Substantial financial aid will be available to farmers on whom the nitrates directive has an impact. In Sustaining Progress, the Government stated that recognising the importance of the nitrates directive and its impact on certain farmers, a number of initiatives shall be taken in the context of optimising the use of available EU and national budgetary resources. These initiatives included a review of REPS with higher payment rates and changes to the terms and conditions of the farm waste management scheme and the dairy hygiene scheme with an increase of the income and eligible investment ceilings. Proposals for REPS, including an average 28% increase in payments, are now with the European Commission for approval.
Earlier this year, I secured approval from the EU to proceed with substantial improvements to both the farm waste management and the dairy hygiene schemes with effect from January 2004. The new schemes incorporate a number of major changes. The ceiling for eligibility under the schemes has been raised from 200 to 450 income units. This change will mean that the vast majority of Irish farmers will now be able to avail of grant aid. The investment ceilings have also been raised from €50,790 to €75,000 in the case of farm waste management works and from €31,743 to €50,000 in the case of dairy hygiene works. Furthermore, a standardised grant rate of 40% will now apply for most investments which is twice what would have been available to many farmers previously. In addition, increases have already been applied to the standard costs used to calculate grant aid.
Section 21 of the Finance Bill 2004 extends the special scheme of capital allowances for expenditure incurred on the construction of facilities to control farm pollution to 31 December 2006, subject to the enactment of the necessary legislation in the Finance Act 2004. The scheme allows total expenditure on or after 6 April 2000 on necessary measures for farm pollution control to be written off as a tax allowance over seven years. This allowance is subject to a maximum write-off in any one year of the lesser of 50 % of the expenditure or €31,743.