Dáil Éireann Debate, Thursday - 4 May 2017
9. Deputy Bobby Aylward asked the Minister for Agriculture, Food and the Marine if he will consider increasing the level of direct support for the suckler cow herd to €200 per cow; and if he will make a statement on the matter. [21065/17]
View answerI ask the Minister for Agriculture; Food and the Marine if he will consider increasing the level of direct support for the suckler cow herd to €200 per cow; and if he will make a statement on the matter. I have spoken to the Minister on several occasions on this. I reckon money will be left over from Pillar 2 that will not be spent on other schemes so, if there is a surplus, will the Minister consider €300 per cow up to the first 30 cows, in line with our policy of at least €200 per cow up to the same limit?
Ireland has supported the greater market orientation of the CAP over recent reforms, including by the decoupling of payments from production, because farmers' freedom to respond to the demands of the market is vital for the long-term development of the sector, as set out in Food Wise 2025.
This approach to the reform of the CAP was recognised as being the most suitable approach to take, on the basis that the best interests of farmers were served by allowing them the flexibility to calibrate production to market demand without compromising income from the basic payment scheme.
Any provision of coupled support for suckler farmers under Pillar 1 would require a redistribution of direct payments between farmers and this would involve a linear cut across payment to all BPS beneficiaries. It would also require beneficiaries to maintain animals in order to obtain the premium, even in circumstances where supply and demand factors were exerting downward pressure on prices. There is also some evidence to suggest that the necessity to keep animals to obtain a premium had a negative impact on quality, with the focus turning to farming the premium.
These are issues that were well rehearsed in the run-up to the last and previous CAP reforms, and while there are counter arguments, on balance the judgment was that payments should be decoupled from production.
In relation to funding under Pillar 2 of the CAP, the beef data and genomics programme, BDGP, is the current main support for the suckler sector and provides farmers with some €300 million of funding over the next six years. I will continue to support this programme through the lifetime of the current rural development programme, RDP. However, any increase in the payment under the BDGP would require approval from the European Commission. This would be extremely difficult in the context of an innovative scheme which has undergone an approval process relatively recently. Even if it were possible to obtain such approval, it would be necessary to require farmers to undertake additional actions to justify any additional payment, and it would make the scheme more complex and compliance more difficult.
On 13 April, I announced that the beef data and genomics programme will be reopened to beef suckler farmers who are not already part of the scheme. This scheme, BDGP II, will also provide for six years of payments to farmers for completion of actions which deliver accelerated genetic improvement in the Irish national herd and improvement of its environmental sustainability.
Additional information not given on the floor of the House
Payment rates and actions for participants in BDGP II will be the same as those in the original scheme, with the exception that the training and carbon navigator actions must be completed by 31 October 2017.
I am delighted to say that provision has been made for new entrants to suckler farming in the scheme and it is these farmers who will drive the future of the national herd. Suckler farmers also receive support from a variety of other supports under the RDP, notably GLAS, ANCs and knowledge transfer groups.
The administrative burden and low returns of the Government's new €52 million beef data and genomics programme are undermining this vital industry as the scheme is running at 30% behind its participation target, due a lot of issues with red tape. The original target was 35,000 but fewer than 24,500 have signed up. Does the Minister agree that the 35,000 farmers' enrolment target is not attainable and an underspend is going to happen? This is the money which I reckon will be left over.
The beef industry is the cornerstone of Irish agriculture. It employs more people than any other sector and is worth over €2 billion a year. Ireland's best asset for beef production is our 1.1 million beef cow herd, kept on approximately 75,000 farms. The genomics money is not going to be used as it is not reaching its target.
The Minister is going to open it again; it is still not reaching it. I gave the figures, showing that it is behind. I believe money will be left over. We want to use up all this money and we want to keep this vital industry alive. The only way we can keep it alive is by direct payments. The average beef suckler herd would be 22. If the Minister looked at providing €200 for the first 30 cows with the money that is left over, it would go a long way to help the beef farmer and keep the beef industry alive.
I call Deputy Eugene Murphy on the same matter.
I thank you, a Cheann Comhairle, for giving me the opportunity to support my colleague, Deputy Aylward.
Virtually every week I meet suckler farmers who tell me they will not be able to keep going. Veterinary costs have risen considerably, and red tape and regulations are affecting them. Those people are producing top-class stock and we need to keep them. Considering the good work the Minister is doing on the export trade, we need all those cattle, but they need to be of good quality. Deputy Aylward's question is very relevant. We do not want to lose those good breeders from the system.
I acknowledge both Deputies' genuine concern about how to deliver best for the beef industry. However, unfortunately there are no easy answers. Under the rural development programme, while we have reopened BDGP, we will spend all of the €300 million. Not only will we spend all the €300 million under BDGP, we will spend the entire envelope under the rural development programme. That gives rise to very interesting challenges in the context of the Deputies' proposal. There is no easy way out of this. Irrespective of whether it is €200 for every cow or the tapered programme involving the first 30 cows, it has to come from some other area of funding. If they are serious about this, they need to either identify the schemes they want to close off in order to fund it or they need to come out straight and say they want to take from the basic payments of hill sheep farmers, organic farmers-----
The money is unspent.
-----or other small farmers to give it to a particular sector.
The money is unspent.
The Deputy knows that is not feasible and will not happen. I would not lightly propose such a linear cut. The Deputy knows the difficulty we face in getting a linear cut in respect of the national reserve for new entrants. The truth is that there is no headroom in respect of the rural development programme. The only other way to do it is to cut the basic payment. Alternatively the Deputy may be proposing an Exchequer-funded scheme. That funding is not there but we then run into state-aid rules.
The suckler herd is a bigger problem.
Brexit is another issue coming down the line and the beef sector is the most exposed to Brexit with 50% of all Irish beef exported to the UK. The negotiations may take a year or two years and the beef sector will be hardest hit, especially the suckler herd. Teagasc has advised that €4.50 per kg is needed for the survival of the beef industry here. At the moment one would be lucky to get €4 for top quality beef - €3.80 or €3.75 is typical - leaving us short. The beef industry will not survive without some direct payments for it.
The genomics programme is not working. It is half way there but it is not achieving the target the Minister is setting. The Minister has to look at this other thing. I am asking him to keep an open mind on reviewing it.
I have an open mind on it, but the Deputy is proposing a coupled payment.
Yes.
The history of coupled payments is that they incentivise more production. However, more production will drive down the value.
That will be three more than we have.
In two successive rounds of CAP reform we have moved away from coupled payments to decoupled payments and provided payments to things such as improving the genetic merit of the herd. Payments for further environmental measures such as GLAS, AEOS, ANC, knowledge transfer to improve farmers' knowledge on-----
It is not getting to where the money is needed.
I appreciate support for this. However, by and large people who might know better than both of us would not support a coupled payment that would incentivise numbers rather than incentivise quality. I am serious about this. If the Deputy is proposing this in a rational economic way, he has to face up to the fact that there is no headroom in the rural development programme and the only way to fund it is by cutting the basic payment of other farmers and that is not feasible.
