of the déb�cle of the exclusion of three counties, he would set up an immediate pilot scheme for those three counties. Within a week, it became a national scheme with a commitment to be up and running by Christmas but we now find that the amount allocated is only half that required.
We now hear computerisation of the national herd will be phased in. Clearly, it has not become the political priority of this Administration which the Minister had previously suggested. Why has the Minister not delivered on his promises? It is clear there is no political commitment at the Cabinet table or from the Minister for Finance to provide this money to meet the emergency. The phasing in of what everybody recognises to be a priority to restore consumer confidence at home and abroad is yet another indication of this Administration's complacency. If an industry for which another Department was responsible experienced such problems, Ministers of other political persuasions would have little difficulty finding the sort of money required to get this scheme up and running but the Minister, Deputy Yates seems to be a lone voice seeking resources in this Administration. Clearly, he is not getting much support at the Cabinet table for those resources as quickly as he would like.
The Minister for Finance considers it plausible to state there is over-expenditure of over £200 million this year throughout the Department despite the fact that tax revenue has increased by £400 million. We are told this Administration is very prudent financially. Yet with over expenditure of £200 million, the Minister for Agriculture, Food and Forestry is unable to obtain £10 million to deal with the computerisation of the national herd which, on his own admission, is a political priority in present circumstances.
That puts in perspective the fact that there are resources available. There is no problem. Many of the Departments are spending considerably more than that agreed by the parties when they decided to form a Government. They have exceeded those expenditure ceilings and yet, having flouted the parameters which they set down for themselves, this Minister seems incapable of obtaining £10 million to put what he regards as an absolute priority on the road by Christmas. I think the problems was that he did not say which Christmas he would have this up and running. It is clear it will not be Christmas 1996, on his own admission.
There has been an attempt to suggest computerisation will be phased in on a planned basis. The Minister mentioned the first, second and third phases of computerisation, the latter of which will be dealt with in 1997. Clearly, this is in direct contradiction with what he told the Dáil he would be doing when he was in some political difficulty as to his precise location at a critical time for the national herd.
With regard to intervention, I note it is expected that 80,000 tonnes of stock will be taken in this year. What level of stock does the Minister expect next year? How much extra money will be required in 1997 to continue with that?
On the cost of intervention and export refunds, the Council of Ministers under the Minister's Presidency ducked the structural problems related to the beef crisis at last week's meeting. It seems that the European response is that with falling consumption will come falling production. They see a decrease of 1 per cent per annum in red meat in the marketplace. It has dropped by 20 per cent over the past two decades. There are no proposals during Ireland's Presidency to boost consumption and reverse the critical situation in the beef sector because of BSE which has become particularly problematic since 12 March last. That structural issue has now been kicked into the Dutch Presidency by our man who had a golden opportunity to address the issue. Clearly, he has neither the inclination nor the political capacity to do anything about it. Why do we have a market intervention system which keeps the price of red meat to European consumers too high? Clearly, it is not attractive to the consumer at that price vis-�-vis the price of white meats yet we are spending millions of pounds on the intervention and export refund mechanisms to ensure people outside the EU will be able to eat the same beef at a much reduced price.
The question of food security, which was the basis of the Common Agricultural Policy, is no longer relevant. This Presidency needed to table a proposal within existing intervention and export refund resources to drop the price of red meat so that we could boost consumption and use the resources which go into the intervention and export refund systems at present as a further direct payment system to farmers to ensure they are able to continue in the beef trade. That basic structural issue has not been addressed. Unfortunately, we now find against a background of falling consumption and production, which will have a much greater economic impact on Ireland which depends on this industry to a far greater extent than any other EU economy, that this Minister's Presidency will maintain a policy which sees red meat at too high a price and falling consumption as an inevitable outcome of the pursuance of that policy. Meanwhile, we are in the crazy situation of depriving European farmers of a livelihood in this sector and depriving the European taxpayer, who pays significant amounts in market intervention supports, from the right to get meat at an attractive price which would boost consumption while we use European taxpayers' money to subsidise consumers outside the Union to buy this meat at a cut price. This Minister has allowed this crazy structural problem to be kicked into the Dutch Presidency and we can be assured that the cause of Irish producers will not be at the top of the agenda of the next Presidency or the Commission, which will submit a strategy at some stage to arrest the problem which has been further exacerbated by the BSE crisis since 20 March last.
That is the major disappointment to come out of those meetings. Of course the agreement to either a calf slaughter or a weanling buyout ensures that the cost of raw material for many beef farmers will rise and we do not know what leaks will occur from this herd in terms of exports for those countries which will be involved in schemes.
The Minister referred to CAP reform and the capital investment schemes. He makes great play of the fact that further additional money will be made available at a time when he suspended those schemes. Clearly, there is a need for further moneys to be made available when we are calling on farmers to involve themselves in environmentally friendly practices. Given the need to restore consumer confidence, there is no capital investment scheme in existence, probably for the first time in the history of the Department.
There is great concern at the way the dairy hygiene scheme was aborted because people were given only hours notice. The farm enterprise scheme was similarly aborted in a matter of hours. That sort of knee jerk approach to crisis management is an indication of the chaos obtaining in the administration of the Department at present. A slow rate of progress regarding headage payments, highlighted in today's Irish Farmers’ Journal, illustrates that the Department of Agriculture, Food and Forestry, under the Minister’s political direction, seems incapable of responding with requisite speed to disastrously falling farm incomes. The Department has also failed to ensure that farmers obtain the moneys they are entitled to as quickly as possible.
We will have an opportunity to discuss some of the subheads in detail but it is time the charter of farmers' rights was thrown out because it does not mean anything. The issue of making payments within a specified periods is a nonsense and it merely represents another PR exercise which has unfortunately blown up in the Minister's face. With regard to the installation aid scheme, I hope this is not a precursor to that scheme being similarly aborted and finalised under the guise of an objective reassessment of its importance to Macra. Other farming organisations have highlighted the need to continue with the scheme and increase the level of grant available, which has been static for a number of years. Its value is not as great as in the past because the level of funding available is not sufficient when inflation is taken into account. We will return to these issues when we discuss the Estimate.
The subheads will be discussed as the meeting progresses.
It is unfortunate that the second Supplementary Estimate of the current year for the Department of Agriculture, Food and Forestry should be so substantial. The total amount involved is £84.8 million. There are some savings on various subheads and a slight increase in appropriations-in-aid, but the figure for additional money being sought for different purposes is £84.8 million. That is startling. The main reason for much of the allocation relates to BSE which has had a very fundamental affect the Department's finances, the economy, public health and the credibility of food. It is interesting that one of the savings relates to a significant sum for the food advisory board. It had been intended to establish such a board but this has not happened. Apparently a new board is being substituted for the food advisory board. It is indicative of the Department's approach that that saving should have taken place because the question of food safety was not a priority until the advent of the BSE crisis. I fear that, had that event not occurred, it would not have been a priority.
The number of cases of BSE infected cattle has increased substantially during the current year. The Minister's recent forecast that the figure would treble before the end of the year has already come to pass. It is now a question of whether it will quadruple or increase by an even greater amount. In his reply, the Minister should provide an indication of the likely figures for the discovery of cases of BSE between now and the end of the year. There is a tradition that nothing should be said about this problem because that is the way such problems were dealt with in the past. This problem was dealt with in that manner by the Department until last week, when it came to light that a report relating to excessive residues of antibiotics in pork had become available. It was only when a separate report was published by the Consumers' Association of Ireland that the Department referred to the matter.
I was abroad earlier in the week, but I understand the Minister made a statement on Monday to the effect that he regretted that the information in the initial report had not been published by the Department. When were the Minister and the Minister for Health made aware of the findings of that report on antibiotic residues in pork, which was commissioned by the Department? The committee and the public are entitled to that information. If the Ministers' were not informed of the findings until the matter became public, that is a very serious situation. If I were Minister for Agriculture, Food and Forestry, I know what action I would take in that regard. On the other hand, if they were informed, they colluded in the suppression of this evidence which is important in the context of public health. That would be very regrettable. I understand the report commissioned by the Department was more extensive than that undertaken by the Consumers' Association of Ireland.
With regard to BSE and the culture of silence that pervades that problem, there are two matters which the Minister should elucidate. What is the time lag between the discovery of a case or suspected case and its ultimate publication in the official statistics? It appears that this period is quite long. Two of the last three cases of BSE were discovered in County Wexford and it appears that information relating to them was available between one and two months ago. However, it was only made public in recent days and everyone is aware of the consequences if that were the case.
This committee should also be given an exact indication of the time which elapses between the discovery of a case and the ultimate depopulation of the entire herd involved. We have been informed that this period can be as short as two to three weeks. However, I am aware of three cases, in two of which no allegations were made by the Department, where after three months depopulation has not occurred. That time lag is too long and it makes a joke of the Minister's protestations about speedy depopulation. It also renders somewhat hypocritical his criticism of the British for their reluctance to cull to the extent they should, as quickly as they should.
Will the Minister comment on the expenditure of £71.9 million on fines under this Estimate? Most of this relates to breaches of regulations in beef intervention. We have more evidence from Rathkeale than anywhere else, resulting in criminal proceedings. Some of those charged were employed in the factory and pleaded guilty. One pleaded not guilty and the case against him was thrown out as the judge said it should never have been taken. That defendant has instituted proceedings against the Minister and the Attorney General for the tort malicious prosecution and conspiracy against him. I do not know when these proceedings will be heard as they are awaiting the Minister's defence. However, there is clear evidence that the practices at Rathkeale of returning only 68 per cent yield and holding on to the remainder, frequently as high as 77 percent, were widespread throughout the entire organisation which owned the Rathkeale plant. The beef tribunal report noted this.
The company which owned Rathkeale also owned 12 similar companies. The amount of money involved must be huge. In this supplementary estimate the taxpayers are being asked to pay the balance of £71.98 million in fines imposed on this country because those breaches took place and the Department of Agriculture, Food and Forestry did not deal with them. That is wrong and the Minister should give a full explanation to this Committee of what steps, if any, he has taken to recover the sums from the people who benefited.
Up to recently no proceedings were taken apart from those at Rathkeale, which are for a total of £1.8 million. From what was said to the Committee of Public Accounts and in the Dáil it is unlikely that proceedings will be taken. It is shameful that no proceedings have been taken except in the case where the Department had no option because the whole thing was spelt out for them, even though the report states that the same practices were going on in a dozen other factories.
If proceedings are taken I find it difficult to see how the people involved could successfully defend themselves. However, they have no problem if they never become defendants. Given that so much money is involved, I find it remarkable that the Attorney General has not instituted proceedings on behalf of the State against this firm. It is one of the unfortunate aspects of the appointment of the present Attorney General that the problem of an admitted conflict of interest exists. Someone else might be more likely to pursue the matter which, apparently, has to be done with outside legal advisers. This is unsatisfactory, particularly when such a large amount of money is involved.
On 16 April 1996 at the Committee of Public Accounts I asked the accounting officer whether any action had been taken in respect of officials in the Department who forged the name of an individual more than 200 times on official sheets on returns of intervention beef. I was told that a major investigation was under way and the result would be available at the beginning of May when the Department would take whatever steps it felt appropriate. Obviously the Department thought that no steps were appropriate because everyone involved is still in place. It is remarkable that this widespread forgery should take place and the Department should be so unconcerned. One of the results of this is that this country has been fined an unprecedented sum of money. There was more celebration about the reduction in the fine than there was consideration of the fact that we were fined such a large sum of money for breaches in official supervision of activities which enriched a small number of people. Why have no criminal or civil proceedings been taken against those people? This is not good enough and it is wrong that this supplementary estimate asks the Dáil to pay out large sums of taxpayers' money because known people enriched themselves by breaching the law and no effort is made to recover any money from them.
It is remarkable that one of the prosecutions was against a man whose name was forged without his knowledge or consent, but those who forged it are free and retained in the employment of the State with the approval of their own Department. This is a serious matter which should be explained. Important issues are involved — BSE, the fines and a range of others. There are more than 20 subheadings, it is one of the biggest supplementary estimates I have ever seen and it shows the condition that agriculture and the administration in the Department are in. Not alone have huge fines been imposed by the European Commission but one of the conditions of the reduction of the fine was that a new accounting system for FEOGA funds had to be put in place and a new accounting officer had to be appointed. That does not seem to have happened yet but it is remarkable that it was asked for.
I will try to give as much scope as possible to this. The two main spokespersons and the Minister have spoken. The Order Paper provides for a question and answer session to allow other members to ask questions. I will then ask the Minister to reply. I will take Deputies Crawford, Boylan, Nolan and Ring in that order.
It is interesting to hear Deputy O'Malley say that this is the biggest Estimate he ever remembers coming before the House. I congratulate the Minister for having come through the most difficult period in the history of the State in trying to preserve farmers' rights.
That was not the spirit in which the statement was made.
Farmers will be pleased to know that the Minister has reached agreement to bring forward £17 million for pollution grants. How much did the Minister's predecessor allow, or think would be utilised, for the full four year period when he was planning his division of the £8.8 billion that the then Taoiseach, Deputy Reynolds, said was in the bag in Edinburgh? If those figures were correct and the truth had been told then, the problems the Estimate is designed to deal with would not have arisen. I accept the point made by Deputy O'Malley regarding the scandal that taxpayers should have to pay fines because of question marks over the beef industry. This occurred long before the current Minister's period in office, although some people now seek to blame him. What would they say about the £100 million that would have been owed if the Minister had not taken steps to have the fine reduced.
Long before I entered this House, I was campaigning for computerisation. Listening to some speakers here, one would imagine that BSE only hit us this spring. They have been well aware of it since 1989 but have done nothing about computerisation. I would like a commitment from the Minister to introduce this at the earliest possible date because it is the only way to control skulduggery. Some BSE herds have remained untreated for weeks or months and in the past brucellosis herds remained on farms from April to December when no urgent action was taken.
The majority of farmers appreciate the efforts the Minister has made to minimise losses that not only they but the nation had to bear as a result of this unforeseen crisis. Only three weeks ago some people in County Monaghan said that there would be a loss of £100 on every beast in the county as a result of the Minister's decisions. The people who made those statements — not just the farm organisations but at political level too — did farmers and the country a great disservice. Party spokespersons should think about how their Ministers dealt with difficult farming issues when they were in Government. Some of them are remembered as "lucky bag" Ministers because they only gave out pence in times of difficulty whereas this Minister has given out millions.
Later on, I would like to ask a few questions on individual items of the Estimate.
The Deputy is correct in saying that we will have an opportunity for further discussion on each subhead.
I thought I was at a by-election meeting in Carrickmacross when Deputy Crawford spoke because it is obvious that he has lost touch with the reality of agriculture. Much has been said by the Minister and others about traceability — a word that has been much abused. You cannot have full traceability without proper identification of ingredients in feedstuffs and compounders generally. While we are supposed to have a grass based industry, for much of the year concentrate feeding has to be given to farm animals. We are aware that the source of the BSE problem, which is a man-made disease, was imported feed and for that reason the agriculture industry is entitled to protection.
Consumers here and abroad must be able to identify what type of feed sources have been used to fatten and finish the animals but that matter is not being examined. In America they print the total ingredients on invoices and bags, even down to the vitamins used. We must seriously examine that issue if our society is to be consumer led and consumer friendly.
We heard recently about the question of antibiotics in the pork industry but there is a contradiction there. I do not put all the blame for this on the Minister because the Abattoirs Act and other legislation governs procedures for licensed bacon curers. The area should be consolidated to avoid the nonsense of ante-mortem and post-mortem status which exists under the Abattoirs Act. Testing for residues is not provided for under that Act whereas licensed bacon curers are subject to severe testing and supervision. The whole area must be tightened up. It is a consumer problem. The bacon industry has been expanding its business and is entitled to the fullest protection.
I was horrified that the results of investigations carried out at meat factories have not been published. That is lax on the part of the Department and, as its political head, the Minister should be in control of the operation. He has a huge staff including Departmental Secretaries and Assistant Secretaries in charge of different areas who should bring all these matters to his attention. I was disappointed to hear the system is being operated this way.
Is the Minister basing his BSE figures on what is happening in the UK? Are we now reaching a peak here or have we already reached it? It is suggested that the UK has reached a peak and that the worst if over. Are the Minister's figures based on that situation? Is it because of the imported nature of the business that he can say that?
What controls exist over the import of meat and meat products? I have sympathy with the Consumers' Association. When one buys meat in a retail store it can be branded Irish or anything else but no one knows its real origin. Foreign multiples can brand items as being of Irish origin but what protection is there for consumers here against imported products? Many countries that export meat products are not subject to the same rigorous testing that we are. Can the Minister investigate this and what right does his Department have to do so? Will the new food authority be able to examine and test imported samples?
What levels of compensation are available to BSE infected herds and under what heading is that compensation included? Is that having an adverse effect on the levels of compensation being paid to farmers who are in serious difficulty due to brucellosis and TB? Does the Minister see any reason for another Supplementary Estimate to increase funding in this area? Farmers tell me that TB, and especially brucellosis, are posing a crisis for the industry. I am aware of a number of infected herds where farmers are facing a substantial loss of income because they must depopulate their herds.
Subhead M1 relates to dairy hygiene and farm pollution. Deputy Crawford is new to the House and should know that when we have a coalition Government there is usually a problem in the area of farm grant aid. We saw it in 1983-87 and it is noticeable again now. It will have devastating consequences for many small and medium sized farmers. There are 30,000 dairy farmers with quotas of under 30,000 gallons of milk. Those farmers have no chance of surviving if they are not paid realistic dairy hygiene grants under the directive. The sooner the Minister realises that the better, if he is to demonstrate a commitment to smaller farmers.
The only way forward for small farmers is in dairy production and that sector is already in difficulty because of quota levels. Dairy hygiene is vital to deal with problems such as somatic cell count which costs a great deal of money. Large farmers can spend huge amounts of money to deal with it but smaller farmers have no hope of getting anywhere unless the grants are realistic. It is no good saying enough was not provided by the previous Minister. The record of my party in paying grant aid to farmers and supporting agriculture speaks for itself and nobody should try to tell me otherwise. There is always a stop go policy when coalition Governments take office. I do not blame the Minister's party as much as the other parties in Government, the middle left and the loony left.
I join previous speakers in wishing the Minister well. I have every confidence the Minister will guide us through this critical time for farmers. However, he has a difficult task. First, he must clean up the image of Irish farming. The abuses in all areas of farming are unacceptable. It is only fair to point out that 95 per cent of farmers are honest, hard working, decent people and they are being tarnished because of the activities of a small number, less than 5 per cent. That small number appears to be composed of large farmers, as we have seen from the figures for herds where illegal activities have taken place. These people, despite the fact that they are well off, want to get rich quickly. The Minister will have the support of the farming organisations and every farmer in dealing with such people. I congratulate the Minister's staff for the manner in which they identify and trace illegal activities.
Before talking about the BSE problem, I wish to mention milk quotas. In recent days I have heard of activities that are unfair to small milk producers of less than 15,000 gallons. One case involves a substantial milk quota where three brothers are supplying milk from one milk tank. The three have a milk quota despite the fact that two of them never had cows and are not involved in farming. That is unacceptable. I brought it to the attention of the Minister's officials and they said it was the concern of the relevant co-op. Like me, the Minister is a good Christian and believes in life after death. I am also aware of a case where a farmer is supposed to be supplying milk to a co-op despite the fact that the man went to his eternal reward more than ten years ago. The cheque is being cashed by a member of his family. The dead man has a milk quota in excess of 12,000 gallons even though there are small farmers in that co-op who are desperately looking for extra quota to maintain family income. These matters must be investigated and dealt with rigorously. It is not enough to say it is the responsibility of the co-op involved. It is the responsibility of the Department and I hope the Minister will investigate. Too many questions are being asked about milk quotas and why they are available to some and not to others. I want to see fair play in that sector.
I compliment the Minister on subhead A5. This appears to be the first step in establishing traceability through the installation of computers in slaughter plants and in the 46 marts and export assembly points. We will be able to trace a calf from the day it is born to its final destination, whether it is at the export port or in the slaughter house. If we can establish that system we will be able to convince our customers that all aspects of beef production are clear and above board.
With regard to the 47 cases of BSE, when we were abroad recently I quoted seven million as the figure for the national herd. I now realise the figure is more than eight million so the number of BSE cases is an even smaller percentage of the national herd. We hear a great deal about depopulation and out-breaks of BSE. If one is not involved in farming one might think BSE was a serious problem if not an epidemic. There is no epidemic. The Minister said that generally, only one animal in each of the 47 herds was identified and reported, after which the total herd was destroyed. The brains of the 927 other animals were examined and found clean. There is no major outbreak of BSE; there were isolated cases. Much has been made of the fact that the Department is slow in destroying the remaining herd. Those figures demonstrate there is no danger in that. However, the Minister must clarify one point. Is it a fact that when the animal is identified it is immediately slaughtered, the identity cards of the remaining animals are confiscated and the farmer cannot move or sell those cattle? Our customers will want to be reassured on that point. It should be highlighted that only a single animal in each herd was found to have BSE and that the other animals were free of the disease.
Bringing forward payment of grants due in 1997 for farmyard improvements and so forth is welcome. Many farmers who took on this work in good faith earlier this year understood they would not be paid until 1997 but hoped their incomes would be as good as last year's. They now find there is a scarcity of income and the payment of the grants this year will be most welcome. I compliment the Minister for doing that.
I support the Department's Estimates. The Minister is doing a good job and farmers have every confidence in him. However, all of us have a role to play in this matter. We should not be negative to score political points. I accept the Opposition must satisfy its supporters but there comes a time when the national good comes first. Agriculture is still the bedrock of our economy and we must be seen to do our job and do it openly. We all agree that we produce the best quality food in the world.
I wish to refer to a matter mentioned earlier, food safety. In excess of 95 per cent of our farmers are genuine, hard working individuals who have a firm commitment to their profession. Many families have been farming for centuries. However, it has become evident over the past year that there are some rogue farmers. What will the Minister and the Department do about them? There is a question over the independence of the Department to oversee and supervise the food sector in the interest of farmers, processors and, most importantly, consumers.
Farmers and processors need consumers if they are to stay in business and have a good livelihood. These consumers need to be confident that the regulatory body, which up to now has been the Department of Agriculture, is independent. Last week we heard of a report in the Department which, for unknown reasons, was not published and possibly would never have seen the light of day but for an independent report on the pork industry, published by the Consumers' Association. The effect of that has been a reported 20 per cent decline in pork sales last week alone. The Department employs food scientists, agricultural, veterinary and food hygiene inspectors. Surely it was incumbent on the Minister's officials to advise him on the contents of this report. It is in the interests of Irish agriculture that all reports commissioned by the Department should be published. What other reports which we have not been told about are in the vaults of the Department? It is important for everyone concerned that those reports be published immediately.
The sum of £84 million is a large amount of money. I have never seen so many people wanting to sabotage a successful industry. Certain people in the farming community have damaged it through spreading disease in stock. This has happened in a short time. There are rogues who are prepared to bring in infected herds to get compensation.
Every time a case of BSE is featured on the RTÉ nine o'clock news, a cow is shown staggering all over the place. Why do they have to use the same cow every time they discuss agriculture? It is a disgrace and it is time the Minister asked the Director General of RTÉ to stop this. It has a terrible influence on people, particularly young children who will not eat beef when they see the staggering cow. RTÉ have an obligation to the community and the country.
I listened to many radio programmes in relation to this debate in the Dáil. The general public had little sympathy for farmers and less sympathy for politicians and saw what was happening in relation to political point scoring. Nobody thought about the product we were trying to sell abroad. The IFA responded by expelling members of their organisation who will be prosecuted. It took a long time to get that message through to them.
Anyone who is prosecuted in relation to anything which affects the food chain, particularly those involved in using angel dust, usually substantial farmers, should be punished. Headage payments should not be made to these people for five to ten years. If someone is prosecuted for drink driving, they lose his licence. A publican loses his licence after so many prosecutions. Why should people damage our herds, our reputation and an industry we depend on so much and yet be rewarded by the State through headage payments? These people should not be in agriculture if they want to destroy the industry. I know farmers will not like me saying this, but if someone damages their industry, they should pay the penalty.
When this crisis arrived agriculture was going well. The Minister is very capable and worked hard in Europe on behalf of farmers, who were happy until this BSE crisis. It is no consolation to them that things were going well. I know the Minister will help them out of this crisis. The farmers have an obligation to this marvellous industry. It is time the cowboys were taken out and that they stopped damaging our fine reputation abroad.
We should put a gun to their heads.
Fianna Fáil would encourage that with a sly wink. We will not have that. The Minister will clean up this industry. A Fianna Fáil Minister would give the wink, but the wink will not work any more. We have a responsibility to the consumer.
There are many questions to the Minister. This is not a Second Stage debate and I ask Members to confine themselves to questions on the Estimates as we still have three sections to deal with.
There were a large number of questions. If I do not deal with some of them, I will be happy to come back to Deputies on an individual basis.
Deputy Cowen raised traceability and computerisation. I have done an intensive amount of work on the area of traceability since last June. I have not found anywhere in the world a blueprint for traceability and quality assurance which Ireland could use as a model. It is extremely difficult. It is one thing to put together a piece of paper which can trace the life history of an animal and every farm it was on. What does that demonstrate other than a list of names? What assurances can be given about meat and bonemeal, pesticides, animal welfare, feeding regimes and the type of grass fed herd? It is an extremely complex process which will involve the veterinary profession, farmers and a welter of bureaucracy. There is no handy panacea for this.
The animal location file will be in place by the end of the year. This will provide a linkage of information. About £1 million will have been spent this year on this. There will be discussions then with the Department of Finance vis-�-visthe Estimates for 1997 in relation to an even more comprehensive animal tracing system, beyond the ALF. Since last September, a female animal cannot be slaughtered unless a permit is obtained for a heifer or a cow. This is working well, despite foreboding that it would not.
As regards costs, an additional £6 million on top of the £6 million we have spent already is being contemplated. I am confident that the Department of Finance and the Department of Agriculture can reach a satisfactory outcome on that. An entire system of traceability, while helpful in relation to TB and brucellosis, would not overcome trade related Protocols and other problems. Quality assurance linked to the knowledge of where the animals were is a critical part of it. Nowhere in the world is there a compulsory national scheme for such quality assurance. It will involve costs for farmers and independent verification and there is a limit to the number of State inspectors that can be appointed. If the number of BSE cases increases in 1997, will this quality assurance and traceability system secure our trade? If the answer is no, what further steps must be taken? I am considering those questions at present.
As regards the decisions made in Luxembourg, one million calves will come out of the system. From 1 December the calf processing and early marketing premiums will be made available in each member state and farmers can choose one or the other. It is estimated that Britain will take out approximately 500,000 calves. The numbers will be minimal in Ireland and the rate of premium will decide the attractiveness of the option. The rate was £103 sterling, but that level will not attract many bull calves in Ireland.
It has been said we have avoided structural reform. The view has been expressed both inside and outside the Department that structural reforms are necessary to reduce the price of beef. The difficulty is that prices have fallen. Cow beef prices, for example, have already fallen by 20 per cent. There would not be full compensation for a further price cut. We could cut export refunds and intervention safety net prices, which would bring the price of beef down. It is artificially high as a result of the level of subsidies for milk and meat in Europe. It is not beyond the Commission or the Union to do this but that would reduce incomes even more.
Why?
Because we would not get full compensation.
Why?
Because it is not available from Brussels.
Is the Minister not able to get it?
That is not the case.
It is nonsense to say we cannot get full compensation.
If the Deputy is advocating a further cut in prices, farmers would need to be told because people believe ——
The Minister should tell the whole truth. My position is that prices should be reduced and full compensation paid to farmers. The Minister should not misrepresent me.
The Deputy is making valid assumptions about compensation, but I am close to the cutting edge of decision-making in that regard. The drop in prices has greatly improved the competitive position of beef. The 64p a pound refund is prevailing, although beef prices are 82p and 83p. This time last year the price of beef was 103p or 104p and the same 64p a pound refund applied. The cost of beef to importers in Egypt or Russia has decreased dramatically. European beef has never been more competitive. That is the difference between the price the raw material is bought at and the price after the subsidy is paid.
As regards the delay in payments, the value of the charter of rights has never been as great in a time of difficulty. The once-off change in the system, like the computerised land identification system, is leading to problems in every member state. It is obligatory to introduce it and there is a problem trying to reconcile what people have said is their map and the genuine map. We hope to deal with the vast majority of these cases by the end of this month and with the rest, except the most intractable ones, by Christmas. The charter of rights provides a yardstick in perpetuity for the Department in relation to opening hours, telephone services, rights of appeal and payments. I am determined it will be implemented, notwithstanding whatever vagaries exist from year to year.
As regards Deputy O'Malley's question, it is a substantial gross estimate of £84 million. I want to address the points he made about the pigmeat sector. I became aware of this issue in recent weeks and I expressed regret at the way it has been handled by the Department. The residue levels in pigmeat had dropped consistently in the 1990s to low single digit figures. However, suddenly in the first quarter of this year they shot up to 21 per cent. The latest figures for October are down to 3.9 per cent. Pigmeat prices increased when the beef sector was in crisis, people did not observe the withdrawal periods and rushed their pigs to slaughter. This should not have happened. The Department does not try to suppress anything because every year we give the Commission and the Consumers' Association of Ireland a copy of all residue testing. However, we gave it belatedly and we should have published it. From now on we will publish all such statistics quarterly. We have published a plethora of statistics this week in relation to pesticide residues and the full backlog of statistics will be in the system at the earliest possible date. I will also be happy to lay them before the Houses of the Oireachtas.
Last Friday agreement was reached between pig producers and pig processors that each consignment of pigs going to a meat factory will be sampled in addition to the statutory several thousand samples we take. There will be a more rigorous set of controls, carcases will be detained and condemned and we will prosecute those involved. We will take random cases and follow up suspect cases. Our statistics may be higher than the general ones because we will follow those who already have a track record of antibiotic abuses.
I hope I have answered the Deputy's questions.
Could the Minister give me the date on which he became aware of this problem?
I cannot remember the exact date. I heard it during a Cabinet meeting when the Minister for Health said a report was coming out about the high level of antibiotics in pork. This happened about two and a half weeks ago.
Was the Minister shocked to find this out from one of his colleagues rather than from his Department?
I am anxious that the public has access to whatever information I have.
So if the Minister does not know, the public will not know.
I am being upfront about this issue. I publicly expressed regret at the way this matter was handled. We have put new systems in place so it will not happen again.
We are taking so much time on this issue Members will not be able to ask any questions under the remaining subheads.
Was it not said that the IFA was aware of this matter six weeks ago?
My officials met representatives of the pig producers and pig processors to explain to them the gravity of the situation.
Deputy O'Malley mentioned the beef fines. Both the multiple tendering and the general fine are under legal appeal and we will strongly argue that they are excessive. As regards legal proceedings against a particular firm arising out of yields beyond 68 per cent which was evidenced in the beef tribunal, independent legal advice has been obtained on this matter. I am consulting my Government colleagues and I favour legal action as appropriate. Legal action has not been instituted yet nor has a decision been taken in that regard. Further consultations are taking place with independent senior counsel based on the prospects of success. Deputy O'Malley suggested where he thinks there is a viable case. If there is one, I am anxious to pursue it.
Is the Minister now statute barred because this relates to the late 1980s and early 1990s?
I do not have the file here and do not want to give uninformed answers on legal matters. My understanding on the basis of the legal advice is this would be urgent if litigation were taken. It is not debarred by the statute of limitations.
The Deputy asked about the time lag for depopulation. All cases are depopulated sooner or later. It is two weeks for some and two months for others. The case in Tipperary highlighted by the Deputy has been protracted because it is the subject of a Garda investigation. The only way I could avoid litigation and depopulate immediately is to pay a cheque of compensation upon which we cannot reach agreement with the farmer. A decision will be made shortly on compulsory depopulation under the Diseases of Animals Acts. As I stated in the Dáil, given that we have had 1,630 cases of animals from depopulated herds whose brains we examined and found that none had BSE, a constitutional case could be taken that I had no right to compulsorily slaughter healthy animals. From the moment any cattle show symptoms of BSE, we take the cards of the herd. It is then totally restricted. This proves BSE is not contagious because the 1,630 heads examined have all tested negative. I am not happy with the delay in the case cited but neither do I feel we should be held to ransom. However, a decision cannot be avoided forever.
A point was raised about the Committee of Public Accounts meeting on 16 April. I will have to communicate with the Deputy. I do not have the information about what disciplinary action has been taken against officers of the Department. I am of the view that impropriety, where proven in the tribunal, should be disciplined. I share the Deputy's concern about that and will ask the Secretary to report to me on that as soon as possible.
Deputy Crawford and Deputy O'Keeffe made the point about the CFP running out of money. Deputy O'Keeffe is wrong. All the schemes were suspended in 1992 when money ran out under the previous tranche of structural funds from 1989 to 1993. The demand for CFP is very great because no scheme was available. Unlike REPS or similar measures, these investment schemes are financed by structural funds. As former Ministers will know, the agriculture allocation comes in a five-year tranche and is not open to renegotiation. It is allocated to each of the Objective 1 countries and, unless there is a mid-term review due to an underspend, they are signed and sealed. If the money runs out, I have to suspend the schemes.
Is there no State funding for these schemes?
There would not be State funding on the scale required for 100 per cent funding.
That says a lot about the Minister's priorities.
I am examining the dairy hygiene scheme to see if structural funds can be moved laterally and a modified scheme introduced, but I cannot make any commitment.
Why did the Minister not do that before he terminated the scheme?
I could make no commitment. I had run out of money.
The Minister knew he was running out of money.
I may not be in a position to reintroduce the scheme in future. I will examine any savings under the other structural programmes.
How much was provided for four years and how much has already been spent?
My predecessor provided £2.4 million for 1995 which I had raised to £22.7 million.
£2.4 million?
£2.4 million. We have had that increased. We have brought forward money allocated for 1999.
The previous Minister did not know what he was doing and did not make adequate provision.
I had to alter the tranching arrangements he made for the annual expenditure because of the demand.
The Minister suggested suspending the scheme in his press releases. That is my problem.
An EU directive on feed ingredients is already in place, but it is not explicit enough on meat and bonemeal. From 1 January 1997, a label must be attached saying the feed contains meat and bonemeal and it is illegal to feed it to ruminants. There will not be a scintilla of doubt for farmers.
What about the other ingredients?
They are displayed. There is an EU directive on that.
They can cause flavours in meat.
They are under different category headings but there is an EU directive on that in force.
The illegal activities referred to by Deputies Boylan and Ring have cast a slur on the agriculture industry. The vast majority of Irish farmers are honourable, decent people. I have been shocked by abuses of illegal substances and taken aback by the meat and bone meal situation. It is in the best interests of every farmer that these rogues are put out of business. We have already disqualified a number of farmers with convictions from EU premia from 1 July and it is my policy to effectively debar them from farming. They will be ineligible for further payments. I make no apology for that.
Deputy Boylan stated there are 9,000 inactive milk producers in Ireland. I have introduced a ten per cent clawback on sales and leases as a first step in moving money from inactive producers to active ones and moving milk into the temporary leasing scheme. I will be open to further suggestions on that.
A number of Deputies raised the issue of food safety. One Opposition party has produced proposals to radically restructure the Department. I am only passing through the Department and will not be in charge of policy forever. I have examined the issue of taking responsibility for elements of food safety out of the Department, through the Strategic Management Initiative and other means. There are 470 vets and technical inspectors and 770 administrative officers who do work similar to the work of a food safety inspectorate. They also do work on TB, brucellosis and Newcastle's disease. Environmental health officers and community medical officers could work on food safety on Monday and other health work on Friday. It is very difficult to segregate these functions in any rational or cost effective way. Implicit in any such decision is that anything to do with animal health must transfer from the Department of Agriculture, Food and Forestry. A vet does different jobs as does our inspectorate. It will take three years to set up the food safety board so it can use its binding recommendation powers.
Installation schemes are being examined by the independent evaluation unit set up as part of the structural funds package. This unit answers to the monitoring committee which represents the Irish Government, the Department of Agriculture, Food and Forestry, the Department of Finance and the European Commission. The unit's purpose is to establish the effectiveness of structural funds expenditure. The installation aid scheme is being evaluated in the work programme of the unit. The report is expected to be completed before the end of the year.
Intervention stocks are 60,000 tonnes this year. Our best estimate for next year is in excess of 140,000 tonnes. The extra money being provided by the on-farm investment schemes are matured liabilities which are now being paid and consist of £17 million in the CFP and £2 million in the FIP.
It is best to leave it at that Chairman and I apologise if I have missed out on any questions.
It is not surprising that there were so many questions given the deep interest of our colleagues in this subject.
One question was not answered by the Minister. What other reports are in his Department which should be made public for the benefit of consumers?
Some 6,000 people work under my aegis. I do not look at everyone's desk, but I have given an instruction that every report vis-�-vis residues, public health and food safety is to be published forthwith. If they cannot be produced in a glossy embossed format, they are to be published anyway so as to have them laid before the Houses of the Oireachtas. There is to be publication of all possible information without delay.
There will be no more glossy brochures.
They still intend to produce the glossy reports.
I do not think we can be more specific than that. The Minister has been fair.
I asked a question about imported meats.
Imported meats and retail sales are not under the control of my Department. One of the things that was misleading about the pigmeat issue is that my Department has absolutely no function. We are involved at the point of slaughter and cutting. The Minister for Health would be in a better position to answer that question.
A point was raised about the Abattoirs Act. I am extremely concerned and I want to put this on record now in case someone accuses me of not knowing when I should have known and so on. The situation with the Abattoirs Act is unacceptable. The questions of antibiotic residues and the meat inspection service relate to departmental work, but there is a dual standard. Some meat is slaughtered under the Abattoirs Act and some is slaughtered under export regulations.
This is being run by local authorities but the problem is that a standard charge would not recover the full cost to local authorities. Some nine local authorities have no veterinary service. I am immediately bringing together officials from the Department of the Environment, the Department of Agriculture, Food and Forestry and the Department of Finance. I will communicate with every local authority and get a senior veterinary officer from each DVO to visit them. We have a system of TVIs and so on that we hire.
As soon as possible every animal slaughtered for domestic consumption will have the same veterinary presence as that slaughtered for export. I am not promising a date by which that will be done but the situation is highly unsatisfactory. The Government has earmarked extra resources of the order of £2 million for this purpose. It is not provided in this Estimate because some of it may fall into next year. We will get the practical arrangements in place. This has not been my responsibility to date but the Government has asked me to get to grips with it immediately.
Does the Minister envisage amending the Abattoirs Act or rolling that Act into the existing Act under which the licensed curers are operating? Could he simplify the system through legislation?
My objective is to introduce uniformity, but I have not looked at the question of primary legislation yet. I am trying to get a short-term coverage of veterinary presence in place. Some local authorities have a full time veterinary service, some have a part-time service and others have none. Some abattoirs have very slow slaughtering throughput and it would not be practicable to have someone standing there the whole time. There are different requirements for temporary vets and so on. A more fundamental review in the context of the long term would include the review of primary legislation, but I am anxious to deal with the emergency aspects first.
I have given everyone a fair crack of the whip at the expense of cutting down substantially on the time remaining because it was a very interesting debate. The Minister has made a fair attempt to answer all the questions. We will now move to the subheads A2 to J3. Instead of going through them one after another, because of the time constraints and the fact that I gave additional time to the contributions by members, I ask members to simply ask questions on any one of the subheads A2 to J3. We will move on to the next section when we complete that.
There is easily a saving in subhead C2 on bovine TB eradication schemes. I know the Minister has introduced a scheme for aid to small dry stock producers, but dairy producers have not been included and some very small dairy farmers are suffering severely because they have no milk cheques during the winter and they have no other income since they cannot sell any stock. There seems to be a surplus there. Could that element of hardship be looked at and the scheme widened?
Could the Minister and the Department learn from County Mayo? We could bring Department officials or maybe the IFA and other people to Mayo as it is the only county which has not had a case of BSE. Is there any way officials could be brought there to teach them what they have done right and what the rest of the country has done wrong?
There is dissatisfaction with the brucellosis and TB schemes in my constituency of east Cork, where there is a high incidence of brucellosis. There is concern about the compensation levels. Could the Minister address that problem? I take it that he has some specific information available to him in that area.
I completely reorganised the TB scheme. In relation to Deputy Crawford's question, the farmer now pays for the test. The levies have been drastically reduced and we have a system whereby every pound paid in levies is refunded to farmers in compensation. They do not pay for administration or anything else. Farmers have put up £10 million in levies. The Department is matching that with £10 million. There is no spare money. There is a total of £20 million which is only enough to cover the hardship element. I take the point the Deputy is making and I will keep it under ongoing review. If the number of reactors goes down, there will be more leeway because the £20 million will still be there will be fewer reactors and fewer hardship payments. That is the only context in which that could be considered.
In relation to County Mayo, my own view is that the feeding of meat and bonemeal has a direct relationship with the problems. That is my own experience in Wexford. There must not be much meat and bonemeal fed to cattle in Mayo. In regard to Deputy O'Keeffe's point, we have new epidemiological controls in four pilot areas. They have been picked for intensive work like that which took place in east Offaly. We are trying to tackle wildlife and so on but the situation in relation to brucellosis is of concern to me, particularly in Munster. The incidence seems to be rising in particular areas.
There is a huge outspread of brucellosis in north Cork. People are dissatisfied with the level of compensation because they have to depopulate. We are talking about a pilot survey which is dealing with a virus. TB is a virus and I am talking about a bacteriological problem.
I am not in a position to make promises about the level of compensation but brucellosis and the nature of the spread of the infection is such that depopulation is obligatory. We have the TB and brucellosis forum in place and it gives the farming organisations and others the chance to put forward their views on how the disease should be clinically addressed. The increase in the incidence of brucellosis is of concern to me but I do not think the compensation levels will have a bearing on eradicating brucellosis. The point I made earlier about the £20 million ceiling still pertains for compensation.
Is the Minister instituting a survey to identify what brought it back, because we were almost 100 per cent incidence free? There is definitely a problem.
There are reports but I do not have them to hand.
The Minister referred to the cost of the temporary scheme for assisting the rendering industry, the importance of which was highlighted when this problem arose in May. There are different types of meat and bone-meal with which there is no problem in terms of feed for the poultry and pig industries. A blanket ban would do a disservice to the industry and would not be the right course of action. The Minister has stated his intention to introduce proper labelling to distinguish different types of meat and bonemeal and what is appropriate feed in different circumstances. A ban would not serve the industry well and would create more problems in respect of the rendering industry. The Minister would then have to devise an assistance scheme which would not be temporary in nature. How has the industry fared since the May 21 deadline for payment under the scheme? What has brought it back into balance?
The basis of the scheme was that we paid a subsidy to renderers to enable them to continue in operation after Easter week and to tide them over a three week period while the industry worked out a new devaluation of the fifth quarter. The deal was that if they subsequently sold those stocks they would reimburse the Department — so they could not make on the double. The market for meat and bone meal collapsed in April. The Department is getting money back as they sell those stocks which is why the figure has been reduced from £2.5 million.
This is controversial but I agree with the Deputy there is no scientific evidence that feeding meat and bonemeal to non ruminants — pigs and poultry — in any way transmits a disease not in those species. Every country in Europe, with the exception of the UK, does that and we export a certain amount. A total ban on meat and bonemeal would lead to a situation where it would have to be destroyed, which may ultimately be the case with certain offals anyway.
A mountain of meat and bonemeal is being stored in Britain because it does not have a land fill, sea fill or incineration solution on this yet. I am anxious for the Government to address the question of a national incinerator or some other way of destroying this product. If meat and bonemeal were unsaleable to any species the volumes involved would be horrific — in excess of 35,000 tonnes a year. It is a filthy product. It is all right if it is stored at a cold temperature but if it is put into a hole in the ground it melts into a gooey, gluey, stinking, rotten mess. It would be a huge environmental problem.
At the end of the day we will be led by the scientists. If my veterinary officers or the EU scientific veterinary committee say it must not be fed to certain species we will abide by that, but they are not saying that at the moment.
We are all aware there was a breakdown in the way it was processed, which is how the tragedy arose. Is it now being manufactured to the highest standards of pasteurisation? Is it now safe and is there an inspectorate to check it? If that is not the case it is not safe to feed it to pigs or poultry. It is a good feed which is a high protein source but can the Department assure us it is being properly processed?
There are between eight and ten rendering plants in the country. The difficulty is that there is a new EU directive in gestation which states the heat treatment for the manufacture of meat and bonemeal should reach 135 degrees which our plants cannot do. We are examining the provision of grant assistance to bring them up to that standard in 1997 and I am anxious we do that as soon as possible. The majority of rendering facilities in Europe are not up to that standard but some are. What was the second part of the Deputy's question?
Can the Minister guarantee the quality and safety of the meal because it is an important part of the diet of ruminants?
We have put licensing arrangements in place. A task force worked in regard to illegal substances over successive Governments and a task force has been put in place to deal with this matter.
Deputy O'Malley asked about the number of cases there will be this year. I have great difficulty answering that because if I said there will be "X" number of cases I would be accused of hyping the disease. There are 47 at the moment. I get a weekly print out from Abbotstown, usually on a Friday, of the number of animals under suspicion in the field and heads under analysis. There are about 17 animals under suspicion at the moment but fewer than half are positive. Next week there could be 20 suspect cases. They come through on a conveyor belt. This week four animals are due for reading, they could be all negative or all positive. The good news is that none of the suspects is from Wexford, which is some light relief, after the last three weeks.
The Minister is in the clear.
Only for three weeks. We have been averaging three cases a week. However, I want to correct Deputy O'Malley on one point. The number of cases announced since the Russian deal would not have been known at the time of that deal. We get the information on a weekly basis. There is no question that I knew there would be extra cases.
Let us not revisit that sticky ground.
I asked what is the period between the Department becoming aware of a case and its announcement as a statistic.
There is not a set pattern for that but I am anxious to establish one. They are usually announced within a matter of days. It could be the case that results came in on a Thursday, that a journalist asked about it on the Friday and was told the answer, or that no one might ask until the following week. However, we immediately notify the Commission when the figures become available. I would rather establish a weekly routine.
I do not want to type the disease but the difficulty is that the Department and I are accused of hyping it every time we announce a case. People spoke about the staggering cow shown on RTÉ— I have no control of the media coverage of cases. There might be 300 cases in a week in Britain but they would not appear on any BBC or ITN news bulletin. We are giving exaggerated coverage to the small number of cases in relation to a herd of 7.2 million animals. Fair is fair. Otherwise, I am accused of concealing them. There is an element of news management involved in this but I am not trying to hype it. I would like a weekly routine which is anticipated, but weekly announcements are made at present.
We will now move to subheads L.1 to L. 5. They relate to the operation of schemes and the implementation of EU guarantee regulations and directives.
The Minister told me that he proposed to look at the question of instituting proceedings to recover some or all of the sums lost by way of the fines which we must now pay and which are being provided for in this Supplementary Estimate. Does he agree it is very unsatisfactory that the Department, even before he became Minister, did nothing to recover these figures and that the only proceedings taken were in Rathkeale, in respect of a small amount of money? This is not merely a misfortune from which nobody benefited. There were beneficiaries to the tune of scores of millions of pounds. Why should those who benefited from malpractices and breaches of regulations be allowed to keep all this money while the taxpayer must pay for the malpractices and breaches of regulation?
Even if the Minister lost the cases, would it not have been better to be seen to try to recover the money because, morally, the State and the taxpayers are entitled to reimbursement? Can he advise how the one small case at Rathkeale is progressing, where there have been proceedings for £1.8 million? Is it completed and has the sum involved been recovered?
The Minister mentioned that products from the milk sector go to intervention. Is this a growing problem? There are stockpiles in New Zealand. What are the Minister's views on this? Does he see greater costs to his Department because of market weakening in the intervention area? What measures is he putting in place to help? Dairy farmers cannot take a further downturn in their income.
The litigation to which I referred was not to recover the fines but to recover the yields in excess of 68 per cent. The case involving £1.8 million, to which Deputy O'Malley referred, is still going through due process. The Deputy is free to put down a Parliamentary Question on the matter. I will advise him of developments on an ongoing basis.
I have a very close relationship with EU Commissioner Fischler. I have negotiated matters from sheep to DSP to BSE with him. I have never found anything as difficult — not to mention the fact that the officials at a non political level, would not engage in dialogue with the Commission — as the negotiation of the beef clients. While the litigation was in respect of £22 million, or whatever, and Commissioner Flynn was involved, it was not a good experience for Ireland and it did not do the Department, the industry or Ireland any good. We must put it behind us. We have put in place a number of new controls, for example, deboning must take place at a separate place from slaughter,
The whole scene has changed. It was presumed intervention would not operate again, but we did not foresee the BSE crisis. I hope some good has emerged and there will be a successful outcome to the appeal.
There has been a huge downturn in the milk sector. The skimmed milk powder limit of 109,000 tonnes in intervention has been breached. It is now nearly 130,000 tonnes. Some 30,000 tonnes of butter has been taken into intervention. All of this would indicate a weakness of price. Unfortunately, competitive pressures among processors to hold their quota or get new suppliers is such that the prevailing milk price is not one that Bord Báinne will justify to the co-operatives. If milk prices are to move it will be in a negative direction so there will be more political capital.
The market has deteriorated. There is no doubt that both America and the southern hemisphere have increased production. This means the review of the dairy sector, including the future of quotas — the Deputy will be aware of a major consultant's report to the effect that quotas should eventually go — is now up for serious debate. I would welcome a submission from the Opposition or anybody else who would have a constructive input on this.
The price rises emerging in the milk industry because of stockpiling in the southern hemisphere is threatening New Zealand, Australia and America. There will be a crisis at some stage given what is happening, especially in New Zealand.
My experience of the New Zealanders is that they, more than anybody else, like to manage the market. They would not dump product on the market because they would dump their own prices as they get no export refunds or premia supports. It would not be in their own interests to do this.
I am advised that, on prevailing market circumstances, the maximum prices would fall would be 6p per gallon, which would still leave milk as the most profitable form of Irish agriculture, bar sugar beet. I do not want to create widespread panic about a collapse in milk prices, but there may be some easing of prices based on current returns. We have got the export refunds back up to their previous level and we have ensured that the Commission has not applied the volume limit that could have been applied.
Some farmers are over dependent on skimmed milk and butter. The Minister mentioned capping levels on intervention. This will make Ireland very vulnerable. What contingency has the Minister planned for today, rather than when the crisis arises?
Much of this is within the competence of the Commission.
What about the competence of the Minister's Department?
That is the way it works. We have had our way both on the export refund level and with the Commission which did not exercise the option to stop taking in SNP — that is an annual limit. We will start again with it in 1997. There is plenty of capacity for intervention for dairy products. Stocks were much higher in the 1980s.
We now move to the final session, subheads M1 to N, dealing with schemes operated in the implementation of EU structural regulations and directives, pages two and three of the Estimates document which has been circulated. Are there any questions?
It is disappointing to note that the expenditure on Leader II is not as anticipated, because of this over bureaucratic approach that has meant management at the central level is more pronounced than was the case under Leader I. I have always found it amazing that the Comptroller and Auditor General had much to say about one or two specific Leader groups who had problems of accountability while the others were a major success, yet those one or two examples are used by the forces at the centre to regain control of the scheme, which is supposed to be a bottom up approach in most rural communities. I have already decried the acquiescence of the political head of the Department to allow that to happen. As we predicted, it has meant that there was not the same take up of Leader money under this scheme than was the case heretofore under Leader I. This should be looked at immediately with a view to easing the criteria for Leader II moneys. It is a more centrally managed scheme than Leader I and for that reason alone it will not be as successful.
The grants for institutional research and development are not what one would have anticipated. This is a great disappointment. Is the area covered by subhead 11, the take up for grants food sub-programme and the operational programme for industrial development, 1994-99, not being addressed sufficiently? Shortly after the Government took office the Minister or the IDA decided there would not be any more grant aid for beef processing factories and so on, despite the knowledge that major reinvestment will be required on a continuous basis to improve efficiency and state of the art technology and modern practice in these industries. It is a major short term mistake which will have long-term consequences and I exhort the Minister to change the directive which must have emanated from his Department. Many opportunities for major capital investment will not go ahead because somebody has decided that the food industry will continue to pay the price of the beef tribunal mania which is ongoing despite the fact that a report was published. Unfortunately, some people are still reinterpreting it, particularly some self appointed elements of the media who have decided that their version of the beef tribunal report is what the public shall consume irrespective of what the Chief Justice, Mr. Hamilton said about it.
It is most unfortunate that the type of reinvestment which should be ongoing in that industry is not happening. Will the Minister comment on the lack of uptake of grants in these critical areas in terms of the restoration of the preeminence of Irish food internationally? The underdevelopment of institutional research and development, the lack of improvements to our factory infrastructure and the point that our marketing and processing are not as they should be are all indications of a lack of confidence in the industry which must be addressed. What steps will the Minister take to address those issues?
Subhead M2 covers the installation aid scheme. Payments to many young farmers are held up by bureaucracy in the operation of this scheme. For example, if an owner hands over his farm but not the house to his son, there are major delays in the Land Registry before the full deed is available. Can the Department not accept the daily number or follow the structures of other schemes, such as the early retirement scheme? This matter is putting pressure on young farmers in this difficult year when they need the money, although I appreciate £2 million has been added to the scheme to speed up the applications which are getting through.
Producer groups are also covered by this subhead. The Department should promote this more widely than in the past in terms of quality assurance. The drawdown of European funds would encourage organised producer groups to come together and provide quality cattle or sheep. The scheme has existed for some time at European level but it has not received sufficient encouragement. Perhaps a time of crisis is the appropriate time to introduce it.
There appear to be savings in terms of staff. However, there are staff problems in the Monaghan office because there are not enough permanent AOs or veterinarians to deal with the difficult situation there. Bringing in temporary personnel on a month to month basis to deal with the serious problems is not good enough. This also applies in another office in Cavan, which has a deficit of permanent staff, to deal with farm development. This matter must be examined. I understand extra AOs are being recruited but, in the context of the overall budget, it is important that permanent staff, who understand the farming structures in the area, which are different from other places because they involve intensive production, and can deal with the problems in an organised and compassionate manner, are appointed.
We are over time and I advise Members that the Minister must leave soon because he must attend a function. I ask Members for brevity so that the Minister will have an opportunity to reply.
I wish to express my regret that subheads M9, M10 and M11 show significant savings as a percentage of the amount. Deputy Crawford boasted earlier when I referred to the fact that there were 20 subheads. However, he does not realise that half of them are reductions. Some of the more useful subheads have been reduced but, unfortunately, useless matters such as fines are increased. It would be regrettable if schemes such as Leader, which was successful locally, declined. Subheads M10 and M11 relate to marketing and processing of food and institutional research and development in food. These areas are the key to the future and if companies are not prepared to take up those schemes, where is the future?
The future lies in high quality food with added value and this is where farmers' interest also lie but not just in terms of short term handouts for animals from year to year. It is regrettable that so much money is being saved under these subheads because people are not taking up the schemes. It will be a poor future if this is the position.
I raised the issue of intervention earlier but this problem would be solved if there was greater investment and leadership by the Department. A major problem next year with a growth in the pig industry will be extra slaughter facilities. Two slaughter facilities in the north east no longer exist but no provision has been made in that regard although approximately 30 per cent of the pig industry is in that area.
The dairy industry experiences peaks and valleys. A peak has been reached and there is extra pressure on processors because they are dealing with intervention type products. I do not understand the dairy industry and I wonder who failed to provide leadership in that area. When I travel abroad, I see fresh produce on shelves in UK multiple stores from Denmark and other major dairy countries. It is said that this country cannot manufacture fresh produce, which gives the best return for dairy farmers, because of Ireland's distance from the marketplace. Leadership should be given in this area. We should have removed ourselves long ago from the overemphasis on the intervention market on which we are so dependent. The Minister should encourage further grant aid in the fresh dairy products area. If a problem exists, I want to know what it involves.
I mentioned importers of meat products. One rogue meat importer could do more damage to the Irish meat industry than any Irish rogue because it could be picked up in a retail shop, tested by an independent consumers' organisation and found to contain certain elements. However, the product would be branded as Irish. What protection exists for farmers and processors in such situations?
The figures in subheads M9, M10 and M11 are somewhat misleading. They give the impression that there are savings in this area. However, in relation to cash flow and subhead M9, Leader II went nationwide to include 36 groups rather than 16. Some of them were for outstanding starts but all the £77 million relates to between now and 1999. The money has been allocated and will be given to them. They are not losing the money but they have not been able to get their operational plans in place quickly enough. It is a logistical cash flow and no money will be lost.
Subheads M10 and M11 relate to Structural Funds areas. They are included in the tranche to 1999 and although there has been a slow uptake initially, the money will not be lost. It will not go to another area. Somebody said earlier that subhead M10 relates to a cut in the food safety area and reference was made to beef processing with regard to subhead M11. Subhead M10 is for non commissioned research and 41 projects have been approved, which we believe will take up all the money. Some are one to three year projects and the claim payments have not yet come in, but they will and all the money will be spent.
As regards subhead M11, Deputy Cowen raised the question of beef processing. There is substantial overcapacity which one could put it down to live exports in one year. To give grants to increase capacity would be against Forbairt's best advice. Although we are giving grants to the rendering industry to bring it up to the meat treatment standards, I have asked Forbairt to review and to look at new initiatives in the area of marketing and processing to see if more grants could be given.
There is a ban on imports from the UK. At the time of the BSE scare on 20 March, Members will recall there was confusion in supermarkets about what could and could not be sold. The Minister of State at the Department of Enterprise and Employment, who is responsible for consumer affairs, chaired a committee. The Department of Enterprise and Employment, the Department of Health and the Director of Consumer Affairs carry out localised controls in supermarkets and my Department does not have a role at retail level.
I know that for the ERS a dealing number from the Land Registry Office will do, but it will not do for installation aid. There is little money in producer groups and I am told that only one beef producer group will probably get all the money because so little is provided. We await developments in regard to Structural Funds. It is an indictment of the beef industry that we do not have one beef producer group operational in this country although we had a few sheep producer groups. There is a lot of red tape attached to Commission rules and it is not anyone's fault. As regards the dairy sector, I frequently launch dairy desserts, yoghurt products, etc., for the fresh market. I understand we have some of the world leaders in this regard, including Dairygold, Waterford Foods and Avonmore and Connacht Gold.
Report of Select Committee.
I thank Members, including the spokespersons from the two Opposition parties, for a constructive, interesting and informative debate on our most important national industry. I thank the Minister and his officials for providing background information, I also thank the staff. I propose the following draft report:
The Select Committee has considered the Supplementary Estimate for public services for the year ending 31 December 1996 in respect of Vote 31 — Agriculture, Food and Forestry. The Supplementary Estimate is hereby reported to the Dáil.
Is the motion agreed? Agreed.
Ordered to report to the Dáil accordingly.
Were we voting for or against the Estimate?
No, we are reporting it to the House which is what we are obliged to do under Standing Orders.
I wanted to dissent from subhead L2, if I got the opportunity.
The Select Committee adjourned at 4.25 p.m.