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Dáil Éireann díospóireacht -
Thursday, 15 Oct 2009

Vol. 692 No. 1

Priority Questions.

Rural Environment Protection Scheme.

Michael Creed

Ceist:

1 Deputy Michael Creed asked the Minister for Agriculture, Fisheries and Food the number of farmers participating in the rural environment protection scheme on the date the scheme was suspended; the number of farmers whose REP scheme plans have since expired; the number expected to expire by the end of 2009 and 2010; if his attention has been drawn to the impact that this decision is having on individual farm families at a time when farm incomes and commodity prices are in free-fall; if he will review this decision and honour the programme for Government commitments of 70,000 farmers in the REP scheme; and if he will make a statement on the matter. [36516/09]

On 9 July 2009, when I announced the closure of REPS to new applications, there were 55,630 farmers in the scheme. These included 12,575 who had applied for REPS 4 in 2008. In addition, the Department had received a further 16,718 applications before the 2009 closing date of 15 May, and these are currently being processed for entry into the scheme.

Since 9 July, 4,639 farmers have completed their contracts in REPS. Another 5,704 will have finished by 31 December 2009. All of these would have had an opportunity to apply for REPS by this year's closing date of 15 May to ensure that they could continue in the scheme. By 31 December 2010, a further 9,698 will have completed their contracts in REPS.

REPS 4 was closed to new applicants in July against the background of the situation in the public finances, the resources available to the Department and the substantial increase, over the past year, in the number of REPS participants. As indicated, almost 17,000 applications were received up to the closing date of 15 May for the 2009 scheme, and further applications which were received up to the time of closure will be processed as applications for 2010. Payments due to REPS farmers for 2009 will be the highest ever and all participants already in REPS will continue to receive annual payments until their current contracts run their course. The number of farmers in REPS is more than enough to ensure that all EU co-funding negotiated in the current rural development plan will be drawn down.

I plan to introduce a new agri-environment scheme in 2010 which will reduce compliance costs to participants and which will provide a menu of targeted actions from which farmers may choose. Funding for the new scheme will include the additional modulation funds which I ensured will be retained for the benefit of Irish farmers in the negotiations on what may be termed the CAP health check. It will also include additional Exchequer funding. In August 2009, I invited submissions on the proposed new scheme. The details of the scheme are in the process of being finalised. It will require the approval of the European Commission, which has already received an outline of our proposals.

I am acutely aware of the current difficult situation with regard to farm incomes and of the intense pressure on many farm families. Yesterday, I announced the commencement of advance payments of 70% of single farm payments amounting to in excess of €800 million which will begin in the coming days. This is the first time that an advance of this magnitude has been paid at this early stage of the year; the official opening date for release of single farm payments is 1 December in each year. Furthermore, the payment of €220 million under the disadvantaged area scheme commenced last month. The combination of these two schemes together with payments under REPS and the suckler cow scheme amounts to payments of more than €1.8 billion to Irish farmers during 2009 and represents substantial and necessary support for farm incomes. I have also been working closely with like-minded ministerial colleagues in other member states to ensure the deployment of the full range of the EU market support instruments to support the dairy sector which has been undergoing a particularly difficult time.

Additional information not given on the floor of the House.

In addition, more than €300 million in investment support will be paid in the agri-food and fisheries sectors and almost €120 million in supports for the forestry and bio-energy sectors this year. My Department also supports investment in research and development in the agri-sector, the provision of investment support for the processing sectors, the protection of Irish farms from animal and plant diseases. I remain committed to providing the highest possible level of support for farm incomes and the agri-food sector.

I thank the Minister for his reply and I implore him to step back, even at this late stage, from this madness and economic folly by the Government. What the Minister will save will be spent by the Minister for Social and Family Affairs on an increased number of farm assist payments.

Rounded up, the figures given by the Minister suggest that by the end of 2010, approximately 20,000 less than the current total of 62,000 will be in REPS. This will cause phenomenal hardship to farm families. The Minister is aware that the Teagasc farm survey for 2008 and the anticipated results of a survey for 2009 will show income reductions of the magnitude of 30% to 35%. No other sector in the economy is suffering this type of income collapse. REPS puts bread and butter on the table for many farmers and it is collateral for bank loans.

I remind the Minister of a commitment in the programme for Government — although I appreciate that it is a work of fiction — to have participation rates of 70,000. However, he stated that by the end of 2010 it will be reduced to 42,000. Will the Minister step back from this folly? It is not too late to change his mind, admit he made a mistake and reopen REPS 4 for those ending their participation in REPS 2 or REPS 3 to maintain the participation levels at 62,000.

I understand it is easy to take from the figures I gave that 10,000 will exit the scheme each year. That is not correct. There will be almost 63,000 participating in the scheme this year. The number of people who may potentially exit the scheme next year will be less than 10,000. I can provide the Deputy with the figures afterwards but I want to be clear about this to the House. In excess of 1,500 applications were received subsequent to 15 May and prior to 9 July and the REPS 4 plans of these people will begin in 2010.

We will have 63,000 participants this year and next year we will have somewhat less. However, we will introduce a new agri-environment measure and the priority category for this new scheme will be those who have exited REPS 3. The level of funding available for the scheme has not yet been determined. What has been determined is that all the modulation funds and the European economic recovery programme available to the Department has been ring-fenced in its entirety for this agri-environment measure. The supplementing and Exchequer funding that will be provided for the scheme will not be determined until the Estimates budgetary process for 2010 is complete. This year, we have almost 63,000 participants in REPS, last year it was 46,000 and 17,000 new applicants entered the scheme prior to the 15 May deadline. This is by far the highest ever level of new applicants.

Does the Minister accept that a knock-on effect of his decision will be to force more farmers onto farm assist? On the basis that REPS is 45% co-financed by Europe this is a false economy as the State pays 100% of farm assist payments.

Did the Minister read the full McCarthy report prior to glancing at that initial recommendation of suspending access to REPS 4? It stated that a full value for money audit of the scheme should be conducted. The Minister of State, Deputy Sargent, who is sitting beside the Minister is a member of the Green Party, which is the great champion of the environment. There have been and continue to be huge benefits to the agri-environment as a result of REPS. The scheme which is proposed to replace it is a Mickey Mouse scheme that will do nothing for the environment or for farm incomes. I implore the Minister even at this late stage to withdraw his revised rural development plan programme in Europe and return to full access to REPS 4.

Deputy Creed would rightly be complaining at Question Time if we did not send a revised rural development plan to Brussels by 15 July. That was to draw down modulated funds and unused funds that had become available to us for the first time. We do not leave one cent in Europe, we draw down every single cent. Our rural development plan consists more of Exchequer funding than European funding. Of course in the context of deciding what level of funding will be available for REPS from the Exchequer, analysis will be done on people's income and on those who will exit the scheme and may have to rely on farm assist payments. We are conscious of this.

I want to be very clear on the following point. We had to make a decision to send a revised rural development plan to Brussels by 15 July. The McCarthy report had no bearing whatsoever on decisions we made on REPS. I did not see it until it was published.

The Department had an input into it. It made recommendations.

That input was that we would rationalise a number of regional offices throughout the country, cut back on administration and create greater efficiencies to provide a better service for the farmers of the country. We are implementing that. It was one of the major recommendations.

The best service for farmers is REPS 4.

I agree REPS 4 is a great scheme. It must be remembered it was implemented and is paid for by the Government.

It is paid for by Europe.

I have called the Minister on Question No. 2.

No, that is not the case. Over 50% of it is paid for by the Exchequer.

Sean Sherlock

Ceist:

2 Deputy Seán Sherlock asked the Minister for Agriculture, Fisheries and Food the status of the REP scheme; the date of payment for REP scheme 4 in 2009; if sufficient funding is available to meet REP scheme 3 and 4 payments in 2009; the breakdown of the number of farmers in the REP scheme; and the persons who applied for the REP scheme in 2009 by county. [36202/09]

REPS 4 was closed to new applicants in July against the background of the situation in the public finances, the resources available to the Department and the substantial increase in the past year in the number of REPS participants. Almost 17,000 applications were received up to the closing date of 15 May for 2009. Further applications which were received up to the time of closure will be processed as applications for 2010. Payments due to REPS farmers for 2009 will be the highest ever and all participants already in REPS will continue to receive annual payments until their current contracts run their course.

I plan to introduce a new agri-environment scheme in 2010 which will reduce compliance costs to participants and provide a menu of targeted actions from which farmers may choose. Funding for the new scheme will include the additional modulation funds which I ensured would be retained for the benefit of Irish farmers in the negotiations on the Common Agricultural Policy health check. It will also include additional matching Exchequer funding. The scheme's details are being finalised and will require the approval of the European Commission, which has already received an outline of our proposals.

Just under 51,000 farmers are in REPS. In addition, the Department is processing 16,718 applications received for REPS 4 in 2009 up to the closing date of 15 May. I will forward Deputy Sherlock a breakdown of these applications by county. A further 1,509 applications were received after this date and before the scheme closed to new applicants on 9 July. If they meet the scheme's requirements, this group of applicants will start their contracts in 2010.

As a measure approved as part of the current rural development programme, REPS 4 is subject to EU regulations which require detailed administrative checks on all applications, including plan checks, to be completed before the first 2009 payments issue. My officials are working on the processing of applications with a view to facilitating the release of payments at the earliest possible date.

If the original REPS plan was an agri-environment measure, why is it necessary to do away with the scheme and reintroduce an agri-environment measure which will have the same aims? Why did the Minister not refer to biodiversity? It will be argued the scheme was used as a supplementary income measure in some cases. The scheme's closure will result in more applicants for farm assist, which is already happening in some areas. Considering the biodiversity measures already contained under the existing scheme and its success, it seems illogical that a new scheme needs to be introduced when the old scheme could be continued.

No one's income from REPS has been affected by the decisions announced in July. This relates to 2010 and people exiting the scheme in 2009. The highest level of payment under the scheme will be this year.

All Members will have received representations from individual farmers about the thorough, detailed and demanding inspection process to ensure that the applicant meets the scheme's criteria and standards. One benefit of the new scheme will be that farmers will not need to put in a whole-farm plan. Many farmers had to pay out €1,500 to put in a particular plan but this money can now be saved. The whole-farm undertaking has been a demanding process both for the farmer complying with every single criteria and the Department as the paying agency to ensure that it does not run foul of any Commission audits.

We want to introduce a good agri-environment measure to succeed REPS 3 for those who will exit it and be the priority category. People will be able to choose from a large number of measures.

Will the new scheme — we can call it the agri-environment measure for the time being — be administered by the Department of Agriculture, Fisheries and Food? What was the average pay out to farmers under REPS?

The average pay out was €6,200. In the part of the province of Ulster which does not come under our jurisdiction, the average pay out was €1,390 per farmer. Our scheme has been beneficial and, as the Deputy rightly pointed out, it is not just an income support. There are costs to the individual farmer arising from participating in the scheme. There are also benefits for the public good as well as the individual farmer. As Deputies Creed and Sherlock said, the scheme has brought good environmental benefits to the countryside. The farming community is the guardian of our countryside. Participation in REPS has offered a whole new approach to the protection, nurturing and cultivation of our environment. The new agri-environment measures that will be introduced will help that work considerably.

I appreciate the importance of REPS as an income to the farming community. It was not, however, a direct payment as substantial costs were incurred by every participant in the scheme to ensure that their farming practices were up to standard. The Department of Agriculture, Fisheries and Food will administer the new scheme.

Beef Exports.

Michael Creed

Ceist:

3 Deputy Michael Creed asked the Minister for Agriculture, Fisheries and Food the initiatives he plans to introduce to deal with the income collapse of beef farmers in view of the collapse in the price of store and finished beef cattle; his plans to assist with live exports of cattle to the UK; and if he will make a statement on the matter. [36517/09]

The value of Irish beef exports in 2008 reached almost €1.7 billion and accounted for almost one fifth of total Irish agrifood exports. The beef industry remains very important in our international trade balance, but also to the rural economy as its contribution is widely dispersed.

Notwithstanding this, and in common with many other sectors of the economy, beef is experiencing difficult times. As consumers and economies have come under pressure, there has been a noticeable shift in spending patterns with a discernible move towards cheaper meats and lower value cuts. This is evident in all of our key markets and is consequently impacting on producer returns. In addition, the strengthening of the euro against sterling presents another challenge to beef exporters, given the importance of the British market.

In 2008, average prices in all beef categories increased significantly, in some cases by almost 20%, and reached record levels. Given that prices are a function of the returns available in the marketplace, the lower prices experienced during 2009, while unwelcome, are not entirely unexpected. The decline in prices to date in 2009 is around 12%. However, prices still remain significantly ahead of both medium and long-term averages for all categories. I am aware of the difficulties falling prices present to both producers and processors alike. The Department and relevant agencies are taking several appropriate steps to address these.

While conditions remain challenging in both our domestic and international markets, our beef exports have remained remarkably resilient. Shipments to both Britain and our main continental markets have held up very well with Bord Bia reporting only slight declines in the year to date. Producers and processors have responded to the changing marketplace and are maintaining their presence in the face of considerable difficulties.

The live export trade is also an important element of our meat and livestock industry and provides a complement to the beef trade. To date this year, this trade has been exceptionally strong with exports almost doubling compared to 2008. Bord Bia continues to work closely with the industry in monitoring and developing emerging opportunities for Irish livestock in the British, continental and international markets. This includes contacts with leading retailers in Britain to establish their interest in cattle born in Ireland and finished in Britain.

The Government, the Department and its support agencies, including Enterprise Ireland, Teagasc and Bord Bia, have developed a variety of non-price strategies to deal with evolving market challenges. Among these are the capital investment aid scheme for the beef and sheepmeat sectors, breed improvement programmes being progressed by the Irish Cattle Breeding Federation and the animal welfare scheme for suckler herds. These schemes concentrate on using the best available scientific and genetic data to further improve the cattle herd and ultimately improve returns to the producer.

Additional information not given on the floor of the House.

The beef quality assurance scheme, administered by Bord Bia is crucial in reassuring consumers that the beef they purchase from Ireland meets the highest standards of quality, safety and traceability.

In tandem with these initiatives Bord Bia is implementing an enhanced Irish beef promotion strategy for the period 2008-13 in conjunction with key continental retail outlets. Previous efforts to differentiate and reposition Irish beef, concentrating as they have on the key characteristics of Irish beef — traditional grass-based production, full traceability and quality assurance — have proved extremely successful. It is crucial that we continue to target our marketing efforts and promotional strategies on consolidating our place in the valuable European market. Bord Bia is undertaking a 2009 autumn beef promotion campaign aimed at 40 million Europeans in ten major markets.

I am acutely aware of the importance of direct payments to farmers, particularly when market returns are at low levels. In 2008, these payments represented almost one third of total farm revenue, the most important being the single farm payment. I am pleased to remind Deputies that, following my request to the European Commission earlier in the summer, advance payment of some 70% of the single farm payment will commence tomorrow. This payment, in the region of €800 million, is unprecedented and will assist farmers greatly in dealing with cash flow difficulties. I also intend to maximise the balance of payments due before Christmas.

It is true that 2009 has been a difficult year for all sectors of farming with beef producers especially affected. A number of factors have combined to deliver a series of challenges which have had a significant impact on the livelihood of many in the sector. However, I am confident that, thanks to the undoubted quality and uniqueness of our product, together with the range of initiatives I have mentioned, the sector will be well positioned to take advantage of the evolving prospects that recovery will bring. Indeed, European Commission projections of a continued decline in beef production on the Continent over the medium term, thus widening the supply gap already in existence, may even serve to provide further opportunities for Irish producers to fill.

Does the Minister support live exports?

The critical issue for returns to Irish beef farmers from live exports is that the live cattle exported to the United Kingdom can be slaughtered there. Over the years this State, through its various agencies, has delivered substantial grant aid to Irish meat processors and is delivering in the region of €50 million in grant aid under the meat investment fund to the main players who are active in the Irish meat processing market and in the UK. It is also giving work permits although there are 400,000 unemployed here. I do not understand the logic of that.

The Ministers for Agriculture, Fisheries and Food and Enterprise, Trade and Employment have leverage on this issue. This House was recalled in the late 1980s to bail out the Goodman group when it threatened to go under but it and others, Kepak, and Dawn, are active in the UK and collude to prevent the slaughter of Irish exported live cattle in their plants in England. They are also putting pressure on other small abattoirs to refuse to slaughter cattle. That costs Irish beef producers in the region of €150 a head. Will the Ministers continue to sit on their hands and pay €50 million in grant aid to close down the beef industry here? Beef farmers will not continue to dip into their single farm payment to subsidise beef production. The consequences of that will be job losses in processing and in the food industry downstream. If the Minister supports live exports what will he do about the problem of slaughtering live exported animals in the UK?

I fully support the export of live cattle but we need a balance between the cattle for slaughter here and the competition from live exports. The number of cattle exported to Britain up to 4 October last represents an increase of 613% over the comparable period in 2008, and the number exported to Northern Ireland represents an increase of 286% a year on.

I am aware of the difficulties and was working on this prior to any media commentary. I met the farming groups and individual farmers.

Did the Minister meet the Goodman group?

No, I meet representative groups.

The Minister will go on paying the grants until he gets a bit of cop on.

I met farmers and people involved in all the farming organisations who told me that there are buyers in Britain anxious to purchase Irish cattle. We have taken up the various issues raised. Bord Bia and our veterinary services have been in contact with the Chief Veterinary Officer in Britain.

Irish exporters encounter two difficulties in Britain, the veterinary issues concerning the post-import conditions imposed by the Department of the Environment, Food and Rural Development, and technical beef labelling issues surrounding the finished beef product and other beef industry complications. Over the past few weeks and earlier I met ICOS in its capacity as the umbrella body for the marts organisations and outlined what we had been doing to remove the blockages from the system. My officials have worked actively with the representative groups here and with the veterinary people in Britain.

We have involved Bord Bia on the beef labelling scheme and I have asked it to offer advice and to find out how we can overcome the labelling difficulty for cattle born in Ireland but fattened and slaughtered in the UK. They will not get a British quality assurance mark. Bord Bia has worked with the industry and has put a proposal for a beef quality assurance scheme to include cattle for export. The scheme would draw on data from the beef quality assurance and the beef suckler welfare schemes and other requirements at export level and incorporate auditing of participants including unannounced audits to verify compliance. Such a scheme could enable Irish born animals to access higher value market channels in the destination country. Bord Bia has communicated this proposal to the industry. The initial feedback from the industry and from a live exporter has been positive. The scheme would have to meet with the approval of buyers in the British market. We need access to that market without confusion about the labelling of the product.

Has the Minister met with the meat plants? They are the problem. His Department and the Department of Enterprise, Trade and Employment will pay them €50 million in grant aid and give them work permits. This is nothing short of national sabotage by the meat plants that operate in Ireland and the UK. We have no problem exporting live bull beef to Italy, or calves to Holland but we have a problem getting our animals into the UK where the market is worth €1.7 billion. Is the Minister going to sit on his hands and talk to everybody but those responsible, the meat plants, the Goodman group, Dawn and Kepak, in particular? Will he meet the meat plants and tell them he will not pay the money they are getting under the meat investment——

The Deputy has asked that question three times.

I have not got an answer yet.

We conveyed to Meat Industry Ireland, MII, the representative organisation for the producers very clearly the concerns expressed to us by the exporters and farmers.

What did they say?

We have put particular queries to the Chief Veterinary Officer in Britain and await a response. We have been told about the difficulties and have said that we want to work to eliminate them. We are waiting for the Chief Veterinary Officer to reply and tell us if there is anything we need to address.

Fishing Vessels.

Tom Sheahan

Ceist:

4 Deputy Tom Sheahan asked the Minister for Agriculture, Fisheries and Food if he has received advice on the potential financial repercussions which may arise for his Department following contact from the Office of the Ombudsman relating to the lost at sea scheme; and if he will make a statement on the matter. [36518/09]

The lost at sea scheme was a limited scheme introduced in June 2001, with a closing date of 31 December 2001. Its objective was to enable qualifying applicants, who were otherwise unable to do so for financial or related reasons, to continue a family tradition of sea-fishing.

The scheme provided replacement capacity, gross tons and kilowatts, that the applicant would otherwise have had to purchase on the tonnage market, for the purpose of introducing a replacement vessel in respect of fishing boats lost at sea between 1980 and the establishment of the fishing boat register in 1990. The terms of the scheme also specified further conditions pertaining to the use of the capacity once it was deemed eligible. The conditions of the scheme as published were:

"The capacity of a vessel which was lost at sea before the coming into operation of the (Sea Fishing Boat) Register set up by the 1989 Regulations will, as an entirely exceptional measure, be accepted as replacement capacity provided that the Department is fully satisfied, by reference to appropriate documentary evidence, that:

(a) the applicant was the owner and skipper of a registered Irish sea boat which was lost at sea;

(b) the boat in question was lost at sea after 1 January 1980 as a result of an accident, and that such loss has been verified by the emergency services or another independent source acceptable to the Department;

(c) the boat in question is shown, by reference to log sheet returns or other appropriate records, to have been in active and continuous use for a considerable period of years by the person concerned for sea fishing of a category now covered by the replacement policy rules, until its loss at sea;

(d) the lost vessel was the sole means (i.e. the only vessel) of the applicant for engaging in sea fishing;

(e) the applicant was unable, for verified financial or related reasons, to acquire a replacement vessel, or any other registered vessel, before the introduction of the new Register pursuant to the 1989 Regulations;

Will the Minister of State answer my question? His time will run out and I will not have received an answer.

That is a matter for the Chair. Will the Minister of State continue the answer?

They further read:

(f) the applicant has been unable also, for verified financial or related reasons, since the inception of the new registration system, to acquire a fishing vessel to engage in sea fishing of the same class or description as was carried out by the vessel lost at sea——

We had that in a written reply.

Allow the Minister of State to speak. Questions are put and Deputies are given an opportunity to listen.

There is then an opportunity for questioning, Deputy Creed. That is the way the operation of the House will continue. The Minister of State, without interruption.

——or any other sea fishing vessel which is subject to the replacement policy regime;

(g) the applicant did not receive any financial benefit from the loss.

The capacity of a fishing vessel lost at sea will be accepted as replacement capacity for licensing purposes only if it is to be used for the purposes of sustaining or maintaining a family tradition of sea fishing. Any capacity accepted as replacement capacity must, therefore, be used for the purposes of introducing a replacement for the lost vessel which will be owned and skippered by the applicant or by an immediate relation of the applicant. Any capacity from a lost vessel so used may not be sold or otherwise disposed of.

Additional information not given on the floor of the House.

Applications under the scheme must be received by 31 December 2001.

My Department has been corresponding with the Ombudsman about a complaint made to her by an unsuccessful applicant under this scheme. This correspondence is ongoing and the Deputy will appreciate that I am not in a position to speculate on possible financial or other outcomes until the matter has been concluded.

On a point of order, Deputy Sheahan raised a material question, namely, whether the Minister has taken advice in his Department. This is outrageous.

The Deputy knows these are Priority Questions and the only person who can ask a further question is Deputy Sheahan who tabled the original one. Please allow him speak. I am sure the Deputy will make a point and ask a question.

I asked the Minister if he had received advice on the potential financial repercussions which may arise for his Department following contact from the Ombudsman's office relating to the lost at sea scheme.

There was no answer.

I received no answer. I tabled a similar question last week to which I received a written reply yesterday which was what the Minister of State has just read out. The lost at sea scheme——

The Deputy should put his question directly to the Minister of State.

I thank the Leas-Cheann Comhairle. Concerning the lost at sea scheme, may I quote the Ombudsman?

I am afraid the Deputy cannot quote during Question Time but he can refer to material.

I shall refer to it. It points out that while acknowledging that the Department, under European Council Regulation No. 2371/2002, is of the opinion that the lost at sea scheme cannot be revisited, the Ombudsman's office considers that it did not address the central issue which is that the scheme was seriously deficient and flawed as outlined in previous correspondence to the Department. Accordingly, the office has reverted to the Department requesting that it outline how it proposes to address this issue.

The lost at sea scheme was introduced, as the Minister of State noted, to get people back fishing who had lost their boats. It was abused and in the Ombudsman's words, was "seriously deficient and flawed". I am led to believe the Ombudsman's report will be brought to the House next week with a recommendation that one family which was refused entry into the scheme would have to be compensated. The point is that 62 other applicants were refused. This is what I am trying to find out and that was why I posed the question as I did, to receive an answer from the Minister of State.

Has the Minister of State looked at the financial repercussions that may be present for the taxpayer and the State? Has he discussed this with his Departmental colleague, the Minister of State, Deputy Trevor Sargent, who lodged a complaint with the Standards in Public Office Commission regarding the handling by former Ministers of the scheme? Does the Minister of State, Deputy Sargent, still consider that Deputy Fahey's handling of the scheme is worthy of complaint?

The silent Minister of State, Deputy Sargent.

It was not my question.

The Minister of State, Deputy Killeen.

The Department is corresponding with the Ombudsman's office with regard to this scheme and the matter has not been concluded. Detailed legal advice was sought from the Attorney General's office, was considered and acted upon. It would be virtually impossible to answer the Deputy's question in detail, for a number of reasons. There are perhaps three considerations of some importance, two of which relate to the conditions of the scheme. First, if, finally, there were to be a recommendation for payment in this case, the applicant made the application considerably outside the application period. That would relate not only to the 62 vessels which were refused but to an unknown number of others.

Others were approved before the scheme closed.

That might come into play. That is one element of the answer to the point made by Deputy Sheahan. Second, apart from the closing date that was not met by the applicant in question, it is difficult to speculate what judgments will be made regarding other applicants who might not have met other conditions of the scheme. It is impossible to know how many there were. It is also important to bear in mind that no money was paid to anybody, nor was any tradeable asset made available to anybody under the terms of the scheme. If money were to be paid arising from this it appears it would be in accordance with the decommissioning scheme which is entirely separate and has nothing whatsoever to do with this scheme. In the circumstances, while one would have enormous sympathy for the family concerned and would obviously wish to be in a position to provide some recompense, there would have to be no doubt that the motivation in setting up the scheme was along those lines. The fact is that unless one knew what conditions might be set aside in any judgment it would be impossible to predict what the cost might be.

A brief supplementary, Deputy Sheahan.

They got no money. That is correct. However, they got 200 tonnes of quota, with a value of €10,000 per tonne between two men. That is 75% of the whole tonnage available to the 68 applicants. Two men from County Galway got 75% of it. It was because of the way it was worked——

A question, please.

I have to lead up to it. It was the way it was worked. Four months before the scheme was launched the then Minister met with the two applicants and told them to apply. The closing date for the scheme was December 2001 yet the Minister wrote to the two applicants in October 2001 and congratulated them. Thereafter, the Attorney General's advice was that they had to receive this settlement because of the Minister's letter. This was a con job and a set-up. I ask the Minister of State, Deputy Sargent, while he is present, if he still believes this con job is worthy of a complaint to the Standards in Public Office Commission.

A final reply from the Minister of State.

It is a very common error. People assume in these cases that a quota was provided rather than financial recompense. What was provided was tonnage and kilowatt hours, which is considerably different in many respects. A condition was imposed on the scheme which I understand was included at the insistence of the Minister, namely, that it could not be tradeable or otherwise disposed of to the benefit of the people who got it. There were also conditions in respect of the ownership and skippering of the vessel which ensured that only the family who had the loss could benefit from it.

In the circumstances, only six vessels of the 68 that applied were successful. In the setting up of the scheme it would have been impossible for anybody to predict what kilowatts and tonnage might have been required to be made available to vessels that were successful. If 20 vessels had been successful, or indeed one other large vessel, there would have been implications for the percentage that was awarded. At this stage it is very easy to be wise and say that particular people benefited for particular reasons. As far as I am concerned, the Department has administered the scheme fairly and in accordance with the conditions of the scheme. If those conditions are to be changed at this stage, I cannot tell the Deputy what the implications are because it is impossible to know.

It is easy to be wise afterwards.

Does the Minister of State believe a good job was done?

The Ombudsman does not agree with him.

Grocery Industry.

Andrew Doyle

Ceist:

5 Deputy Andrew Doyle asked the Minister for Agriculture, Fisheries and Food if he has made a submission to the Department of Enterprise, Trade and Employment’s public consultation process in relation to the introduction of a code of practice for grocery goods undertakings; if he has made a proposal to the EU Commissioner regarding the proposed code of conduct for grocery retailers in view of the plan to publish a report on anti-competitive practices before the end of 2009; and if he will make a statement on the matter. [36519/09]

The Department of Enterprise, Trade and Employment consulted closely with my Department in preparing the consultation paper for the public consultation process, which was launched last August. Her Department is currently assessing some 28 submissions received from a range of interests. It is my intention to work in close consultation with the Tánaiste in developing a code on the lines of our programme for government.

The proposed introduction of a code of practice for grocery goods undertakings follows public debate on grocery prices and price differentials. The consultation in August was undertaken to address concerns raised about the nature of the relationships between grocery goods businesses and, in particular, in the relationships between suppliers and retailers of grocery goods. The questions asked of stakeholders, including consumers included whether any such code of practice should be voluntary or statutory in nature; how it might best be enforced; whether a separate Ombudsman's office should be established; whether there should be a threshold to limit its application, and what impact application of such a code might have on consumer choice and prices.

Underlying the debate is the increasing concentration of retail power in the hands of a few large supermarket chains. This is an international phenomenon, which has fundamentally changed the balance of market negotiating power in the food chain. It is one factor, although not the only one, contributing to the declining share of the retail price received by producers. Although there is, of course, always potential for some tension in any market relationship, there has been a noticeable trend recently towards greater tension, and even allegations of sharp practice.

At the Council of Ministers I raised the issue of the need for balance in the food supply chain and colleagues in the Council also expressed strong views on this matter. In January there was a discussion on a road map to improve the functioning of the food supply chain. I said then that competition alone cannot act as a sole mechanism to maintain efficient markets. The careful and sensitive use of market management measures can help to maintain balance on the market when appropriate and the use of such mechanisms can assist in the provision of fair returns to producers.

At EU level there is a need to give urgent thought to ensuring that markets function well and that unfair practices are prevented. The agri-food industry is hugely important to Ireland and the EU. The EU needs to safeguard its production base so that it can meet the future demand of its population for food, feed and bio-energy. It is my firm view that retailers must strike a reasonable balance between granting value for consumers and giving to suppliers and producers. Balance between all stakeholders, including suppliers, producers, retailers and consumers may well be difficult to achieve but the Tánaiste and I are committed to working towards mechanisms at EU level.

I thank the Leas-Cheann Comhairle and the Minister of State. It is a fact that three multiples control approximately 70% and five control 85%. It is also a fact that the price of dairy products at the farm gate dropped an average of 34% last year, but only 3% for the consumer. Against this background, the Minister of State claims that the Government will produce something along the lines agreed in the programme for Government, which seems to suggest a voluntary code as opposed to a statutory code.

The UK tried a voluntary code of good behaviour, but that did not work and it is revisiting the matter and will make the code statutory. Ironically, the Tánaiste published her Bill a day after we published ours, which we intend to lay before the House soon. Our fair trade food information Bill lays out in black and white what is an offence, what penalties can be imposed, retailers' obligations in terms of credit facilities and who is obliged to oversee the area. Commissioner Fischer Boel has indicated that, before she finishes her term, she intends to produce a report on the behaviour in question. It is obvious that, if this is a problem in Europe, it is definitely a problem in Ireland and Britain where supermarket chains seem to demand higher margins.

Why not start at the right place, that is, a statutory code? No compliant retailer would have anything to worry about with our Bill or a statutory code. The chief executive of one group stated that it would add costs, but this is not the case. For example, keeping the requisite records would cost no more than an audit of the business operation. The claim is a red herring. We should put the code on a statutory basis from day one.

I appreciate the contributions of Deputy Doyle and his party to the ongoing debate. Like him, I would like to act on this matter quickly. Likewise, the Tánaiste has stated that she would put something in place within 24 hours if she could. However, the reality is that there is a process——

She said there would be no problem immediately after we published our Bill.

This is a priority question in the name of Deputy Doyle.

I will try not to be drawn. To be carried through effectively and successfully, the process must take into account the fact that the Tánaiste's Department is assessing 27 submissions. We are actively engaging with her Department, given the critical nature of what is at stake for the agrifood sector.

It is not true to say that the code has been predetermined to be voluntary. It is too early to say whether it will be voluntary or statutory. As the Deputy may have read in the review of the programme for Government, there is a clear opening whereby, if necessary, the code will be put on a mandatory basis. However, due process must be followed and everyone with an interest must be heard.

The Joint Committee on Agriculture, Fisheries and Food has received evidence from people who are not directly involved but are interested in this area, such as the economist Mr. Jim Power, Dr. Ciaran Fitzgerald and others. They have discovered that 100,000 jobs will be in jeopardy if we do not address this issue as soon as possible. The Commissioner has identified the matter as a European problem, but must we wait for EU guidelines? Can we not see that the Irish situation is more acute? The facts are there concerning the price differentials between what the consumer pays and what the supplier is paid. It is obvious what is occurring.

There is too much consultation.

As this is a priority question, I must turn a deaf ear to Deputy Sherlock at the moment, but I will talk with him afterwards.

That is fine. I am used to that.

The Minister of State does not need to turn a deaf ear to find——

I will answer the question in as straightforward a manner as I can. Commissioner Fischer Boel's opinion and work on the roadmap in respect of the communication on food prices will be implemented by the end of 2009. While having it sooner would be great, Deputy Doyle will understand the importance of the European market for us. While we need to proceed quickly, we cannot do so in isolation from the European Commission. In the meantime, other avenues are open to us.

As the Deputy stated, the supermarket chains dominate the food sector, but this issue must be addressed in its own right. A code of practice, be it mandatory or voluntary, will not change it, but it may be helped by having other access routes to market. There are many ways to address the matter that would allow us to save jobs and create new ones.

I am afraid we are running over time on every question in this session.

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