The House will hear two minute statements on matters appropriate to the Minister for Agriculture and Food and to the Minister for Industry and Commerce. I propose to call on Deputies I have selected in the following order: Deputy Deenihan and Deputy Deasy in respect of matters to be put to the Minister for Agriculture and Food, and Deputy Gerry Reynolds in respect of a matter to be raised with the Minister for Industry and Commerce. Each Deputy is entitled to two minutes in respect of each matter and each statement will be followed immediately by a two minute reply from the appropriate Minister or Minister of State.
Adjournment Debate. - Agriculture and Industry and Commerce Matters.
Because of the dispute between ERAD and the vets, the majority of herds were not tested during the normal round of testing in 1991. This has resulted in a major problem for farmers who want to sell off cattle now as they are required by the Department to undergo a full herd test before selling. This is causing major hardship for farmers in the middle of the calving season. In many cases pregnant cows have to be pinned and needled on the same day they calve. This results in the loss of calves and is causing major disruption in farmyards. Because of this requirement many farmers are waiting for cows to calve before they sell off cattle and this results in serious financial problems for many farmers and a loss of income at a crucial period.
Farmers in intensive dairying areas like North Kerry are particularly affected. The Minister should allow farmers to carry out private testing on the cattle they wish to sell and the remainder of the herd could have the compulsory test in May. This is a very unfair imposition on farmers. They paid over £30 million in levies in 1991 for the disease eradication scheme. The blame for the breakdown in testing in 1991 does not rest with the farmers. The Minister and ERAD must share the major portion of the blame. I appeal to the Minister to intervene in this matter as soon as possible.
I thank Deputy Deenihan for raising this matter.
In the first instance I refute the suggestion that there is any hardship caused to farmers by the current interim testing arrangements which require that herd owners wishing to dispose of stock must have a full herd test unless their herd has been tested within the previous 12 months. This herd test which is, of course, free of charge to the herd owner, was first introduced last year to provide farmers with the opportunity to retain their clear herd status.
In the absence of a full round of testing in 1991 because of ongoing discussions with the Irish Veterinary Union in regard to meeting the conditions set by the Commission for EC funding, a number of herds have not had a test within the previous 12 months. In accordance with EC health and trade requirements and in the best interests of the agricultural economy, ERAD could not approve movement from such herds without a full herd test.
I also understand that, on veterinary grounds, there is no evidence to support suggestions of hardship to heavy or pregnant animals being tested at this time of the year.
As the House is aware, the present ERAD arrangements are due to end in April. In line with the Governments Programme for Economic and Social Progress, I am at present having discussions with the leaders of the farming and veterinary organisations to evaluate the operation of ERAD since its inception in 1988 and with a view to designing the shape and scope of future eradication programmes. I am very much encouraged by the response of the various interests concerned and I am optimistic that a consensus can be reached on the type of programme to be put in place for the next four years.
I want to inquire about the Leader Programme. This is a very worthy series of projects funded primarily by the EC and designed to provide badly needed jobs in rural Ireland. This programme was to be set in train in 1991 and a number of communities got together and put forward a series of projects. I understand that the total number of schemes forwarded to the Department of Agriculure and Food was about 34 and initially we were led to believe that ten or 12 would be grant aided partially by the EC and partially by the Government. The final list of successful applicants has yet to be published.
I would like the Minister to enlighten me tonight as to what has happened. I understand that some countries, such as Portugal and Greece, may not have taken up their full allocation of funds, the extra moneys may have become available for Ireland and that instead of a list of ten or 12 being deemed eligible, the number may have been as high as 17.
Waterford Foods co-ordinated the project for Waterford and the bulk of the individual projects were based in west Waterford. which is such a well known unemployment black spot that it was included in the pilot scheme instigated last year by the Department of Labour. Has that list been vetted, finalised and forwarded to Brussels by the Department? Has the Waterford project been included? If not, is there any prospect of its being included? There are over 200 jobs involved.
Leader is the EC Commission's initiative on rural development. It is an excellent scheme, not least because it backs and supports local initiative and comes in behind what local co-operative groups and voluntary bodies think is best for deprived areas. There was a most encouraging response to the programme and it was not possible for all applicant groups to be selected for funding in the first tranch. Of the 34 plans submitted to the Commission, 17 are being approved for funding.
Recently my colleague, Minister Woods, made a point of meeting representatives of the non-selected groups, including Waterford, and urged them to remain in existence and to explore sources of funding for some at least of their projects through existing programmes or schemes.
I would hope that, depending on the success of the first initiative, there will be a successor to Leader in which the latter groups will have a further opportunity of seeking funding for their business plans. I assure Deputy Deasy that I will continue to press for the inclusion of a full number of groups and for a positive response in relation to groups with viable projects submitted.
The matter of insurance costs for young drivers has been raised on many occasions. The Government have failed dismally in trying to provide adequate employment for our young and well educated work force. Many people are forced to emigrate, but those who stay are penalised by a brutally unfair system of motor insurance. I live ten miles from Northern Ireland and have seen on Ulster Television advertisements by garages selling cars offering free comprehensive insurance cover for 12 months. The average cost of comprehensive insurance in Northern Ireland is between £200 and £500. The average cost in the Republic is between £1,500 and £2,000 for the same cover. The latest publicised case of our unrealistic system of insurance was last week when Andrew Strong was quoted the incredible price of £10,000 for insurance on a Porsche car which was given to him by his record company. That was some commitment.
We talk about keeping our young people at home but if Andrew Strong, or anybody like him, needed an incentive to leave this country, the prohibitive and penal cost of motor insurance would certainly be a factor all on its own. The Government have commissioned a report on the motor insurance industry and the cost to young drivers. I would like to ask the Minister when this report will be made public and what immediate plans he and his Department have to try to establish fair and equitable motor insurance cover for the young people of this country.
This matter has been raised here many times. The fact that there is a problem has been acknowledged and the reasons given many times. The fundamental causes of high insurance costs for motorists, including young drivers, should be well known and they have been discussed on frequent occasions in this House. I would particularly refer the Deputy to the contributions which both the Minister for the Environment and I made here on 2 and 3 July last. These contributions included a comprehensive list of measures to improve the environment for motor insurance, including insurance for young drivers, identified by the inter-ministerial group on motor insurance and subsequently endorsed by Government.
The measures, announced but not yet implemented, including the introduction of the necessary legislation by the Ministers for the Environment and Justice, are being given priority attention. The Deputy will appreciate that questions about road traffic legislation and legislation in relation to the courts are properly addressed to the Minister for the Environment and the Minister for Justice.
The measures identified by the inter-ministerial group on motor insurance have the objective of improving the environment for insurance, particularly motor insurance. The extent to which this objective is achieved will depend on the timing and the scope of their implementation and the impact which implemented measures will have on the frequency and cost of insurance claims.
In any market the price of motor insurance is substantially determined by the cost of claims and level of claims. An EC-wide survey carried out by a French research company in 1990, based on a selection of family cars, found that Ireland had the highest third party motor insurance rates in the EC, whilst Irish comprehensive rates were the third highest in the EC. In both instances the survey indicated that the Irish rates were substantially in excess of the EC average. In addition research by my Department suggests that the average cost of motor insurance claims in Ireland is considerably higher than most of the other EC member states. I have recently reconstituted the Motor Insurance Advisory Board and I have asked them to carry out an up-to-date survey on comparisons between premium and claims rates per registered vehicle in Ireland and those obtaining in other European countries.
Over the past number of years insurers have suffered large underwriting losses on their motor accounts. In 1988 insurers sustained underwriting losses of £48 million. These losses increased to £116 million in 1989 and to £130 million in 1990. Confronted with these losses, and in order to maintain their viability, insurers have considered it necessary to increase their premium in line with their claims experienced and to exercise more selectivity in the type of risk undertaken. The cost of these claims can only be met by an insurer if an appropriate premium is forthcoming to cover the risk involved.
I would point out that unless and until the claims experience, including the claims frequency and levels of compensation paid to victims of road accidents, in Ireland matches that obtaining in other European countries there will be divergencies between motor insurance premia in Ireland and those applying in other countries.
That is the root of the problem. We insist through our legal system on paying ourselves many times what would be paid in another country for a similar injury and as a result we have premiums which are many times what they are in other countries. When we cure the legal problems and the problems associated with the award system, we will cure the problems of which the Deputy rightly complains.
The Dáil adjourned at 9.10 p.m. until 10.30 a.m. on Wednesday, 5 February 1992.