Theresa Ahearn
Ceist:9 Mrs. T. Ahearn asked the Minister for Agriculture, Food and Forestry when the EC early retirement scheme for farmers will come into operation in Ireland; and if he will make a statement on the matter.
Ceisteanna—Questions. Oral Answers. - EC Farm Retirement Scheme.
Frank Crowley
Ceist:28 Mr. Crowley asked the Minister for Agriculture, Food and Forestry when he will announce the introduction of the EC farm retirement scheme; and the date from which the scheme will be operational.
Pádraic McCormack
Ceist:49 Mr. McCormack asked the Minister for Agriculture, Food and Forestry if he will give details of the retirement scheme for farmers over 55 years of age; when this scheme will come into effect; if all farmers will be eligible; and if he will make a statement on the matter.
James Leonard
Ceist:137 Mr. Leonard asked the Minister for Agriculture, Food and Forestry if he will have arrangements made whereby, under the EC farm retirement scheme, applicants in small farm regions who have small acreages with farmyard enterprises will be assessed for pension purposes per labour unit rather than acreage.
I propose to take Questions Nos. 9, 28, 49 and 137 together.
My Department has reached agreement with officials of the EC Commission on the terms of the early retirement scheme for farmers and I hope that formal approval by the Commission will be forthcoming in the next few weeks.
The scheme will be put into operation as soon as it is approved. Application forms and information will be available in good time.
Following consultation with the Commission my Department has been informed that farmyard enterprises were not eligible for participation in the scheme. Accordingly the question of assessing pension per labour unit does not arise. Full details of the draft scheme will be circulated with the Official Report.
EC Aid Scheme for Early Retirement from Farming.
This draft scheme is one of the accompanying measures of the CAP reform agreed in June 1992.
Under EC Regulation No. 2979/92 member states may institute a Community aid scheme for early retirement from farming partly financed by the EC. Early retirement aid may be paid to farmers and to workers.
A draft programme and scheme has been agreed with the Commission. It is hoped that final approval will be obtained shortly. The main points are as follows:
(a) this is a pension scheme open to farmers between 55 and 66 who have practised farming as a main occupation for the preceding 10 years, and who retire from farming definitively and transfer their farms by gift, lease or sale essentially to farmers who will expand their holdings;
(b) the rate of annual pension will be at a basic 4,000 ECUs (£3,515 at current conversion rates) and 250 ECUs (£220) per hectare up to a maximum of 10,000 ECUs (£8,788) for a farm of 24 hectares or over. The pension rate will be fixed in ECUs so as to avail of the benefits of any changes in the ECU conversion rates which could result in increases in the pension when expressed in Irish pounds. For example the rates quoted above are for 1993 and these will probably increase by about 10 per cent in 1994 because of changes in the ECU conversion rate. Payment will be on a monthly basis;
(c) the pension will be paid for a maximum of 10 years but in any event not beyond the retired farmer's 70th birthday nor the retired worker's 65th birthday;
(d) the minimum size of holding to be transferred to a transferee is 5 hectares;
(e) there is a minimum enlargement provision of 5 hectares or 10 per cent of the transferor's holding whichever is the greater——
(i) if a person succeeds the transferor as head of the holding he must meet this enlargement condition
(ii) if a person holds land in his own right which was not the subject of a transfer from the transferor after 30/7/92, he can meet the enlargement condition by taking over the transferor's holding;
(f) there is an upper age limit of 50 years for a farming transferee; the transferee would have to have an agricultural qualification or be otherwise suitably qualified and undertake to farm the land for a minimum of 5 years or for as long as the pension is payable;
(g) transfer of land can be to persons or bodies, or the owner himself can reassign the land for non-agricultural uses, forestry or ecological reserve creation if a suitable farming transferee cannot be found; also a farming transferee can use the released land for forestry;
(h) a pension (one pension only) may be payable where a farm being released has been managed jointly and where a member of the partnership meeting the age criteria or other criteria is not the owner;
(i) there must be a transfer of production/quota rights with the land other than in cases where the transferee does not want them subject to quota regulations;
(j) there will be an element of backdating to allow applicants who ceased farming on or after 30 July 1992 when the EC Regulation entered into force, and who met the qualifying age limits to become eligible for the scheme, however, there will be no retrospective payment of the pension;
(k) there is also a pension scheme for workers (or family helpers) between 55 and 65, under certain conditions, who lose their employment as a result of the farmer's early retirement; rate of pension is 2,500 ECUs (£2,196) per year up to 65, subject to a maximum of two workers per holding;
(l) where the pensioner dies, payment of the balance of the pension due may be made to the spouse and/or dependants, subject to the resulting total annual income not exceeding the maximum of the pension and the average industrial wage as determined by the Central Statistics Office;
(m) the pension will only be paid from the date all the conditions of the scheme for transferors and transferees are met;
(n) payments will be subject to tax where appropriate;
(o) if a State pension becomes payable to a transferor the retirement pension will be offset by this amount.
Department of Agriculture, Food and Forestry,
October 1993.
I would ask the Minister to be more specific regarding the date of implementation of the scheme. Will the Minister outline how farmers will get information about the scheme? Is he aware that at the recent ploughing match his Department was inundated with requests for information on the scheme? Will the Minister indicate whether the Department has an estimate of the number of people who wish to participate in the scheme?
On the timescale involved, I can inform the House that the STAR Committee, which is dealing specifically with this proposal, decided this morning to grant approval to the scheme.
I was about to tell the Minister that.
My colleague, the Minister for Agriculture, Food and Forestry, Deputy, Joe Walsh, brought this matter to the attention of the Government this morning and the Government has granted approval for the scheme.
Another breakdown in communications.
If I were Deputy Dukes I would not trivialise what is regarded as one of the most significant and important schemes ever introduced in terms of farm restructuring.
We will wait and see how it works.
The Minister of State should be allowed to reply to the questions posed in the first instance.
The Minister is provoking interruptions.
Please, Deputy Carey, let us have an orderly Question Time.
As the Deputies opposite know quite well, the level of interest in this scheme is immense. It has been wildly welcomed by all the farming organisations.
We have been telling the Minister that all year.
I appreciate the Deputy's concern about the timescale. It is obvious that the Minister has done everything possible to bring the scheme to fruition, evidence of which lies in the fact that the Government granted approval for the scheme this morning. We expect that the scheme will be in operation in December of this year. As regards the details of the scheme, my understanding is that a memorandum has been circulated on a number of occasions outlining the Government's broad approach to the early retirement scheme. Now that approval has been granted by the Commission and the Government, we will be putting together detailed guidelines in relation to the scheme and we will endeavour to circulate this information to all interested people and organisations.
Will all farmers over 55 years be eligible for this scheme and how many people will be involved? What has been the cause of the delay in proceeding with the scheme? It was to be announced first in early spring, then in early summer, then late summer and now we are promised it will be in operation by the end of the year. I do not know whether that can be taken with a grain of salt. When will the scheme be up and running?
I have already answered the Deputy's last question. We hope that the scheme will be in operation by December of this year. There has been no time delay by the Department or the Government.
It is still early spring.
We submitted our proposals to Brussels well in advance of the closing date. It was our intention to maximise to the greatest extent possible the benefits of the scheme for Irish farmers, and there were a number of queries which needed clarification. There has been no time delay whatever. As to who will qualify, details of the scheme are well known to farmers and farming organisations. A memorandum has been circulated on the matter and in conjunction with my reply I am circulating again full details of the scheme.
To whom?
To Members of the House.
The Minister should send that information to me.
Many Opposition Deputies requested information on the farm retirement scheme and on each occasion I made the information fully available to them. It is very unfair to suggest that there is concealed information in relation to this scheme, of which we are particularly proud.
I wold ask the Minister to reconsider the question of farmyard enterprises. To proceed along the lines suggested will militate against constituencies such as mine where there are many small farmers. In the case of one farmer who has ten acres of land and a labour unit of 1.2, if the scheme is based on acreage he will receive only one-third of the amount he would receive had he the maximum farm acreage. If this scheme is not re-examined it will be very unfair on enterprising farmers with small acreages who supplement their income with other farmyard enterprises.
I appreciate the point raised by Deputy Leonard. He raised that matter with me and the Minister on a number of occasions. I assure the Deputy and the House that this requirement was pursued with the European Commission who gave a negative reply in that it clearly indicated that the farm retirement scheme is related to land and that a certain element of reestructuring is involved. Therefore the people in whom the Deputy has displayed an interest cannot be accommodated within the scheme.
Was it the Tánaiste who was sent to negotiate on the matter?
I will contain my satisfaction with this matter, particularly in view of the fact that the Minister is about to issue another press release launching the farm retirement scheme. I welcome the fact that agreement in principle has been reached with the Commission. Will the Minister confirm that the moneys allocated in the 1993 budget for the farm retirement scheme will not be used this year as the scheme will not be off the ground by the end of the financial year? To what specific purpose does the Minister intend to put those moneys?
It is our intention that the scheme will be off the ground in the current year.
Experience of EC schemes to date has been that many farmers have lost out due to rigidity of the rules. Has the Minister succeeded in devising some clause to meet the needs of applicants in exceptional circumstances?
The scheme as it is formulated and approved by the Commission is a very generous one. All farmers who meet the conditions will qualify for the scheme. For example, farmers who transfer five hectares of land will qualify for the minimum pension provision. I am very optimistic and hopeful that the scheme will be successful.
With regard to the press releases, it is not the information given but rather the information not given which is giving rise to all the questions. Can the Minister of State say if it is proposed to exclude part-time farmers, farmers, whose spouses are working and young farmers with a part-time job who will inherit the land from the scheme? If this is so, does the Minister of State accept that vast areas of the country will not benefit from the scheme? We are all concerned about this issue and I ask the Minister to clarify the position.
The conditions governing the scheme are laid down in Community regulations. Farmers who qualify under the scheme will have to derive 50 per cent of their income from agriculture. We discussed this matter with the Commission in great detail. I can inform the House that in the case of a husband and wife where the husband does not qualify under the scheme and it can be demonstrated that the wife is involved in full time farming she will be entitled in her own right to make an application under the scheme, which, hopefully, will be approved.
What about the person who inherits the land.
I presume the Deputy is referring to the recipient.
Yes.
The conditions in this respect are clearly laid down and are quite simple. The only problem, if one wanted to describe it as such, is the requirement of additionality which amounts to 5 per cent of the land being transferred.
As the Minister is aware, a number of broiler producers in my constituency, many of whom were farmers, diversified out of economic necessity. Will these producers be debarred from the scheme because they are engaged in what would be regarded as a farm enterprise?
One of the conditions of the scheme is that a farmer must transfer five hectares of his land. With regard to the type of alternative farm enterprises referred to by the Deputy, the income from the enterprise will be taken into consideration in assessing eligibility under the scheme. The level of benefit under the scheme will be calculated on the basis of the amount of land being transferred.
I support the request by my constituency colleague, Deputy Leonard, to have the scheme re-examined. It is very hard to accept that some small farmers who have made extraordinary efforts in very difficult conditions will once again not be eligible for inclusion in the scheme. Can the Minister tell us the number of farmers who have indicated their wish to participate in this scheme? Having regard to the number of phone calls I received and the number of questions I have been asked, it seems that there is panic in the farming community — farmers have lost the will to stay in farming, they are worried about CAP reform——
A question please, Deputy.
Farmers see this scheme as one way of getting out of farming.
If it were not for the efforts of my colleague, the Minister for Agriculture, Food and Forestry, Deputy Walsh, the scheme would not be as suitable as it is for Irish farmers. It has to be borne in mind that the European Commission is funding this scheme to the extent of 75 per cent. Apart altogether from its direct benefit to farmers and Irish agriculture, the scheme is extremely valuable and attractive so far as the economy is concerned. I accept the views expressed by the Deputy and I understand his concerns. I agree that he comes from an area where there is a very high level of off-farm enterprises. However, we could not convince the Commission of the importance of including these enterprises in the scheme. The best concession we could get in this regard was a commitment to take into consideration the income derived from alternative farm enterprises in deciding qualification in terms of the transfer of land. I can assure the Deputy that the Minister and I identified this problem long ago and, together with other aspects of the scheme originally circulated by the Commission, we took it into consideration in the negotiations. The original scheme formulated and circulated by the Commission has been amended and adjusted.
I call Deputy Browne, after whom I will call Deputy Tom Foxe for a final question.
I have been indicating to both you and the Ceann Comhairle for some time.
I beg your pardon, Deputy, I did not see you indicating.
(Carlow-Kilkenny): When does the Minister of State think farmers will get the money? He mentioned December and I should like to know if this is the closing date for applications or the date for the processing of applications. When does the Minister think farmers who apply for the early retirement scheme can expect the money?
The week before the European elections.
The STAR Committee agreed to our proposals this morning, the Government approved the proposals today and funding has been provided. I expect and hope the scheme will become operational by the end of December for qualified farmers.
(Carlow-Kilkenny): Does this mean that money will be paid in December or that farmers can apply for inclusion in the scheme and will have to wait to be told whether they are or are not eligible?
It means that once a farmer applies for inclusion in the scheme and meets the requirements he will qualify for a pension.
He will have to wait until Easter.
How many farmers availed of the last retirement scheme?
I do not have that figure with me but I can tell the Deputy it was not a very successful scheme. We took the reasons for the lack of success of that scheme into consideration in formulating the new scheme. I expect a considerable take-up under the new scheme.
I am delighted the House has encouraged the Minister to tell the Minister of State what was decided today. At least we are making a contribution to open Government, something the Government does not seem to be able to do. Will the Minister of State give an undertaking that the measures for implementing this scheme will be properly constructed and properly put in place so that those who apply under it will not have to wait as long as farmers had to under the young farmers' installation aid grant scheme? In some cases farmers had to wait for four years——
Five years.
——to be told they were eligible for inclusion in the scheme. Will the Minister of State give an undertaking that the arrangements will ensure that this scheme works and produces results without delay for both the farmer who gets a pension and the person to whom the land is transferred, which is far more important?
I am sure the House will agree that our handling of the scheme up to now is a clear indication of our desire to have the scheme operational as quickly as possible.
If that is the case, I am very pessimistic. Does early spring now start in October?
The Minister of State without interruption, please.
Deputy Dukes referred to the bureaucracy involved in the operation of schemes. I can assure the Deputy that it is our intention to minimise the amount of bureaucracy in this scheme. I am satisfied that the excellent team of civil servants in the Department of Agriculture, Food and Forestry who will be dealing with this scheme will make steps to ensure that it becomes operational as quickly as possible. The only doubt which exists about the speed with which the scheme can be brought into operation relates to the decision to be taken by the Commission, which we have been told will take four to six weeks. One cannot predict with 100 per cent certainty——
The Minister is correct.
(Interruptions.)
That is the caveat.
I am being totally honest when I say we have to get Commission approval, which we anticipate will take four to six weeks.
Will the scheme be introduced before next June?
We remain deeply cynical.
Question No. 10.