Brian Cowen
Ceist:25 Mr. Cowen asked the Minister for Agriculture, Food and Forestry the situation that will pertain in 1996 in relation to a TB eradication programme. [2000/96]
Ceisteanna—Questions. Oral Answers. - Bovine TB Eradication Scheme.
Donal Moynihan
Ceist:41 Mr. Moynihan asked the Minister for Agriculture, Food and Forestry when he will bring forward his plans to reduce the administrative costs of the TB eradication scheme. [1876/96]
Michael Ahern
Ceist:58 Mr. M. Ahern asked the Minister for Agriculture, Food and Forestry the VAT implications, if any, for farmers of his proposed plan for TB eradication by way of vets fees. [1859/96]
Mary Harney
Ceist:66 Miss Harney asked the Minister for Agriculture, Food and Forestry the current position regarding the introduction of a new bovine TB eradication scheme; and if he will make a statement on the matter. [1847/96]
I propose to take Questions Nos. 25, 41, 58 and 66 together.
I am continuing to make significant progress towards the introduction of new arrangements for the disease eradication schemes from 1996 onwards. The new approach is designed to improve the effectiveness and reduce the cost of the schemes to both farmers and taxpayers. It results from intensive negotiations with the relevant organisations over the past four months. The general reaction to the proposals has been positive and all the farming and agricultural bodies have indicated that they will participate in the forum which I propose to establish. Prior to the establishment of the forum discussions are continuing, especially with the IVU.
The key features of the proposed new programme are: payment for annual herd testing will be devolved directly to farmers; a reduction of 65 per cent in farmer levies, from £28 million to £10 million per annum; pre-movement testing will be carried out on a voluntary basis, and there will be encouragement also for voluntary post movement testing; additional laboratory procedures and epidemiological considerations will facilitate the early removal of restrictions on some herds; and there will be improved quality control, increased epidemiology and an enhanced research programme, including tackling the spread of TB by wildlife.
Responsibility for payment for annual round testing will be devolved to farmers which means that a major portion of the cost of the scheme will in the future be removed from the taxpayer. In addition, the new procedures will enable me to reduce farmer levies from 1.3p per gallon to 0.5p per gallon for milk deliveries and from £7.30 per animal to £2.50 per animal for beef cattle. I intend to bring these measures before the Dáil shortly. This amounts to a reduction of £18 million per year in farmer contributions.
My Department will, as part of the new arrangements, continue to bear the costs of the administration of the scheme. The administration arrangements for the eradication schemes will be reviewed by independent consultants in the context of the strategic management initiative and the current overall reorganisation of my Department. Under Revenue Commissioners regulations, veterinary surgeons fees are liable for VAT at 12.5 per cent.
Will VAT be passed on to the farmer in terms of the fee he will pay the vet? An old man told me once that something is never a mistake if one does it twice, so why did the Minister disregard the IVU the second time after messing the matter up last May and walking away from the rotation question by coming up with this new scheme? Why did the Minister announce the scheme again prior to getting the full agreement of the IVU? Third, when will the Minister start the scheme and can he do so without the agreement of the IVU?
There is no change in the VAT arrangements. The Revenue Commissioners will operate that in the normal way.
Will the farmer have to pay the VAT?
There is no change. The same arrangements as applied previously with pre-movement testing which is private will also apply to the annual round testing. It is simply not the case that I disregarded the IVU. I intend to establish the TB forum and I intend to proceed with this scheme. I am not giving anyone — farming group, nor the IVU or otherwise — a right of veto, but in good faith and following discussions senior officials in my Department and I have had with the IVU, I have deferred for a few weeks the first meeting of the forum in an effort to bring the vets on board. The talks are proceeding and I am confident of a satisfactory outcome. This is the only way forward and there is no comparison between this and the unwinnable mess I inherited.
The Minister is not doing very well either.
We now have a radical new scheme that will mean better prospects for taxpayers, more controls for farmers and lower overall costs. The proposed start-up date is 1 April.
I welcome the belated admission by the Minister that his escapade during the summer of 1995 was an unwinnable mess. I am pleased he is more frank with Members of the House than he has been with people outside it.
His predecessor did nothing for three years.
The record will show that he regards that whole episode as an unwinnable mess. I agree that his carry-on had that result.
The Minister has stated that nobody will have a veto on the scheme. Had he not got the prior consent of the farming organisations would he be proceeding with the scheme? If that is not the case, will he confirm that the IVU was not on board when he announced the scheme at an IFA annual general meeting? This is similar to the carcase classification scheme in which even yet not everyone is participating.
In setting up any new scheme it is crucial to get the funders on board, those paying the levies — the farmers — and the Department of Finance. If a scheme does not have funding, it will not get off the ground. The role of the implementators of the scheme — in this case the veterinary surgeons — takes second place. Once I published the board proposals on 22 November I met members of the IVU and informed them that I would not procrastinate on the matter and that I needed a decision by Christmas. I extended the deadline to the new year and have now extended it further. I am not prepared to revert to the position of last year whereby in good faith the Minister of State, Deputy Deenihan, entered into talks with the IVU which became protracted.
The Minister took over the matter and made a mess of it. He would have been better off leaving it in the hands of the Minister of State.
I am not prepared to accept a position whereby, on the basis of a boycott or otherwise, a group decides that it alone should decide on the type of TB scheme that should operate. Deputy Cowen is aware that more than £1.5 billion of public funds has been spent in an attempt to eradicate TB and that many people have done well out of it. It is time the matter was resolved and these proposals provide a basis for competition in the veterinary sector, greater farmer control, less bureaucracy and more effective measures to deal with black spot areas. The scheme is cost effective and I look forward to farmers being notified of testing dates before 1 April.
How does the Minister propose to concentrate on black spot areas which have had a continuing high incidence of TB despite additional staff and funding? As a continuing high incidence of TB adversely affects co-operatives, stock and so on in those areas, a special effort should be made to assist them.
I am aware of the problem in County Monaghan, Deputy Crawford conveyed to me his serious concern about the matter. The new measures targeted at wildlife, such as the east Offaly project, should be extended to other parts of the country and, if appropriate, I would favour the extension of that project to the Monaghan area. It is also proposed to establish a mobile quality control unit to ensure that more rigorous testing is carried out in certain areas; such a unit could be established in Monaghan.
In regard to practical operational matters, the forum will allow farming organisations and, I hope, the veterinary surgeons to put forward their suggestions about the most useful way to proceed. This scheme is a partnership between all interested bodies and I will ensure that the problems in County Monaghan are at the top of the forum's agenda.
Does the Minister agree that since he took up office the incidence of TB has increased and that at this stage he cannot see the wood for the trees? In the past year a row has developed between him and the veterinary surgeons and, as it is a question of who will win, scant attention is given to reducing the incidence of tuberculosis.
The Minister stated that £1.5 billion has been spent on the scheme. In 1995 a sum of £62 million was spent on it and, as he stated, many people made plenty of money out of it. In 1995, £21 million was allocated for administration costs, the veterinary surgeons received £18 million, the farmers received £17 million and £0.5 million went on research. Does the Minister agree with those figures? Does he also agree that if a realistic attempt is to be made at reducing the high incidence of TB there must be a large increase in funding and activity under the research programme? A figure of £0.5 million for research in comparison with £21 million for administration purposes is unacceptable. Under the 1996 budget for TB eradication, how much funding will the scheme receive, what will be the division of spoils and how much will be available for research?
As the Deputy will be aware from political battles in Wexford, when I engage in a battle I do not propose losing.
This does not involve a five seater.
We will leave that to the people in Brussels to decide.
I am confident of winning this battle. The Deputy raised a genuine question about the level of administration costs. I am arranging to have an independent consultancy study carried out in that regard and if savings can be made, I will implement the necessary measures.
I will focus specifically on research under the scheme. It is hoped that a blood test, which will be more foolproof than the false negatives and false positives under the present system, can be developed. It is also hoped to develop a vaccine. There is no limit to the amount of money one could throw at such research. I will monitor procedures in New Zealand and European states in an effort to devise the necessary technological developments in this area. That is the ultimate way to eradicate TB. I am confident that such a blood test will be developed in the next three years. I support a specific scientific targeted approach to this matter.
In terms of funding for 1996, arrangements will be revised because the gross amount applied under the Appropriations-in-aid will change. Farmers' levies will be reduced and the Department will no longer have to pay £14 million for annual testing. A post-budget table setting out detailed figures will be published within a matter of weeks.
Does the fact that there will be pre-movement and post-movement testing of animals not prove that store producers will have to pay for herd testing on an annual basis which they did not have to do heretofore, and that this will cost smaller producers more than it did prior to this?
I do not accept that. I have arranged to give farmers a £10 million discount this year. Not only have I reduced the difference between the reduction in the levies and the cost of the testing by £4 million but I am paying for the two new plastic tags which will cost £2.5 million. I have arranged that the levies will only be paid into a compensation fund and, because this is a three-year scheme, there will be a ceiling on the amount paid. The detail of that is being finalised. It is an exceptional deal for farmers. There are farmers who have paid nothing, others who have paid something in terms of cattle fatteners, and dairy farmers who have borne the full burden to date. That is not equitable. Neither is this an issue between small and big farmers; it is a sectoral issue. What we are doing is bringing equity into the funding of it, but we are bringing in a huge discount factor and, for the first time, farmers and their organisations, as opposed to the public sector pay machinery, will be able in the long-term to dictate the level and cost of the scheme.
I want to question the Minister regarding the serious TB problem in Monaghan which has existed for some years. I appreciate that the Minister of State, Deputy Deenihan, met the personnel in Monaghan and has tried to alleviate some of the technical and structural problems. However, I want to further emphasise the serious situation regarding badgers, deer etc. I would like an assurance from the Minister that Monaghan will be specifically targeted in the context of badgers and deer. There is much anxiety among farmers, many of whom have lost their livelihoods and all prospect of a future. The wildlife issue in the Cavan-Monaghan region has to be taken seriously.
I will take note of what Deputy Crawford has said and will be attentive to the problems of County Monaghan. The incidence of TB there is not only high but persistently and stubbornly so and it requires targeted action. An extension of the east Offaly project is one of the options I will consider. The new activities of the quality control unit will be focused also on Monaghan. If the Deputy has any other suggestions for dealing with the problem I will be happy to give them due attention.
What I want to ask has been highlighted by Deputy Ellis in his question. The Minister indicates that this is not a problem between the small and the big and talks about the £10 million reduction given to farmers. Of course there is a reduction in the payment of levies, but the new aspect of this scheme is that the farmer pays direct. In his discussions with the Irish Veterinary Union, has the Minister been able to quantify the payments vets will be demanding from farmers in lieu of being paid through the levy system as heretofore? Does the Minister not feel that that aspect of the scheme might also be highlighted in the context of reducing costs? The Minister does not yet know what the cost will be. Does he intend to leave it to the free market to decide on the costs of these tests? How can he say that there is continuing equity in the market when in the previous scheme cross-subsidisation took place in favour of small producers? Does the Minister not believe that small producers should be assisted in this way, or is he suggesting that he will look after the larger producers by reducing their costs and leaving the smaller producers to their own devices?
Given the unrelenting support of Deputy Cowen for the IVU at all stages over the last 12 months, I will be interested to see which side he will take on the issue of fee levels. I want to see this taken out of the area of public sector pay machinery. It is not appropriate that special pay awards and other facets of the public sector pay machinery should be involved in what will now be private testing. I have every confidence that, given their ample national organisational strength, the farm organisations will be able to negotiate a scale of fees that will be acceptable to everybody. One would think we were introducing fee scales for private testing for the first time, but this is not new. All the pre-movement testing done heretofore was freely negotiated between veterinary surgeons and farmers. There were different bases for different herd sizes and different scales of fees. I am happy to leave it to the farm organisations and their veterinary representatives to resolve that issue.
Can the Minister indicate to the House the difference between the scale of fees the private sector would obtain in the marketplace and the fees charged by vets under the TB scheme which were reduced because of cash flow arrangements in the Department? Is the Minister suggesting that he is prepared to introduce a scheme without knowing what that factor is? In other words, will he leave it to individuals and have no input into deciding what would be an equitable price, particularly for small producers?
The Deputy is missing the point. We are moving towards market forces deciding this issue instead of the Department of Agriculture. One example of one of the effects is already happening in one county where, in anticipation of this scheme going ahead, two veterinary graduates are establishing new practices to specialise in testing. They will be very competitive on fees and, for the first time ever, farmers have the prospect of different vets queuing up at their doors looking for business——
The yellow-pack vets I predicted three months ago, testing only and doing no other veterinary work.
——as opposed to it being a State monolith creating a huge dependency by the veterinary practices on the State. This was not helpful to the development of clinical practices. It was a nettle that had to be grasped. I have not shirked the task and I have confidence that the younger and more progressive elements of the veterinary profession will relish this opportunity to compete.
May I ask one short final question?
We have expended 25 minutes on this question. I am calling Question No. 26 in the name of Deputy Hugh Byrne.