Priority Questions

Agri-Environment Options Scheme

Andrew Doyle

Ceist:

7 Deputy Andrew Doyle asked the Minister for Agriculture, Fisheries and Food if the four year plan provides for new entrants to the agri-environment options scheme in 2011 and beyond; and if he will make a statement on the matter. [45523/10]

A total of 9,236 applications were received by my Department under the agri-environment options scheme, AEOS, by the closing date of 17 May 2010. All of these applications have been recorded and examined by my Department. To date 5,706 applications have been found to be fully compliant with scheme requirements and the applicants have received notification from the Department approving their participation in the scheme.

A further 2,585 applications have been processed and my Department will be issuing the letters of approval over the next few days. In a number of cases, approval for entry into the scheme will be conditional on minor queries and obvious errors being resolved by the applicant. This will bring the total numbers approved by the beginning of December to 8,291. There are 921 applications which require more detailed investigation by my Department, some of which will have to be resolved in correspondence with the applicants before approvals can issue. The Department is working through these applications with a view to reaching a decision on entry into the scheme in each case as soon as possible. The remaining 24 applicants have withdrawn their applications. Further participation in the new agri-environment options scheme will have to be determined within the limits of the level of funding which will be available to my Department.

The Government's for year plan which was published last week sets out the expenditure ceilings for my Department for the period 2011-14. The plan does not specify the programmes or schemes to which the funding will be allocated. However, it confirms that there will be a focus on streamlining a range of programmes and that options to be considered include the prioritisation of financial support to active farmers. At this stage, no decisions have been taken about the levels of participation in various schemes during the period of the four year plan or on the payment rates that will apply. The 2011 budget will be announced by the Minister for Finance next week and, in that context, I will be giving careful consideration to the allocations of resources against the competing demands in 2011.

Substantial funding is already committed by my Department to funding agri-environment schemes, including AEOS. Total payments last year in respect of REPS 3 and REPS 4 amounted to €341 million. Total funding available this year is €330 million, to provide for payments under REPS 3, REPS 4 and AEOS. Payments in respect of REPS 3 are issuing on a continuous basis and I have urged all participants in the scheme to submit their annual claims as quickly as possible to ensure that they receive payment before year end. The administrative checks and SPS cross-checks which are required before REPS 4 payments for the 2010 scheme can issue are at an advanced stage and I expect that payments will commence in the next week or so. The Department has been concentrating on processing all applications received under AEOS and once this process is complete, arrangements will be put in place to commence payments.

I thank the Minister for his reply. Am I correct that the Minister said €330 million is available to pay REPS 3, REPS 4 and AEOS in 2010?

Is it the case, in light of the number of people who will exit REPS 3 during the course of 2011-12 that this burden will reduce significantly if no other scheme is put in place? I cannot urge strongly enough upon the Minister the necessity to provide some form of other scheme. I acknowledge that REPS was never intended to be an income stream per se but REPS has been used as income support by people in Donegal and the west involved in destocking.

The number of people exiting REPS 3 will result in a significant lower burden in 2011. It is important that some option is available to those people in 2011-12 and into the future.

Approximately 10,000 farmers — I say this without having checked the figures recently — will exit REPS 3 between now and the middle of next May, which is equivalent to the number of people who joined the new AEOS scheme on 17 May last. The original allocation for the REPS schemes in 2009 was €330 million. With reallocation from other subheads I was able to pay out €341 million. The figure of €330 million is adequate to meet requirements this year. I have asked those people involved in REPS 3 to return their annual claims so as to enable us turn around payments quickly. I am at this stage trying to encourage people to get back to us so that we can maximise payments this year.

With regard to the total funding available to the Department next year, that figure has not yet been finalised in the context of the forthcoming budget and so on. I accept Deputy Doyle's point, which was previously made to me by Deputy Sherlock. The AEOS scheme has been successful and a number of farmers now exiting REPS 3 or who will do so in the early part of next year are interested in joining a follow up scheme. Decisions have not yet been made in regard to possible admission to the AEOS scheme. That will not be finalised for some time.

The capital expenditure programme, which I accept is different, has identified that spending next year in the Department of Agriculture, Fisheries and Food will be down from €104 million to €89 million. Annex A of the four year plan states that savings in the first year for that Department will be €75 million. Am I correct in saying that this will encompass all schemes or does that figure relate only to general savings?

Capital expenditure for next year will be of the order of €329 million. I do not know from where Deputy Doyle got the figure of €100 million. The four year plan states that €75 million in savings is to be achieved in 2011. This will be achieved under a number of subheads. An area in respect of which we have made substantial savings in the past 18 months is administration, in particular the rationalisation programme in regard to offices. These savings have been devoted to farm programmes. Some of the savings made last year on the administrative budget may have gone into the REPS subhead and farm waste management scheme. Savings of €75 million are be achieved under the 2011 budget in comparison with the 2010 budget.

Sugar Beet Industry

Sean Sherlock

Ceist:

8 Deputy Seán Sherlock asked the Minister for Agriculture, Fisheries and Food if he is aware of any impediments preventing the creation of a new sugar beet industry in Ireland; if not, the volume of quota Ireland could reasonably expect to receive and if he intends to facilitate sugar production; and if he will make a statement on the matter. [45472/10]

As part of the reform of the EU sugar regime in 2006 a temporary restructuring scheme was introduced with the aim of the EU Commission reducing EU sugar production in order to comply with WTO and other international obligations. The scheme provided an incentive for sugar processors to renounce sugar quota and dismantle the associated sugar processing plant and it provided compensation for affected stakeholders.

Greencore plc, the sole Irish sugar processor and holder of the entire Irish quota allocation, decided to avail of the restructuring scheme. Accordingly, the company renounced the quota and dismantled the last remaining Irish sugar factory at Mallow in compliance with the conditions of the scheme. This brought the Irish sugar industry to an end. As a result of the restructuring scheme, the overall EU sugar quota was reduced by almost six million tonnes, of which the Irish quota contributed some 200,000 tonnes.

At the time of the reform negotiations, the Government made strenuous efforts to have the Commission's reform proposals modified in such a way that an efficient sugar industry could have been retained in Ireland. In the end, there was insufficient political support among our EU partners for the Irish position and our efforts had to be directed at achieving the best possible compensation package. The sugar reform package we secured assisted a restructuring aid, diversification aids and single payment and was worth approximately €353 million, of which €220 million went to Irish beet growers, €6 million went to machinery contractors and €127 million went to Greencore plc. The beet growers' share was made up of diversification aid of €44 million, compensation via the single payment, which is €123 million over seven years and restructuring aid of €53 million. The restructuring and diversification aids were paid out in 2007 and 2008.

To draw down the restructuring aid, Greencore plc, had to submit a restructuring plan, incorporating a social plan and an environmental plan. The social plan provided for early retirement and redundancy packages as well as support services for the departing Mallow workers such as career counselling, financial advice, including pension advice, pre-retirement programmes for those aged over 50 years, job-seeking support and "start your own business" programmes. The social plan was implemented in the first year of restructuring. The environmental plan will finish in 2010.

There is no mechanism under the current regulations that would allow for the reinstatement of the sugar quota for the growing of sugar beet in Ireland for the sugar industry. Any proposal to review the EU sugar quota regime would be a matter for the EU Commission in the first instance and any proposal to re-establish a sugar factory in Ireland would, subject to the availability of quota, be a matter for commercial decisions by interested parties.

I can confirm that a quantity of sugar beet has always been grown in Ireland for fodder purposes and this continues. It is not affected by the EU sugar regime.

Will the Minister clarify his reply? Did I interpret him correctly when he said there is no impediment to the process but it would be subject to an EU Commission proposal? Is there a clause in the agreement that resulted in the closure of the industry, which says that no sugar beet should be produced in Ireland up to 2017? That needs to be clarified by him.

Has he regrets? Does he now feel Government policy at the time was short-sighted in that even if we were not producing sugar, we could have used the sugar beet crop to produce ethanol to fulfil our obligations under the bio-fuels scheme and we would not have to import undenatured ethanol from third countries such as Brazil because we could blend it into stocks at Whitegate and produce an indigenous crop?

As I have said previously, the sugar quota was renounced by Greencore plc and not by the Government. The entire quota was held by the company and not the State.

The sugar regime in its present format runs to 2015, not 2017. I say that from memory but I will double check that. The regime was not changed between 1968 and 2006 and there is no indication from the Commission that it proposes to change the regime at this time because there is no indication whatsoever of this issue being revisited.

That reply is extremely disappointing but I do not want to make political hay out of this. I accept what the Minister is saying in so far as Greencore, as the commercial entity responsible for processing sugar, stated it would renounce its quota but there is a disconnect between that and the political decision taken at Council of Ministers level, to which Fianna Fáil was a party, to accept the restructuring package as it pertained to Ireland. Will the Minister acknowledge that post-2015 we could grow sugar beet again in Ireland, if not to supply the confectionery market, to ensure we can meet our obligations under the bio-fuels scheme?

The rationalisation of the industry undertaken by the Commission resulted in a reduction of 6 million tonnes in production under a voluntary scheme. Greencore was the quota holder. I stated in the House clearly, as did the Tánaiste who was Minister at the time, that she was extremely active along with 13 other member states in opposing the Commission's proposals. As the process went along and decision day approached, there was constant contact with the Commission, the Agriculture Commissioner and other like minded states but opposition to the Commission's proposals dissipated. We did not have the support at the Council meeting to block the proposals and, in view of that, the Tánaiste, as Minister for Agriculture and Food at the time, rightly negotiated a compensation package in the event of the quota holder exiting the industry. That is how that came about. Greencore exited the industry, not the Government or the Department. The Tánaiste was vigorous in her continual opposition. She chaired and led the group of 14 likeminded states opposed to the Commission's proposals but, unfortunately——

The Minister has not answered my question about the potential of the sugar beet crop in the production of ethanol.

We are over time and we must make progress. I will allow the Minister to reply briefly.

The quota regime is in place until 2015. There is no indication from the Commission that it proposes to revisit it then. Naturally, if the Commission decides to do so, that will be a different scenario.

The Minister is kicking to touch again.

I am outlining the facts.

We must move on to the next question.

This is the only forum I have to have my question answered. I want the Minister to give an opinion on whether we can produce ethanol on an indigenous basis. He is kicking to touch again. That sums up this Government.

We have a question about ethanol production later.

The Minister has replied to this question. We will move on to Question No. 9.

National Recovery Plan

Andrew Doyle

Ceist:

9 Deputy Andrew Doyle asked the Minister for Agriculture, Fisheries and Food his views on the specific measures in the Government’s proposed national recovery plan affecting the agricultural sector; if any analysis has been carried out by him in consultation with the Department of Finance with regard to the proposed tax changes; and if he will make a statement on the matter. [45524/10]

The national recovery plan published by the Government recognises that future policy must be focused on areas where competitive advantage can be achieved and it acknowledges the contribution that Irish agriculture and the Irish agrifood industry makes and will continue to make to help boost competitiveness and increase employment in the economy. Exports by this sector amounted to approximately €7 billion in 2009, representing half of all exports by indigenously-owned firms. During the first five months of 2010, the value of exports was more than 8% higher than a year earlier, at almost €3 billion and the rate of recovery has accelerated as the year has progressed with exports growing by 14% in the third quarter. The sector is also highly labour intensive and is a vital part of the rural economy.

The plan rightly acknowledges Food Harvest 2020 as a comprehensive and considered roadmap for the development of Ireland's key indigenous sector. Ireland can grow its exports of food and beverages by one third to €12 billion annually. We can increase the value of primary production by our farmers and fishermen by €1.5 billion and value added in processing by €3 billion. The ending of milk quotas in 2015 represents an exceptional opportunity to grow our milk output by an estimated 50%. We can, and must, improve our cost competitiveness by20%, relative to our competitors. All of these issues have fed into the development of the national recovery plan and are key elements which contribute to our return to economic stability and growth.

Regarding the Department of Agriculture, Fisheries and Food, the plan identifies the level of departmental savings that have to be achieved over the period 2011 to 2014. The Department will be required to achieve savings of €75 million in 2011 and a further €120 million over the following three years. Based on the savings that have been identified for 2011, decisions on expenditure across all subheads will be finalised in the context of the 2011 Vote for the Department which will be announced on budget day, 7 December. While the overall savings to be achieved in the following years has been identified, specific decisions on individual programme expenditures in those years have not been taken. Such decisions will be taken as part of the annual Estimates process in each of the years 2012, 2013 and 2014.

Additional information not given on the floor of the House.

The national recovery plan also points to the need for additional capital savings as the most recent public capital investment programme was based on a budget of €5.5 billion in each year from 2011 to 2016. While my Department's capital allocations have been reduced I am confident that the allocation for 2011 will adequately meet the Department's capital requirements. For future years, capital expenditure will be prioritised and any future capital investment programmes will, where permissible, be targeted at producers with the best potential to achieve growth and competitiveness and at young farmers with relevant qualifications and robust business plans.

Taxation policy is primarily a matter for the Minister for Finance; however, my officials are of course in regular contact with Department of Finance officials concerning these matters. Details of the tax measures affecting the agricultural sector are matters that are appropriate to the national budget, which will be announced next week.

We do not have many options and there are limited areas with potential to pay back the money we are supposedly getting at a cheap interest rate of 5.8% in the bailout. However, agriculture is one area with potential. I am concerned by the responses of the Minister of State, Deputy Connick, to this question and the Minister to an earlier question about not putting road blocks in the way of this sector to allow it to continue to grow. It will be essential that an environmental scheme remain in place to allow people to finish the work they started. It will be imperative that stock relief and other tax reliefs are retained to allow the industry to grow.

Has the Deputy a question?

Is the team over there prepared to fight the corner for Irish agriculture to ensure that on the other side of next week's budget, we have no noose around the neck of Irish agriculture? I acknowledge the growth. The euro will probably weaken soon. However, we have €75 million to save for next year, so the Minister should ensure that the savings are in the streamlining of bureaucracy——

The Deputy is making a fine speech, but this is questiontime.

I am asking the Minister to make sure that he does that.

I was asked if we are prepared to wear the green jersey and fight the fight. We have been fighting the fight for a number of months in the agriculture sector. The report published and launched by the Minister earlier this year, Food Harvest 2020, clearly outlines the views of the Government on the prospects for agriculture and fisheries, so we see that as a vital driver of the Irish economy. Savings are required across all subheads and across the various divisions. We have been lobbied intensively by farmers across the country about the various schemes and we are hopeful that we can protect them. However, until we see the figures we are dealing with after the budget, rather than the overall capital figure, we cannot give any indication as to what is likely to happen. We are fighting to ensure that we maximise the return right across the various subheads and sectors.

I do not dispute the Minister of State's sincerity. I am concerned when I look at reports that recommend a slash and burn approach, such as the taxation report, the McCarthy report and so on. These are very simplistic and they do not stack up against the likes of Food Harvest 2020, Pathways to Growth by Bord Bia and common sense. It is very easy to take a slash and burn approach to this budget. It has to be done in a different way when we are trying to achieve savings. The gates need to be opened for the industry and roadblocks should not be put in their way.

I think that was a question.

I will not disagree with the Deputy's point. We are supportive of the agriculture industry. We are trying to deal with it within a capital budget that will be presented next week. Subject to the budget and to the announcements on the day, we are not in a position to come forward and confirm any of the amounts under the various subheadings. According to the report of the national recovery plan, a huge amount of the savings can be made under the administrative subheadings. Much work has been done on this and a huge proportion of the cuts will be in that particular sector, and hopefully this will improve the situation on red tape.

Common Agricultural Policy

Sean Sherlock

Ceist:

10 Deputy Seán Sherlock asked the Minister for Agriculture, Fisheries and Food his views on the three options outlined in the Common Agricultural Policy reform proposals communication recently published; and if he will make a statement on the matter. [45473/10]

Noel Coonan

Ceist:

11 Deputy Noel J. Coonan asked the Minister for Agriculture, Fisheries and Food the response and submissions he will make to the European Commission following the recently published discussion document on Common Agricultural Policy reform from the Commission entitled The CAP towards 2020: Meeting the food, natural resources and territorial challenges of the future; his response to the report and when he expects to communicate his proposals to the EU Commission; and if he will make a statement on the matter. [45525/10]

I propose to take Question Nos. 10 and 11 together.

I must first underline some fundamental points that we should bear in mind in this CAP reform. Now, more than ever, we need to focus on ensuring security of supply of safe, high quality and sustainably produced food — at reasonable prices for our consumers, and with reasonable returns to our farmers and processors. In order to achieve this we will require a strong and adequately resourced CAP. I agree with the communication that "the CAP should remain a strong common policy, structured around its two pillars". However, I would caution that, to be meaningful, this will require appropriate resources and this must be reflected in the new financial framework.

Although three options for CAP reform are outlined in the recent Commission communication, it is clear that the main option under consideration is the second option for a better targeted and effective policy. I had the opportunity to give my first reaction to the communication at last Monday's meeting of the EU Council of Agriculture Ministers. This was the first step in what will be a lengthy process of negotiations. Over the coming months, we will discuss the communication in greater detail with a view to agreeing conclusions on the general orientation of policy for the CAP after 2013, before the legislative proposals, due next July, are framed. I will be participating actively in that process and I will continue to build up alliances among my colleagues in other member states to secure support for my position.

The communication is short on detail so I would reserve our position on many of the substantive issues until such time as detailed proposals are presented. Having said that, I welcome the commitment of the Commission to a strong CAP in the future and I subscribe to the three strategic aims that have been identified of ensuring security of food supply, sustainable management of natural resources and maintenance of viable rural areas. I also welcome the commitment to the continuation of decoupled direct payments, the maintenance of the current rural development themes and the retention and enhancement of market management measures, although I would have preferred to see more specific proposals to address the increase in market volatility.

The communication makes brief reference to the distribution of funds between member states under pillar 1 and pillar 2. I believe that Ireland's current share of these funds is entirely justifiable, and I will be defending this strongly in the negotiations.

The issue of payment models, that is, the distribution of funds between farmers within each member state, is an entirely separate matter. I favour allowing member states considerable flexibility in this area, as is currently the case. The agro-ecological and social conditions of farming vary hugely within the European Union, as does public perception of the role of agriculture in the economy. We should not, therefore, impose a "one size fits all" payment model on all member states.

With regard to the proposed "greening" of the direct payment, I am particularly concerned that we should not underplay or undervalue the substantial environmental public good already being delivered through the current cross compliance requirements. I welcome the commitment in the communication to simplification, but we must bear that issue in mind when discussing any further "greening" of the single payment.

I welcome the continued emphasis on competitiveness and sustainability in rural development policy. I note the increased focus on the environment, climate change and innovation and the suggestion to link investments to both economic and environmental performance. This is acceptable provided it is complementary to the investment necessary for restructuring and modernisation. It is vital that we use rural development measures to improve the competitiveness, as well as the sustainability, of our family farms. In addition, Ireland has a strong preference for retaining LFA payments in pillar 2.

The communication mentions the importance of targeting support towards active farmers. I agree in principle with this approach but I would wish to see further details of what is envisaged before taking a definitive position. I am also prepared to examine the introduction of upper ceilings for large-scale farms and a simplified direct payment system for small farms but I would need to see in more detail what precisely is being proposed. I would have no major objection to the retention of limited coupled support for specific regions, provided it falls within clearly defined limits.

I am open to exploring the proposal to introduce a new risk management toolbox and await further details with interest. For us it would be important that such a toolbox would have optional application in member states and would respect the wide diversity of production systems and farming throughout the EU.

Finally, I would emphasise that the communication is merely a first step in the formal negotiating process. There is a long way to go before we arrive at a conclusion of these negotiations. The negotiations will not be easy but I am determined to fight for the best possible outcome for Irish agriculture. Agriculture is our largest indigenous industry and we have much to gain from a successful outcome.

I welcome the Minister's response. It is one of those issues where we need a broad political consensus for the final outcome. I welcome the fact that the Minister is beginning to tie down the three options and is being specific about the second option. I also welcome his statement on payments and upper ceilings for larger farms. I acknowledge what the Minister is saying about potential capping and the need for further detail on that.

If Ireland is to go for the second option — I realise that it is early days in negotiations — and there is a basic rate envisaged in that for income support, how does the Minister envisage that this will work out in real terms?

I thank Deputy Sherlock for his broad support for our approach to date. That was amplified very clearly at the joint committee meeting with the Commissioner. We are one of the few countries where the office of the Taoiseach, the Minister for Finance and the Minister for Agriculture, Fisheries and Food are all singing from the same hymn sheet.

The Deputy asked a question about capping and a ceiling on payments. There will be a strange group of people with like minded views in opposition to our views on that. I met the British Minister of State for Agriculture and Food, Mr. Paice, last Monday morning and we discussed this issue. The British are totally opposed to a capping measure, as are the eastern European countries, because they have different farm structures to our own, some of which is due to their history.

Members should focus clearly on a number of issues. Further simplification is required, even in advance of the CAP reform, as is flexibility. There is the question of the distribution of funds between member states and in that distribution, account must also be taken of the different costs of production and living between member states. Some arguments that are made, particularly by the 12 newly-acceded member states, do not stack up and Ireland has carried out plenty of research to back up our particular arguments.

Flexibility is also required. A concern I have regarding some of the matters contained in the Commission's communication is that they would be moving away from simplification. I believe measures such as the greening issue, tiered payments and so on all would mean additional bureaucracy.

I wish to allow supplementary questions.

One must ensure the distribution of funds between member states and flexibility for distribution of funds within member states. The proposed model for direct payments is of crucial importance to Ireland, as is the need to retain investment measures for farm modernisation and for competitiveness.

Although Fine Gael wishes to support the Minister in so far as it can, I am a little concerned about his tactics. He stated that he wishes to reserve his position until specific proposals are made. Would it not be better to be in these negotiations with specific proposals and to have them included in the specific proposals that are to be announced? For example, I imagine the Minister would rule out the third option completely, as it would be devastating for Irish agriculture. Second, with regard to an issue pertaining to attracting young farmers onto the land, I propose including the budget for installation aid and early retirement, which the Government has plundered. It has cancelled the early retirement scheme for new entrants and installation aid has been done away with. Such measures should be more specifically included in the budget for Europe and should form an integral part of European policy. Moreover, rather than being on a 50:50 basis, it should be at least 80:20 in the budget. What has the Minister to say to young people, who are the future lifeblood of agriculture, and active farmers in respect of these schemes? In view of present economic circumstances, would it not be better for them to be funded from Europe and for Ireland to be making specific proposals in this regard?

In response to Deputy Coonan's first question, I stated I would reserve my position in respect of the definition of active farmers but nothing else, regarding the CAP. Since the first Council meeting back in September 2008, Ireland has outlined strongly its position with regard to reform of the CAP. I stated this was in respect of active farmers and I am sure that were one to canvass the views of Members or farm organisations, there would be variations on the definition of active farmers. In addition, I have spoken of the need for flexibility for the different schemes within each member state. I probably also mentioned, while appearing before the joint committee, that I see a need to provide incentives to bring more young people into farming. In recent years, as additional milk quotas becoming available to Ireland, I have had in place a scheme whereby new entrants may obtain a milk quota. This was one of the first times that this has been done. The Department is still paying out substantial funds under the farm installation scheme and under the early retirement scheme. The latter scheme has been suspended for new entrants, which is the position at present.

That is no way to treat farmers.

I have outlined clearly the Government's position with regard to CAP reform.

I wish to facilitate questions from each Deputy.

Moreover, the Government is clear with regard to the success thus far of the CAP as it has been and major reform is not needed.

I acknowledge the Minister's response with regard to capping and to the United Kingdom's position. It is clear the British would be against a cap for reasons arising from their monarchy, the Queen's progeny and the amount of land they own. Consequently, this would stand to reason. However, I refer to the flexibility arrangements about which the Minister has spoken. Does he refer to flexibility in the sense that there would be an envelope for Ireland regarding the greening aspect, whereby Ireland would have a degree of flexibility as to how it could spend such funds? Alternatively, does he refer to a degree of flexibility for Ireland with regard to the overall envelope? The Minister should clear this up.

First, I wish to ensure that it is a common policy but there should be flexibility within it. At any particular time, a sector or region could be under pressure. For example, in recent years the sheep sector has been identified by Members as being one that required assistance. Fortunately, the Department has been able to introduce a scheme this year to help that sector arrest the decline in flock numbers. However, I refer to a degree of flexibility that does not work against the common policy as such. In some of the larger countries, the French Minister in particular has spoken at length about this in respect of regions such as the Alps, some regions are regarded as geographic areas that need particular assistance and flexibility. Ireland may have a sector or geographic regions, such as parts of my native county and the west of Ireland in particular, that suffer a particular disadvantage. As Deputy Sherlock might expect, I disagreed with the British Minister with regard to his view about capping.

That is reassuring.

I also disagreed with the view on capping held by eastern European Ministers. The eastern European perspective is that a farm may have a large number of staff and that consideration should be taken of that point. However, on the greening issue, one could easily lose sight of the fact that cross-compliance is a highly important and worthwhile toolkit in maintaining the high environmental standards we have on our farms.

The four year plan refers specifically to "reduced expenditure on ERS [early retirement scheme] due to scheme closure". The Minister should confirm or deny that this is what is contained in the plan.

With regard to the schemes for young farmers, does the Minister intend to restore installation aid? It is important to continue with the raw material and lifeblood of farming, namely, the farmers. Finally, has the Minister communicated specific proposals directly to the European Commission as to what is the Government's position? Does one such proposal state clearly that the third option is completely out for Ireland because it is against our national interests in developing agriculture?

The Government is not only outlining clearly its view on the Common Agricultural Policy. Deputy Coonan would have heard me express my views at the Joint Committee on Agriculture, Fisheries and Food. He would have heard me discuss this matter with Commissioner Ciolos as well. I have outlined clearly the Government's position, which I believe is shared by Members in general, and its policy regarding the need to have a properly-resourced and adequate CAP and to have two pillars. First, direct income support is needed to provide some income stability to farmers. In addition, better and stronger market support measures are required.

The market management measures, be they intervention, aids to public and private storage and export refunds, will be essential in the future. In addition, the Government has argued that payment under the less favoured areas, that we in general refer to as disadvantaged areas, should remain in pillar 2 and that direct income support should be in pillar 1. In addition, the Government has argued that the rural development policy under that subheading, which is of crucial importance to give some assistance to on-farm investments,——

We have run well over time.

—— from the point of view of ensuring sustainable agriculture production and making us more competitive, is necessary in the future. The Government has reiterated this point repeatedly and will not deviate from it.