Dáil Éireann díospóireacht -
Wednesday, 9 Oct 1996

Vol. 469 No. 6

Adjournment Debate. - Dairy Hygiene Grant Scheme.

Mr. Kirk

I thank the Ceann Comhairle for the opportunity to deal briefly with this important issue. On Friday evening last without any forewarning, the Minister for Agriculture, Food and Forestry terminated the dairy hygiene grant scheme. This scheme was introduced in recent years to progress the implementation of EU regulations on dairy hygiene. It was a valued scheme and many farmers I know have applied for it.

Because of the structure within the dairy industry of large, medium and smaller producers, the capital cost involved in the necessary upgrading of facilities is expensive. Expense will vary from farm to farm depending on the existing state of the premises. The ministerial decision to terminate the scheme has come as a shock to the industry at a time when, according to Teagasc's Today's Farm, it is clear that production costs for milk have risen sharply in the past 12 months. The suspension of this scheme is a further shock to an ill prepared sector. It comes in the wake of a recent ministerial suggestion that the number of full-time farmers in the country by the year 2000 will drop to about 60,000 from a present level of probably double that figure. There are clear implications in this and it borders on the abandonment of many of our small and medium sized farmers. I ask the Minister of State to consider the immediate possibility of restoring the scheme.

Dr. O'Hanlon

I thank the Ceann Comhairle for allowing us to raise this important issue on the Adjournment. I support all the points raised by Deputy Kirk. This scheme was an important scheme, particularly for small farmers. Everyone accepts we have to continue improving the standard of our milk. The EU wants us to do that and I have no doubt the dairies will continue wanting us to do so.

These grants help small farmers to provide proper buildings and milking and cooling equipment. It is serious to suspend the scheme without any prior notice, particularly before all the farmers who wanted to avail of the scheme had an opportunity to do so. This is a fundamental issue in my constituency of Cavan-Monaghan where there are many small farmers dependent on dairying to rear their families. What does the Minister intend to do about applications not yet processed and work that is only partially completed? What advice has he for farmers where the dairies will insist on a higher standard of milk on foot of EU recommendations?

Deputy Kirk referred to the Minister's comment last week about the number of farmers being reduced to 60,000. Deputy Ned O'Keeffe referred to the Minister as the Mansholt of Ireland. That can rightly be applied to him and not alone with regard to this issue. Last week in the Dáil he told us we are responsible for the surplus of beef in Europe. It is not acceptable for the Minister who is President of the Council of Ministers in Europe to make a statement like that when small farmers are so dependent on beef and milk production for their livelihood. The surplus comes from the big factory farms in Europe, not from this country.

The Minister has discontinued the control of farmyard pollution scheme and the farm improvement scheme since he came into office. He has not dealt effectively with BSE. Deputy O'Keeffe's remark was appropriate on this occasion. I am particularly concerned about the abolition of the dairy hygiene scheme and I appeal to the Minister of State, Deputy Deenihan, who is a reasonable man, to use his weight and ask the Minister to ensure this scheme is restored until such time as the farmers who want to avail of it have an opportunity to do so.

Minister of State at the Department of Agriculture, Food and Forestry (Mr. Deenihan)

I thank the Deputies for raising this matter. Under the on-farm investment section of the Operational Programme for Agriculture, Rural Development and Forestry, an allocation of £195 million in Structural Funds was provided for the period 1994-99. It had been anticipated in the national plan published by the previous Government that £245 million would be allocated. There was, therefore, underfunding of at least £50 million for on-farm investment schemes.

The scheme of grant aid for investments in upgrading of on-farm dairying facilities had been introduced in September 1994 as part of the operational programme with the objective of assisting dairy farmers in meeting the costs of achieving structural standards required under EU Directive 92/96 EEC. That underfunding is the main reason it was necessary to suspend the operation of the scheme last week.

Since the launch of the scheme until its suspension about 7,800 applications were received. By 4 October about 5,300 of the applications received had been fully processed and some 4,800 have been approved to commence work. This represents a grant commitment of about £25 million. To date £6 million has been paid to some 1,100 applicants who have completed works to the Department's specifications. The remaining 2,500 applications will be processed and approvals issued as soon as possible. Payment of grants in respect of other approvals will be made following completion of validation of the approved works.

I am concerned about the impact the suspension of the scheme will have on my efforts to improve the overall hygiene standards in the dairy sector. Should additional funds become available as a result of the mid term review of Structural Funds, consideration will be given to reintroduction of the scheme in a modified form.

I remind the Deputies that before we came into office in December 1994, the Minister for Agriculture, Food and Forestry, Deputy Joe Walsh, had to suspend the farm improvement programme because it had run out of funds. To suspend a scheme is nothing new. However, because of milk hygiene regulations this area needs this type of investment to keep as many dairy farmers as possible on the land and in production. I am sure that it will be one of the priorities when the review of funds comes up for consideration in 1997. I will convey the Deputies' concern to the Minister.

The Dáil adjourned at 9.45 p.m. until 10.30 a.m. on Thursday, 10 October 1996.