Thursday, 12 July 2012

Questions (209)

Bernard J. Durkan

Question:

212 Deputy Bernard J. Durkan asked the Minister for Agriculture, Food and the Marine if he has had any discussions with the banking sector in respect of finance and the local authorities in respect of development arising from animal welfare legislation coming into force in January 2013 which imposes extra costs on producers; if he has been in a position to obtain agreement to the effect that adequate funding will be made available from the lending sectors to meet such requirements and that the building extensions requirements remain reasonable in terms of timescale and levy impositions in difficult economic times when the national economy has become more dependent on the agricultural sector; and if he will make a statement on the matter. [34292/12]

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Written answers (Question to Minister for Agriculture, Food and the Marine)

The pig sector remains the third largest individual component of the agri-food sector, with production, prices and exports all growing significantly during 2011. This growth has continued during 2012 with prices for example, over 6% ahead year-on-year. The industry faces a number of challenges in the short and medium term and my Department will continue to assist the sector to resolve these issues.

New EU Animal Welfare rules set down new standards in relation to the housing of sows and these are due to come into force on 1st January 2013. A significant number of producers have undertaken the necessary work required in order to upgrade their facilities in order to comply with the new rules. In March 2012, Teagasc estimated that approximately 36% of pig units, housing some 44% of the sow population are presently compliant with the provisions. I have been clear in my view that a fully compliant pig sector is an essential regulatory and competitive requirement with effect from 1st January 2013.

My Department is in regular contact with banking representatives and has highlighted the particular needs of the pig sector, both for investment finance, in order to meet the new sow housing requirements, and for working capital. One of the main banks has recently launched a €250 million agri investment programme and I am hopeful of similar initiatives from other lenders in the near future. It is of course important that those seeking credit present a suitable business case with detailed cash flow projections. In this context the Department also facilitated contacts between Teagasc and the Banking sector to encourage seminars and training in relation to credit application. Any farming enterprises that feel they have not been treated fairly in relation to access to credit also have recourse to the Credit Review Office, who will review their case.

In relation to planning it is a matter for each local authority to consider applications for sow housing developments on a case by case basis. I understand that planning authorities are processing such applications and are aware of the 1st January, 2013 deadline.

Finally, I have recently announced a number of enhancements to the Sow Welfare Scheme which will assist farmers in completing necessary investment works, and in negotiating investment finance with banks. The investment ceiling has been increased to €500,000 per pig producer for the first sow house. In addition, an investment ceiling of €300,000 will now be available for each of the next three houses. The maximum grant rate of 40% of investment remains unchanged. I have provided a total of €13 million for this scheme with €4 million already committed and I welcome applications from pig producers for this funding. The closing date for applications is 31st October 2012.