Billy Timmins
Ceist:88 Mr. Timmins asked the Minister for Agriculture and Food the process whereby a person can apply for a derogation under the proposed nitrates action programme; and if he will make a statement on the matter. [20271/04]
Priority Questions.
Nitrates Directive.
The implementation of the nitrates directive is, in the first instance, a matter for the Minister for the Environment, Heritage and Local Government. He and I met the farming organisations on 30 June and again outlined the approach to be taken in implementing the directive. An action programme will be submitted to the European Commission meeting Ireland's legal obligations under the directive and there will be proposals for arrangements under which farmers may operate above the general limit of 170 kg of organic nitrogen which the directive lays down.
A revised draft action programme is now being made available for farmers and other interested parties to offer their views. This document, like the earlier version published in December 2003, includes an outline of the proposed conditions under which farmers may obtain derogations from the limit of 170 kg. It will of course be open to the stakeholders to give their views on these conditions during the consultation process.
The conditions for derogations, like all other aspects of Ireland's plans to implement the directive, will ultimately require the approval of the European Commission. However, it is my objective, shared by the Minister for the Environment, Heritage and Local Government, to minimise the burden of compliance on farmers generally and to ensure that the future of the commercial agriculture sector is safeguarded.
While I recognise that this is, in the first instance, the responsibility of the Minister for the Environment, Heritage and Local Government, proposals were expected to be published by the end of June, prior to the second draft action programme being completed by the end of July. Will the Minister indicate when the proposals will be published? Evidence produced by Teagasc clearly indicates that a case can be made for 250 kg of organic nitrogen per hectare. We should return to the Commission to consider whether a 170 kg approach to the whole country is essential. Perhaps there is room for manoeuvre based on scientific evidence with which we could go for a 210 kg approach.
How will individual derogations be applied for? Will individual farmers have to prepare a plan and make an application for a derogation? Assuming a whole country approach and that Ireland achieves certain derogations, where will the single farm payment stand next January in view of the fact that our action programme may not be accepted with the derogations included? My understanding is that nothing will be accepted from Ireland until everything is accepted.
The Minister for the Environment, Heritage and Local Government and I, our senior officials and representatives of Teagasc met the stakeholders last week. It was a positive and constructive meeting at which the Government side put forward its position. This is that, legally, because of European Court rulings, we must address the directive, which lays down a general limit of 170 kg. However, parallel to submitting an action plan to address the directive, we will submit a case for a derogation to have limits up to 250 kg of organic nitrogen per hectare. Teagasc, as the chief scientific advisory body to the Government, has been extremely helpful in putting together documentation and a comprehensive case. I believe we will be successful in this matter. We need to be because approximately 10,000 of our most intensive and commercial farmers would be considerably impeded if we did not get a derogation of up to 250 kg.
With regard to the sequence and timescale, publication of the current draft should be with the farming organisations and stakeholders within the next day or so, perhaps later this evening. They will consider it and give their views. An independent adviser, Mr. Denis Brosnan, will help to facilitate consensus so that we can then submit that action plan to Brussels, hopefully, by the end of this month. Parallel to this, we will seek a derogation. We will have considerably more time to make the case for a derogation — I would expect six or seven months. The Commission has told us that once we are serious about addressing this directive, which has been in place since 1991, it will deal sympathetically with us. I do not envisage any penalty or fines in regard to the implementation of the single farm payment from 1 January next.
Will the Minister indicate how the derogation will be applied for? Must individual farmers make applications?
That is subject to negotiations. We have a good track record in negotiations and generally good relations with the Commission. As with decoupling and the farm payment on which we were able to fine tune the regulations and schemes to suit Irish conditions, we can do the same in this regard. It has been intimated to us that the Commission will work with us to get a workable solution to the matter with minimal encumbrances and minimal red tape and bureaucracy. It should be noted that the directive applies not only to organic nitrogen per hectare but also to a range of matters such as the times for the spreading of nitrogen and storage capacity. All such matters will be subject to negotiations and I believe we will achieve a deal which will suit Ireland and Irish commercial farmers in the long run.
Food Labelling.
Mary Upton
Ceist:89 Dr. Upton asked the Minister for Agriculture and Food when he expects country of origin labelling to be introduced for the catering trade for beef; his plans to introduce similar labelling requirements for other meat products; and if he will make a statement on the matter. [20273/04]
I recently announced my intention to proceed with a legal requirement on the restaurant and catering sector to display country of origin in respect of beef served on their premises. This measure will come into effect once the necessary control and implementation arrangements are in place. I made arrangements for this matter to be discussed in the Council of Agriculture Ministers during the Irish Presidency as it is my view that there is a gap in the overall beef labelling regulations that ought to be filled. This was also the view of the food labelling group which I established to examine the whole area of food labelling and the Department's consumer liaison panel.
In the Council discussions, there was little willingness on the part of the European Commission or other member states to extend the scope of the EU regulations to address this issue. However, the Commission confirmed that member states may adopt national compulsory measures under the labelling directive. I have formally notified the Commission of my intention to proceed in this area and my Department is making the necessary arrangements for the early introduction of this measure. When I have evaluated its effect, I will consider the question of extending the scope of the regulations to other products. The general labelling requirements set out in EU and national law apply to all food products sold at retail level.
I thank the Minister for his reply and welcome his decision to introduce country of origin labelling for beef. Will the Minister indicate what he means by early introduction and what timeframe he envisages? More importantly, why is beef set aside as one type of meat for which we have this regulation whereas other meat products are not treated in the same way?
Ireland is particularly advanced in regard to labelling and considerable progress has been made in including accurate, concise and precise information on labels for the general benefit of the consumer. With regard to extending the scope of the present EU directive to restaurants, I sought consensus from colleagues in other member states and the Commission. Regrettably, they did not see the value of this. However, I expect I will be able, in the next few months, to go ahead with this extension of the directive on the labelling of beef in restaurants and the catering sector.
We are obliged to officially notify the Commission and did so on Monday, 20 June last. The detailed examination of that notification by the Commission will be complete by 27 September. At that stage, I can sign the statutory instrument bringing it into effect. In the meantime, I will consult the Restaurants Association of Ireland and the various interested groups to make sure they have the wherewithal to implement this regulation and are in a position to put the country of origin on menus. I will also have to talk with the Food Safety Authority because it will be responsible for control, inspection and so forth. Even if the next couple of months are holiday months, I expect to get this up and running by September.
The second part of my question is, perhaps, even more significant. I accept that the legislation will be implemented with regard to beef. However, there are serious inadequacies with regard to pork and bacon, in particular, and the consumer is being duped. One hears statements that include phrases such as "substantially transform" and "unless it misleads the consumer to a material degree" but none of these is defined. I cannot see what is the difficulty. If the legislation can be introduced with regard to beef, why can the same legislation not be introduced with regard to poultry, which generated a knee-jerk reaction last year following the outbreak of avian flu, and pork and bacon?
I concur with the sentiments expressed by Deputy Upton. She has been to the forefront in seeking the maximum information for consumers. I introduced a number of measures to ensure that customers are given such information in terms of labelling and with regard to traceability generally. That applies as far as retail level. It is only relatively recently that the inclusion of a country of origin designation on menus and in the catering sector has arisen. I am introducing this for beef in the first instance but I give a commitment that, once the teething problems with this are out of the way and the Food Safety Authority has a control mechanism and structures in place, I will follow it through for the other food products, namely, poultry and pork.
Farm Household Incomes.
Martin Ferris
Ceist:90 Mr. Ferris asked the Minister for Agriculture and Food if he will make a statement on the impact of rising input prices, particularly fuel and energy costs, on farm incomes. [20550/04]
The cost of fuel and energy is an issue for all parts of the economy, not just the farming sector. Nevertheless, it is an issue of particular concern as I am conscious of its possible implications for the agriculture sector. In this regard, under this Government inflation and interest rates have been maintained at historically low levels.
The recent increase in fuel prices contributed toward the recent marginal increase in inflation. Fuel and lubricants, which include petrol, diesel and motor oil, account for approximately 3% of the total basket of goods used in the compilation of the consumer price index. The ESRI, in its recent summer bulletin, has indicated that there are several other issues at work in the general economy, such as exchange rate changes, which are also affecting inflation.
The CSO publishes the output, input and income in agriculture at an aggregate level on an annual basis. The 2003 results have been recently released. The CSO revised the methodology in the 2003 report and this resulted in the value of energy and lubricant inputs decreasing from the previous value of €301 million to €222 million in 2002 and from €317 million to €228 million in 2003. These results show that spending on energy and lubricants increased by 2.9% in 2003 following a decrease of 8.8% in 2002. The spending on energy and lubricants of €228 million in 2003 constitutes 10.5% of operating surplus or farm income. This proportion is unchanged from 2002 and slightly down from the value of 10.7% in 2001.
Average farm incomes are contained in the national farm survey produced by Teagasc. This is an in-depth survey, which measures farm incomes across the main farming systems on an annual basis. In 2002, the latest year in which data are available, 1,176 farms were surveyed, representing 116,400 farms. The survey found that in 2002, overall direct costs or inputs increased by 5% on all systems. The average farm income calculated on this basis for full-time farmers is €27,758 in 2002 and is not affected by the CSO aggregate changes.
Additional information not given on the floor of the House
The Central Statistics Office measures the changes in agricultural inputs in the agricultural input price index on a monthly basis. The costs of all agricultural inputs as measured by this index increased by 2.5% during 2003. The latest available data for April 2004 show that input prices have increased by 3.7% over April 2003. During 2003, all energy costs increased by 5.9% while fuel costs have increased by 4.6%. However, fuel cost increases are below that of the total input increases from 2000 to present and stand at 4.4% compared to the total increase for all inputs of 8.8%.
The fact that input prices tend to rise annually underlines the importance of ensuring that all inputs are used efficiently. It is important that all types of farms pay attention to the issue of productivity. It is also important to note that the figures I have cited tend to be averages over a large sector. While many farms are operating at an impressive level of efficiency, there are many others where there is considerable room for improved productivity and efficiency. When we move to the new single farm payment the increased focus on market returns will underline these facts and will increase the focus on efficient use of inputs. It will be increasingly obvious that wasteful use of resources is not an option.
Fuel diesel now costs 50% more than it cost in 1995 and overall energy costs are 43% greater. Nine months ago, a farmer or fisherman who depended on fuel to do his or her work paid 34 cent per litre; the price is now 42 cent per litre. In the past nine years there has been a decline of 25% in farm incomes and, at present, the farming sector owes approximately €1.1 billion, which is 40% of farm income. At the same time, the retail sector is charging more. Take the example of apple producers. In nine years, the price has fallen by €100 per tonne, yet the retail sector continues inflating its prices and passing that on to the consumer even though the producer is earning less.
Does the Minister agree that farmers are paying a price for the fact that large multiple retailers can dictate prices to the disadvantage of farmers? Does he agree that the Department and, perhaps, the Competition Authority should investigate this?
General costs continue to increase and that is the case with regard to input costs for farmers, as I outlined earlier. However, the fact that inflation and interest rates are at low single figures is vital for farmers. Some of us remember when inflation and interest rates during the late 1980s were more than 20%. That was a far more serious problem for farmers. With regard to the multiple retailers, it is a problem that there are now three or four major multiples in this country that dictate, to a large degree, the margins for individual producers at farm level. Thankfully, however, there are some retailers still based in country towns who take produce from local suppliers so there is a degree of competition. Some of the new member states of the European Union, however, did not have that structure under the old communist regime so they are in a difficult situation. There were no shops in rural towns as the economy was centrally structured.
The farming organisations and stakeholders are conscious of this problem. There was what was called the "trolleycade" earlier this year to insist on reasonable margins in, for example, the liquid milk sector. There will continue to be such campaigns. The Competition Authority is keeping an eye on this, as it should. The primary producers are entitled to a fair income and a reasonable margin but they are getting the least of the price for any product or range of products at present, and that is not how it should be.
Single Payment Scheme.
Tom Hayes
Ceist:91 Mr. Hayes asked the Minister for Agriculture and Food his plans to simplify on-farm inspections. [20272/04]
I am conscious of the need to simplify the on-farm checks to the greatest extent possible consistent with a system that will be acceptable to the European Commission. In this context, consultation will take place with all interested parties before 1 January 2005. In addition, it is my intention that individual farmers will be informed about the minimum standards that they will be expected to meet under the various directives, including the requirement to keep land in good agricultural and environmental condition.
Under EU regulations governing the single payment scheme, farmers are obliged to observe good farming practice and environmental conditions. A single inspection will replace the multiplicity of inspections to check compliance with the various premium schemes currently in place, such as suckler cow, special beef, ewe premium and so forth. A minimum of 5% of farmers will be subject to on-farm checks for the eligibility of the land declared. The inspection approach in these checks will be similar to the annual area aid inspections carried out up to now and some of these checks will be carried out by way of remote sensing.
Farmers in receipt of the single payment scheme are also obliged to comply with the statutory management requirements in environment, identification and registration of animals, public, animal and plant health and animal welfare. It will be necessary to inspect 1% of farmers for compliance with statutory management requirements, with the exception of identification and registration of animals where 5% of applicants must be inspected.
I thank the Minister for his detailed response which I welcome. Farmers and farmers' organisations will also welcome his response. There is major concern among the farming community regarding the amount of red tape. One of the reasons farmers supported the Fischler proposals was that they believed they would cut through the red tape and allow them to farm as they were trained to do rather than wasting time getting tied up in inspections, cross-checking, double-checking and so on.
What organisations will the Minister consult? Will he consult the ICSA as well as the IFA and the ICMSA? The ICSA was the first organisation to come out in support of a once-off yearly payment. Will the Minister consult everybody in the process he is about to undertake?
The answer to the latter part of the Deputy's question is "Yes". I will consult the general farming organisations, including the ICSA. It is my intention to introduce an inspection system which will meet the obligations of audit, accountancy and value for money. There will be a single yearly farm payment of the order of €1.7 billion. We must ensure value for money and payments must meet the requirements of the various schemes. At the same time, it must be user-friendly and should not terrorise farmers because of undue bureaucracy in delivering schemes. I would also like to see a few days' notice being given. Many farmers have off-farm jobs and a few days' notice would facilitate them in preparing for the visit of the inspector while adhering to the spirit of the scheme.
I am examining these issues intensively. As the Deputy rightly said, farmers opted in large numbers for a single farm payment and full decoupling. However, the main reason for doing so was to move away from red tape and bureaucracy. If that is not achieved, we will have let the farmers down.
I agree wholeheartedly with the Minister. Is there an appeals mechanism available to farmers if their figures are found not to be correct? Are there any proposals to simplify procedures or allow farmers to use an intermediary to help them? These payments will be important to people to enable them to make payments to financial institutions and other agencies. There is much concern among farmers, bank managers and so on that the payment might not come through in the event of a mix-up. Is there any user-friendly way in which decisions can be appealed?
Penalties will be proportionate to the scheme involved. In the context of livestock schemes, cattle may lose one ear tag, and sometimes a second one, through nobody's fault. If that were to happen and there is subsequently an on-the-spot inspection, it would be unfair to reduce the farmer's payment and put him through the full rigours of an appeal system. There must be fairness and proportion in operating the system. A year or so ago, as a result of demands from this House and elsewhere, we set up an appeals system in Port Laoise. I accepted amendments from all sides of the House to provide that farmers would be entitled to an oral hearing and could be accompanied by their Teagasc adviser or another adviser. That appeals system is independent, unlike the old system under which a farmer could be turned down by a local officer and the appeal was to his senior officer and had similar results. A total of 38% of appeals in 2003 were successful. That is what I want to see. I want the system to operate with the minimum of problems for farmers.
World Trade Negotiations.
Liam Twomey
Ceist:92 Dr. Twomey asked the Minister for Agriculture and Food the position regarding discussions with the United States Department of Agriculture and the US Minister for Agriculture on all agricultural products that may be subjected to tariffs and imposed by the US Government; and if progress was made by the EU-US summit. [20579/04]
The application of tariffs is governed by the World Trade Organisation rules. I assume, therefore, that the Deputy is referring to the ongoing negotiations on the next WTO agreement under the Doha development agenda in which the European Commission negotiates on behalf of the EU on the basis of a mandate agreed by the Council of Ministers. The position is that the negotiations are proceeding in Geneva with a view to reaching agreement on a framework for modalities, or the broad general outline of a new WTO agreement, by the end of July. Negotiations on the details of a new agreement would follow any agreement on the framework and these further negotiations are likely to continue for several months and probably into 2005.
The EU-US declaration on strengthening our economic partnership, which was agreed at the recent EU-US Summit, commits both sides to advancing multilateral trade liberalisation, to strengthening the rules embodied in the WTO Doha development agenda negotiations and to co-operating to reach a successful conclusion to the negotiations as soon as possible. The declaration also committed the EU and US to consider how the existing strong economic ties might be enhanced and agreed that senior officials from the EU and US would be asked to explore means to eliminate trade, regulatory and investment impediments to further economic integration.
I thank the Minister for his reply. This question arose from discussions we had with a congressional delegation in Leinster House last week. Members of the delegation were divided in their views on the Iraq war but were unanimous regarding the new legislation going through Congress imposing tariffs on agricultural products, especially casein and dairy products. It appears there is growing support within the US Congress for the proposal to impose tariffs on agricultural produce. Has the Minister had any discussions with the US Department of Agriculture on this issue? Does he see these tariffs having any effect on Irish agriculture? Does he believe there is a potential threat of an agricultural trade war with the US if support for such legislation gathers momentum within the US House of Representatives and a majority of congressmen approve the legislation?
Irish exports to the United States, half of which are alcohol-based drinks, are valued at €400 million. Is there ongoing review of our marketing of agricultural products in the US? The implementation of the US Bioterrorism Act of 2002 seeks more information, which will involve more paperwork and bureaucracy, from people exporting to the United States. Does the Minister believe this could have ongoing effects on Irish as well as EU exports?
I agree that this is important to Ireland. We have substantial exports, especially of dairy products, to the US which are valued at approximately €400 million. I have periodic contact and negotiations with senior US officials up to secretary of state level regarding those exports. In recent years we have smoothed difficulties that have arisen periodically. Nonetheless, in the overall context, the US is becoming more parochial and nationalistic regarding protecting their own industry.
I am watching that matter very closely, not least because the Irish dairy industry is very broadly based. There is hardly any county or corner of the country without a milk plant or facility, or dairy farmers. In west Cork in particular, in Ballineen, there is an outstanding and sophisticated milk processing plant that exports a substantial part of its output to the United States. I am watching and monitoring this closely, and it is a matter of some anxiety. However, the relations we have built up have stood us in good stead. We have been able to iron out our difficulties up to now, and I hope and expect that to continue.