Dáil Éireann díospóireacht -
Wednesday, 29 Sep 1999

Vol. 508 No. 1

Adjournment Debate. - EU Payments.

Mr. Sheehan:

A Leas-Cheann Comhairle, I thank you for the opportunity to raise this important matter which is affecting a huge number of farmers. This is the second time this year that I have requested the Minister for Agriculture and Food to take immediate steps to refund 100 per cent compensation to the farmers concerned. In an Adjournment debate on 4 February 1999, the Minister replied to me as follows:

I am pleased to have this opportunity of . . . setting out the arrangements which were agreed at the EU Council of Agriculture Ministers meeting in December [1998] to compensate farmers for the reduction of approximately 5 per cent in certain direct payments which has resulted from the introduction of the euro on 1 January 1999 . . .

The green rates which applied to certain direct payments to farmers, that is, livestock premia, arable aid, farm retirement pensions, REPS payments and certain forestry payments, were frozen in 1995.

The Minister went on to state that:

. . . the agri-monetary arrangements for the introduction of the euro, which were agreed at the Council of Agriculture Ministers in December [1998], include compensation for such losses.

Compensation will be paid over the next three years. Full compensation, 100 per cent funded by the EU, will be provided in 1999. Two further annual tranches of compensation will be paid, each reduced vis-a-vis the level of the previous tranche by at least a third of the amount paid out in the first tranche; these will be funded equally by the EU and member states, with the member state's contribution being optional.

The Minister has failed to honour his promise. The Department, in a letter to a constituent in south-west Cork in September, admitted that the Minister did not apply, until March 1999 – four full weeks after I raised the matter here – to the EU for 100 per cent compensation to be paid to participants in the scheme of early retirement from farming.

I have the letter here. It states that:

The Minister for Agriculture and Food applied in March of this year to the EU for 100 per cent compensation to be paid to participants in the scheme of early retirement from farming. The early indications from the EU were that they would be in a position to pay the first amount of compensation in the middle of 1999 with a further payment at the end of the year. However, to date the EU have not confirmed details of compensation amounts to be paid to Irish farmers under the scheme. It is anticipated that details should be finalised in the next few months.

It is a pity the Minister for Agriculture and Food is not present to answer this. He deliberately misled the House and me in February 1999 when he said he had made an application for the refund of this compensation to the farmers. Yet, in a letter to a constituent, dated September 1999, the Minister stated he did not apply for it until a month after I raised the matter here. I urge the Minister to come into the House and put the record straight. I hope the Minister of State, Deputy Davern, can explain why it took four to five weeks, after I raised the matter here, for the Minister to ask the EU to refund the farmers concerned.

What other sector of the community would consent to a 5 per cent cut in their pensions on which they rely for a livelihood since giving up farming? No other sector in the community would accept a 5 per cent cut in REPS grants etc. I urge the Minister of State, Deputy Davern, to impress on his senior Minister, Deputy Walsh, the necessity to rectify this anomaly immediately and not to cod the Irish farmers.

Minister of State at the Department of Agriculture and Food (Mr. Davern):

I think it was after they read Der Spiegel that they took action immediately.

Mr. Sheehan:

He did not apply until March.

Mr. Davern:

Arrangements were agreed at the EU Council of Agriculture Ministers meeting in December 1998 to compensate farmers for the expected reduction in certain direct payments which would result from the introduction of the euro on 1 January 1999. In the event, that reduction proved to be 5.055 per cent.

It was agreed that compensation would be paid over three years. Full compensation, 100 per cent funded by the EU would be provided in respect of 1999 payments. Two further annual tranches of compensation would be paid, each reduced vis-a-vis the level of the previous tranche by at least a third of the amount paid out in the first tranche; these further annual tranches would be funded equally by the EU and the member state, with the member state's contribution being optional.

While these compensation arrangements were approved in principle in December 1998, Commission Regulation (EC) No. 755/1999 setting out the amounts of compensation for each member state concerned in respect of livestock premia, early retirement and rural environment protection measures was not adopted until April 1999. In accordance with the regulations, a formal application setting out details of the compensation required and the payment method proposed in each area concerned was submitted by my Department to the European Commission on 30 April 1999. Following correspondence and contacts with the Commission Services, a revised application for compensation was forwarded to the Commission on 23 September 1999. As the Commission is allowed a further period of two months to consider the revised application, approval for payment of the compensation is expected by the end of November at the latest. I will, however, be pressing the Commission for approval at an earlier date.

However, in the case of the rural environment protection scheme, with the exception of two of the supplementary measures, following consultations with the Commission, the full amount in Irish pounds hitherto payable can now be paid and this will be done in the next week or so.

Mr. Sheehan:

Why does he not pay the farming pensions as well?

Mr. Davern:

I am telling the Deputy what a good job the Minister, Deputy Walsh, is doing.

An Leas-Cheann Comhairle:

The Minister without interruption.

Mr. Davern:

The Deputy cannot attack the Minister of State, Deputy O'Keeffe at the same time. Arrangements will be made for payment of the compensation under the other schemes as soon as the Commission approval is received. However, the compensation in the case of the special beef premium will be paid with the final instalment of that premium and payment of the extensification premium will not arise until May-June 2000.

In relation to arable aid, Commission Regulation (EC) No. 1639/1999 setting out the detailed amounts of compensation for each member state was not adopted until 26 July 1999, as the amounts could not be calculated until the beginning of the marketing year, i.e. 1 July. The detailed proposals for disbursement of these amounts will be forwarded to the Commission shortly and approval is expected within two months thereafter.

The Minister, Deputy Walsh, is doing an exceptional job and I know that in his heart the Deputy appreciates it.