I move:
That a supplementary sum not exceeding £4,609,000 be granted to defray the charge which will come in course of payment during the year ending on the 31st day of December, 1975, for the salaries and expenses of the Office of the Minister for Agriculture and Fisheries, including certain services administered by that Office, and for payment of certain subsidies and sundry grants-in-aid.
The main Estimate for Agriculture for 1975, amounting to £76,927,000, was passed on 19th June last. A Supplementary Estimate providing £9 million for consumer subsidies on butter and liquid milk was passed on 18th July last. This brought the total provisions for such subsidies in the Agriculture Vote to nearly £10 million taking account of the provision of almost £1 million already included in the main Estimate for consumer subsidy on butter.
This further Supplementary Estimate when added to the previous Supplementary Estimate and the original Estimate for 1975 brings the total net expenditure from the Agriculture Vote to £90,536,000. The £4.6 million now sought takes into account miscellaneous savings amounting to £11.3 million to which I shall be referring in the course of my statement.
The first item I shall deal with is the extra provision required in connection with the capital grant schemes operated by my Department. The total capital grant payments under subheads D.2, D.3 and M.1 with the adjustments now being made will exceed £10 million in 1975 as compared with £6.1 million provided for the nine months of 1974.
Grants continue to be payable in respect of works carried out under the former land project and farm buildings, water supplies and horticultural schemes. As recently announced, the date by which works must be completed under these schemes in order to qualify for grant payment has been fixed at 30th September, 1976. These schemes will thus, effectively, cease to operate as from that date.
Already, and increasingly so from now on, capital grants to farmers will come under the farm modernisation scheme. In the present year payments under that scheme are expected to reach about £3.35 million. Considering the slow start to that scheme, this represents a satisfactory achievement. The saving on the original provision for the scheme is offset by the extra expenditure under the farm buildings and water supplies schemes.
The number of applications to participate in the farm modernisation scheme has shown an encouraging upward trend recently. This reflects the growing confidence of farmers in the future of the industry and their willingness to undertake the investment necessary to expand production and improve efficiency. It also, I believe, shows a growing recognition among farmers that the financial incentives available under the scheme are very favourable and that the scheme itself is valuable particularly in the emphasis it places on planned development.
Although the scheme of grants for slurry disposal ended on 1st February, 1974, a large number of claims remained to be processed at that date and a sum of £15,000 was provided in the main Estimate to meet claims coming for payment. The additional £30,000 now sought will suffice to clear the back-log of outstanding claims.
On the horticultural side the Supplementary Estimate provides sums of £120,000 for the subsidy on heating oil for horticulture and £50,000 for additional aids to horticulture, including assistance to producer groups. The extension of the heating oil subsidy was announced by the Minister for Finance in his budget speech on 15th January and the additional amount provided is to meet expenditure for the period January to June, 1975. The £50,000 for the horticultural aids scheme is to meet outstanding claims under this scheme which has now been superseded by the farm modernisation scheme. Because of an estimated saving of £150,000 on grants for glass-house nurseries and mushroom units, the net additional amount required for horticulture is £20,000.
Turning to cattle, the expenditure provided for the EEC slaughter premiums scheme represents our national contribution to the scheme. Part of the supplementary provision arises from the carry over of expenditure incurred in 1974. At the time the Estimate was framed the scheme was due to end by March, 1975, but was renewed for the period up to the end of February, 1976. In all about 600,000 animals will have qualified for premiums in 1975. No national contribution has been payable under the scheme since mid-March, 1975.
The special premium on exports of beef to the UK relates to an arrangement with the United Kingdom whereby beef from animals qualifying for the slaughter premium here which is exported to that country qualifies for the variable premium there. Full recoupment is made by the United Kingdom Government and is provided for under Appropriations-in-Aid.
It is necessary to provide £45,000 in addition to the sum of £400,000 already voted to meet the cost of premiums payable under the EEC dairy herds conversion scheme in 1975. Fifty per cent of the expenditure under this scheme in any year is recoverable from the EEC in the following year. We had expected to spend £400,000 in 1974 and recover £200,000 this year. In fact, we spent only £300,000 in 1974 and recovered £150,000 this year leaving a shortfall of £50,000 in receipts.
The total sum voted for the bovine tuberculosis and brucellosis eradication schemes including the voluntary pre-intensive brucellosis scheme in 1975 was £14.3 million. Receipts from sales of reactors were estimated at £3.2 million, giving an expected net expenditure of £11.1 million.
Gross expenditure for the year which is comprised mainly of compensation to farmers for reactors removed and fees paid to veterinary surgeons for testing and sampling will be approximately £15.3 million or an increase of about £1 million on the original provision. This increase will be more than offset by higher receipts from sales of reactors to meat factories, which will be about £4.76 million. The net position, therefore, is that there will be a saving of about £0.56 million on the amounts originally provided for these schemes for 1975.
The £2.2 million being provided for cattle feed vouchers represents the advance to the meat industry announced by the Minister for Finance in the January budget to supplement the fund set up by that industry to issue vouchers to small farmers for the purchase of feed for young cattle at a reduced price last winter. The advance is being recovered from the industry by withdrawing temporarily a VAT credit payable to meat factories and other registered cattle purchasers.
An additional sum of £4 million is being sought for the less favoured areas scheme bringing the total to £10 million. With the switch by farmers to that scheme, a saving of £4.8 million is envisaged under the beef cattle and sheep headage payments schemes. A sum of £100,000 arises in respect of payments under the export guarantee scheme on exports of mutton and lamb to Britain. Under the terms of the Anglo-Irish Free Trade Area Agreement this amount will be refunded by the UK Government in 1976.
The provision for 1975 for lime transport and fertiliser subsidy is £6,340,000 and it is expected that there will be a saving of about £1.9 million on this provision. This is mainly due to farmer resistance to the purchase of fertilisers at present high prices. In 1973-74 farmers spent £54 million on fertilisers and in 1974-75 they spent £67 million. In 1974-75 usage had been on a level with that of the previous year farmers would have had to spend £95 million. This illustrates the impact of price increases since 1973.
I would again appeal to farmers at least to maintain the fertility status of their soils as there is no prospect in the foreseeable future of any reduction in fertiliser prices. To cut down on fertiliser imputs now could be false economy leading to a substantial reduction in yields. The restoration of the fertility status at a later date would be very costly indeed.
I expect a saving of £230,000 on the subsidised loan scheme for the retention of young cattle. This scheme was introduced on 8th November, 1974 to help smaller farmers to purchase winter feed and retain young cattle which would otherwise have to be sold at depressed prices. A subsidy of 8 per cent per annum was payable on each loan up to 31st October, 1975. Participation in the scheme was very much below expectations.
During the year our scheme to provide a socio-economic advisory service for those engaged in agriculture under Directive 161 was agreed with the EEC Commission. My Department have initiated courses of training in this type of advisory work open to interested members of the agricultural advisory services. Project work to establish more precisely the requirements of socio-economic advisory work under our conditions is being undertaken. As the development of the scheme is still at an early stage a saving of £22,000 is anticipated on the Vote provision.
The scheme under Directive 161 of vocational training for those engaged in farming was launched this autumn and is being operated through the committees of agriculture. Thirty-five courses are being run by committees at local centres during the present winter and as the scheme develops a wider range of courses at basic and more advanced levels will become available. To complement the efforts of the committees, my Department recently opened a new training centre in Athenry. A ten-week course in general agriculture for young farmers sent forward by the committees is already in progress at this new centre. As the operations under this scheme are also at the initial stage, I expect a saving of £60,000 on the sum provided in the Vote.
A sum of £300,000 in addition to the sum of £2,400,000 already provided in the main Estimate is required to meet the cost to county committees of agriculture of implementing the provisions of the national wage agreement and of paying a salary award to advisers employed by the committees emanating from conciliation and arbitration proceedings.
The extra provision of £240,000 in respect of the non-capital grant to An Foras Talúntais is to meet the cost of salary and wage increases for the staff of the institute which became effective under the national wage agreement during the year. This extra provision brings the total non-capital grant to the institute for 1975 to £4.74 million, a substantial contribution to agricultural research and development.
Incidental expenses of market intervention are expected to cost a net £3 million more than originally provided; of the extra gross expenditure of £15 million, £12 million is estimated to be recouped from the EEC this year.
Since the main Estimate was prepared, market intervention in skimmed milk powder has been introduced and the level of activity in beef intervention has proved to be higher than anticipated with the result that the provision for incidental expenses arising out of intervention is inadequate.
As Deputies will be aware, in April, 1975, I felt it necessary to introduce a quota system for factories whereby they could not sell to intervention more than 50 per cent of their weekly kill of eligible animals. I consider that this step was in the best interests of the factories themselves as a stimulus to commercial disposals and also in the best interest of the intervention system itself as a means of avoiding overtaxing the freezing and storage facilities available to us.
Intervention expenses include the cost of such items as storage, transport and handling charges as well as interest on the capital used for the purchase of the products. Such intervention activities are carried out on behalf of the EEC and payments in respect of expenses incurred are received from FEOGA in accordance with a scale of allowances based on average costs throughout the Community. The difference between expenditure and recoupment as now estimated is partly due to our relatively high interest charges.
I have now covered the main items in the Supplementary Estimate which I commend to the House for approval.
