I move:
That a supplementary sum not exceeding £39,783,000 be granted to defray the charge which will come in course of payment during the year ending on the 31st day of December, 1980, for the salaries and expenses of the Office of the Minister for Agriculture, including certain services administered by that Office, and for payment of certain subsidies and sundry grants-in-aid.
The main Estimate for Agriculture for 1980 amounted to £140,041,000 which with this Supplementary Estimate brings the total net provision for the year to £179,824,000.
1980 has been a difficult year for farmers, the problems on the economic and marketing side being aggravated by unfavourable weather conditions especially during the summer and autumn. The Government have been very conscious of the adverse situation in the agricultural industry and the severe pressure on farmers' incomes. The Taoiseach, the Minister for Finance and I have had several discussions during the year with the main farming organisations, and in recent months the Government have taken a number of measures to help farmers to overcome their difficulties and to ensure the highest possible level of agricultural production. These measures account for the bulk of the present Supplementary Estimate.
The biggest increase — £23 million — is in respect of the farm modernisation scheme at Subhead M1. A sum of £36.5 million was provided in the original Estimate in respect of grants to farmers under the farm modernisation scheme including the western drainage scheme. This sum has proved to be inadequate because of the unprecedented number of claims being received for payment. Notwithstanding the difficult situation in agriculture, farmers continue to show a high level of confidence in the future of their industry by investing at an unprecedented rate in land improvement, buildings and so on. As a result a further sum of £23 million is required to cover payments under these schemes for the remainder of the year, that is £8 million in addition to the £15 million increase announced in September. This will bring the total to £59.5 million by the end of this year, or 70 per cent more than the £34.5 million paid last year.
The encouraging level of investment in farm development is an indication that despite their difficulties farmers have confidence in the long-term prospects for agriculture. Higher productivity is vital to agricultural prosperity and this can be achieved through judicious capital investment. Our agriculture was badly under-capitalised before we joined the European Community, and it was clear that considerable investment would be required if we were to exploit the opportunities which membership of the Community offered. Much has been done since and many of our farms are now highly developed. But there is still scope for further improvement, particularly by way of land improvement. Here, of course, the investment aids under the farm modernisation scheme and the western drainage scheme are of the utmost benefit and by providing as much as £23 million extra in this Supplementary Estimate the Government are showing in a positive way how they are prepared to assist and encourage farmers to make worthwhile investment that will lead to an expansion of production.
Another important element in the package of measures announced in September was the substantial increase in livestock headage grants payable to farmers in the disadvantaged areas. An additional £8.432 million is now being sought under Subhead M.3 to finance the increased grants. In the case of cattle and beef cows, the higher rates payable have been increased from £17 last year to £32 this year, while the lower rates have been increased from £13 to £28. In the case of sheep, the various rates have been increased by £1 and now stand at £5 per head for mountain hoggets, £4.50 for other hoggets and £4 for mountain lambs. These very substantial increases have been made possible largely as a result of the raising of the level of FEOGA reimbursement from 35 per cent to 50 per cent, which I successfully negotiated in the EEC prices package earlier in the year. In the case of suckler herds, farmers will also qualify for an EEC premium of £13.18 which will be paid early next year on each suckler cow of a specified meat producing breed and also for an additional national premium of £12 on each cow over and above the number present in the herd at the 1979-80 round test for tuberculosis. One result of these increases will be to bring to as much as £57.18 the grant for each additional cow that also qualifies for headage payments in the disadvantaged areas. I hope that the attractive incentives now available will help to reverse the downward trend and boost the size of the beef suckler herd.
During the year the sheep industry encountered some uncertainty because of the delay in introducing the common organisation of the market for sheepmeat and also because of some curtailment of our exports to France. In order to help producers I announced in June the reintroduction from 1 September of grants under the mountain lamb extension scheme in respect of exports of mountain wether lambs. The rate then announced was £1.50 per head but in view of the difficulties affecting hill sheep producers the Government decided in September to double the grant to £3 per lamb. I am glad to say that this measure has been very successful, and substantial numbers of lambs have come from the mountains either for fattening on the lowlands or for export, mainly to Italy. The additional expenditure for this scheme and for the lowland hogget ewe subsidy scheme is provided for under subhead D.5.
As Deputies are aware, agreement was recently reached, after many years of negotiations, on a common organisation of the market for sheepmeat. Community arrangements will take the place of national measures for the support of the sheep industry. Sheep producers can now look forward with greater confidence to the future, and I am confident that they will meet the challenge and opportunities of a Community-wide market and expand production of quality lambs.
A new provision of £600,000 is being included under Subhead D10 for winter fodder schemes. Because of the severe effect of bad weather on the hay crop this year special schemes were introduced in August to encourage the production of additional winter fodder. These schemes provided for, firstly, a subsidy of £20 per tonne of calcium ammonium nitrate or equivalent high nitrogen fertiliser purchased and used between 13 August and 6 September and, secondly, a subsidy of £3 per tonne of silage made on farms which had not made silage before, up to a maximum of 50 tonnes per farm.
I expect that some 17,000 farmers altogether will benefit from these schemes. The success of the schemes is most encouraging, and I am particularly glad that many producers who did not previously make silage have come to realise the advantages of silage as winter fodder. Increased production of silage will put producers in a better position to carry more stock over the winter months, and so help to counteract the traditional heavy disposals of cattle in the autumn, which can only weaken prices at that time.
As a food producing and exporting country we must be prepared to concentrate more attention on the promotion of a high quality image for Irish food. Mainly because of lack of funds we lag considerably behind our competitors in this field. Admittedly Coéras Traéctaéla and the various agricultural marketing agencies do a certain amount of promotional work but even their efforts are limited and there is, I feel, a void in adequately promoting Ireland as a food exporter on a general level. In an effort to make a start in tackling this problem I decided in June last that £75,000 would be made available for suitable projects recommended by the Agricultural Exports Co-Ordinating Group for the promotion of agricultural exports generally. This sum is accordingly being provided under subhead E3. It will be matched by an equal contribution from the export agencies represented on the group. The money will be used for promotional work additional to, and of a more general nature, than that carried out by the agencies for their individual products. I fully realise that the amount is small for the job I have in mind but at least it is a start. Already the group have carried out surveys on attitudes of people in France and Germany to Irish food products and they have followed up these studies with general advertising campaigns for Irish food in the countries mentioned as well as some specific store promotions.
A further element in the September package of measures to assist farmers was the allocation of an Exchequer contribution to maintain the charges to herdowners for the treatment of their cattle for warbles at last year's levels. Subhead C4 includes a provision of £440,000 to meet the cost of this measure in 1980. Apart altogether from animal welfare considerations, the eradication of the warble fly will enhance the health status of our national herd and will add considerably to the value of livestock output by improving milk yields, by improving the quality and size of beef-cattle, and by eliminating warble-damaged hides. Despite a late start to this season's campaign the number of animals dressed to date has been satisfactory compared with previous years. I would again urge all herdowners to co-operate fully with the A1 centres which are responsible for the dressing and certification of animals under the scheme.
A feature of this year's Warble Fly Eradication Scheme is the exemption of herdowners in County Donegal from the requirement of having to treat their cattle. This exemption covers over 200,000 animals and it is envisaged that, in the event of eradication schemes in future years, similar relief could be extended to herdowners in other areas which, like Donegal, achieve a consistently low incidence of warble infestation.
Under subhead A.1 provision is made for a further £1.4 million to meet the cost of pay increases under the 1980 national understanding, as well as other miscellaneous increases in pay and allowances. The increases under subheads B4, 11, and J amounting to over £1.75 million are also due mainly to the implementation of pay increases, including the national understanding, by An Foras Taluéntais, Coéras Beostoic agus Feola and Bord na gCapall. An additional £975,000 is being sought under subhead A.3 to meet the cost of increases in travelling and subsistence rates which were sanctioned during the year, and to provide for increased inspection activity, particularly on the farm modernisation scheme.
The excess of £467,000 on subhead B.7 is due principally to the cost of salaries of officers of my Department who transferred to ACOT on 1 July and to the cost of the new national understanding for staff generally in that organisation. There are a number of savings on several subheads as well as a deficiency in Appropriations-in-Aid because of the transfer of staff and functions to ACOT on 1 July. These arise only because the transfer had to be made during the course of the year. In future years, finance for ACOT will be provided in a single subhead.
Under subhead C2 a sum of £8,397,000 was provided in the main Estimate for bovine tuberculosis eradication measures. This sum was almost £1.4 million more than was provided in 1979 but it is now necessary to seek an additional £2,363,000 to meet the overall cost of these measures in 1980. The increased expenditure is attributable in the main to three factors: firstly, higher fees for TB testing payable to veterinary practitioners, arising from acceptance of an independent assessment of fee structures; secondly, an increase in travelling and subsistence expenses of Department staff engaged in the operation of the eradication scheme; and thirdly, the disclosure of a higher number of reactors than was anticipated.
Progress is being made with TB eradication but there is still some way to go. Although the incidence figures from the current round of testing which started in June show an improvement on the last round, it is disquieting to find that more than one in every 40 herds is still turning up reactors. On top of that we have a few thousand more herds locked up from earlier rounds and from pre-movement tests and lesions discovered at factories. The southern dairying counties where TB incidence was always highest are now showing a marked improvement. On the other hand, the position is deteriorating in some midland counties. My Department are watching these trends carefully and will do everything possible to identify the cause of these outbreaks. In the last analysis, however, it is the farmer who owns the cattle who can do most to see to it that once his herd is clear it remains so.
The excess arising on bovine TB is offset by a saving of £1,350,000 in expenditure on brucellosis under subhead C3 and a saving of £999,990 under subhead C5 because the balance in the hardship fund is adequate to meet likely commitments for the rest of the year. The reduction on brucellosis arises mainly because the number of brucellosis reactors for which grants are payable on slaughter has been less than anticipated. This in itself is a good indication of the progress we are making in reducing the level of the disease in our herds. I am confident that, with continued herd-owner co-operation, we will move rapidly towards our goal of total eradication of brucellosis within the next five or six years.
I can report success also in the case of leukosis. This disease has for all practical purposes now been eliminated from the national herd. Because it is a very slow-acting disease, those herds which were infected had to be kept under restrictions for up to two years. This led to overstocking problems which had to be relieved by slaughter of some of the stock and the payment of compensation for the animals slaughtered. The amount of compensation paid this year is of the order of £110,000 and this is provided for in subhead C4. Restrictions have now been lifted on most of the herds concerned and any further compensation payments will, therefore, be limited. This disease came to us in stock imported from Canada. We were fortunate to get to grips with it before it could spread through our own herd and to have had the utmost co-operation from the herdowners concerned in dealing with it. It provides a timely reminder, however, of the need for perpetual vigilance to guard against the introduction of those exotic animal diseases which are endemic in many other countries.
The additional amount of £1.45 million required for subsidies on milk and butter under subhead E1 is made up of £650,000 for liquid milk subsidy and £800,000 for butter subsidy. The excess in the milk subsidy element is due to an increase in the level of consumption this year and to some carry-over of claims from last year as a result of the postal strike. The excess on the butter subsidy element arises from an increase of some 7 per cent in the level of butter consumption this year.
In the beef sector the year has been characterised by very high disposals of cattle. It is estimated that slaughterings at export premises will total some 1.4 million head as compared with 1.17 million head in 1979. As a result sales of beef to intervention have been much greater than was anticipated, and it is now expected that total intake will reach 112,000 tonnes by the end of the year. This high level of intake together with heavy interest charges on borrowings for the purchase of intervention beef are the main reasons for the additional amount of £11.3 million being sought under subhead M6. There will, however, be increased receipts of £8 million from the EEC under subhead N19, and so the net increase on intervention is $3.3 million
While I have criticised over-reliance on the intervention system, I recognise that intervention provides a valuable support for the market especially at this time of the year. Because of this I was particularly disturbed at a recent decision of the EEC Commission to suspend intervention for beef forequarters until March next. In view of the consequences which this might otherwise have for our beef sector, I decided to suspend for the same period our national arrangement which restricted intervention intake to 50 per cent of eligible slaughterings. At the end of last week the Commission decided to extend the type of beef hindquarter eligible for intervention to include eight-rib pistola hindquarters. I had sought this extension at the meeting of the Council of Ministers earlier in the week, and the Commission's quick response is welcome and will give increased marketing flexibility to our exporters.
The sum of £1 million sought under subhead M9 is in respect of payment of the special variable premium on exports of beef to the United Kingdom and will bring total expenditure to £2.5 million in 1980. However, this expenditure is balanced by a corresponding increase in receipts from the UK Government as shown under subhead N20.
The balance of the Supplementary Estimate consists of extra provisions for a number of miscellaneous items, including expenses of various advisory councils and committees, residual payments under discontinued schemes, interest on loans by the ACC, pensions to former employees of the Dairy Disposals Company, extra cost of fertiliser aid under an FAO scheme, and consultancy fees.
There is a substantial increase of £9½ million under Appropriations-in-Aid. This is mainly attributable to the increased recoupments from the EEC for intervention and from the UK Government for the variable beef premium, which I have already mentioned, as well as increased recoupments from the EEC under the disadvantaged areas schemes.
The gross total of this Supplementary Estimate is just under £54 million and the net total is some £39¾ million. These are very substantial sums and they will impose a strain on the Exchequer. However, despite the severe financial constraints at the present time, the Government have decided that these funds should be made available to help the agricultural industry to meet its current difficulties. The Government are fully conscious of these difficulties, and we have already shown by the measures taken during the past few months that we are prepared to help farmers to maintain their incomes and to expand production.
We are, of course, keeping the agricultural situation under continuing review and there are continuing discussions with representatives of the farming organisations. At Community level we shall be seeking substantial price increases in the coming months. On the domestic scene, too, we shall continue to do what we can to help within the limits imposed on us by the availability of resources. In the meantime this Supplementary Estimate will provide the funds for the very substantial and comprehensive measures which we have already taken to meet the agricultural situation.
