Reform of the Common Agricultural Policy: Motion (Resumed)

The following motion was moved by Deputy Michael Moynihan on Wednesday, 14 September 2011:

That Dáil Éireann:

notes that recent proposals being discussed on the Common Agricultural Policy (CAP) reform will have a detrimental impact on Ireland's agricultural sector and that the suggested introduction of a Single Farm Payment will cost thousands of jobs and decimate agricultural production by up to 30%; and

calls on the Government to immediately publish its proposals and position in relation to these matters.

Debate resumed on amendment No. 1:

To delete all words after "Dáil Éireann" and substitute the following:

—recognises the importance of the agriculture and food sector as a driver for economic recovery and export led growth;

notes the commitment of Government to the Food Harvest 2020 strategy and the progress in 2011 towards implementation of the targets as set out in the Food Harvest: Milestones for Success document published in July, 2011;

endorses the clearly articulated policy of Government to date in relation to Common Agricultural Policy (CAP) reform;

reaffirms the following key priorities in relation to the upcoming negotiations on the CAP on which formal proposals from the Commission are expected to be published in early October:

ensure that the vital role of the CAP in promoting sustainable and competitive food production is maintained and that a commensurate EU budget is provided to support that objective;

protect payments to Irish farmers and the agrifood sector under both Pillar 1 and Pillar 2 of the future CAP and to ensure that Ireland receives a fair share of available CAP funding;

provide appropriate flexibility to Member States to determine direct payment systems best suited to their conditions and to the future development of their agricultural systems; and

provide appropriate support for competitiveness and sustainability in food production in the rural development pillar of the CAP (Pillar 2); and

in this regard, notes and expresses its strong support for the efforts of Government to build alliances with other like-minded Member States in pursuit of these stated objectives.

—(Minister for Agriculture, Fisheries and Food).

Deputy Mattie McGrath

I welcome the opportunity to speak to this motion. I wish to emphasise the importance of our agriculture industry to our economy. During the Order of Business, the line taken by the Tánaiste was that the Government inherited our serious economic situation. It did, but everyone knew the economy's state long before the last election. The worsening situation is not news to anyone.

I welcome the jobs initiative and other actions taken by the Government in the previous session. I am a member of the Joint Committee on Communication, Natural Resources and Agriculture and am concerned by agriculture's future. At 53 years of age, I can remember two recessions. In both, the agriculture sector took us out of recession. With the onset of the so-called Celtic tiger 15 or 20 years ago, we took our eye off the ball and the sector was neglected. Despite the best efforts of farming organisations and others to retain a focus on agriculture, it was not a trendy subject compared with, for example, the construction industry. Agriculture was neglected and we accepted many bad European deals. None of this helps our current situation.

The number of family farms, in particular small ones, has diminished significantly. I note the Minister's amendment, in which he states the Government "recognises the importance of the agriculture and food sector". The Minister certainly does, as I was a member of the committee alongside him in recent years. Two days before the end of the last term, the House passed a European directive on land reclamation and planning permissions without debate and the Minister signed it into law yesterday. I could not believe that the House would do such in respect of an important directive. We receive all sorts of directives from Europe. We are being directed out of business. Successive Governments and officials have shown Europe the white flag. Each time it says "Jump", we ask "How high?". In many countries, directives and initiatives are not implemented after they are passed by their parliaments despite the threat of fines.

I question the role of the Department's officials. I do not want to knock officials per se, but I question their numbers compared with the diminished number of farmers. Why are so many officials necessary? They are trying to create work to keep themselves busy. That there are fewer farmers is not their fault and many of them do a great deal of good work, but there are too many. There is too much red tape and bureaucracy. It goes without saying that there is more traceability of animals than there is of humans. This is a sad situation. We need traceability and accountability, but the farming sector is being regulated out of existence by red tape. Health and safety regulations are important, but we have gone over the top and stark raving mad with regulations. We are zealous about implementing regulations down to their syllables and commas. We must consider where we are going with this.

While I support the Government's initiatives and the Food Harvest 2020 policy, it has not provided clarity on the Common Agricultural Policy, CAP, as it claims. CAP has been a vital resource for farmers and must be maintained. The issue of single farm payments is on the table and must be examined. It is outrageous that big business people who have farms as a hobby are getting up to €500,000 under this payment. Some ordinary farmers are also getting significant amounts of money. The money must be spread more evenly. Small family farms, horticulture farms and organic farms must be supported, as must farms in wetlands and on poor land. When land is reclaimed, a great deal of money is spent in the local economy. We passed the directive on planning permission. I do not recall its name, but everyone knows which one it was. Under it, if one wants to reclaim 30 sq m or a few hectares, one needs to have an environmental assessment conducted. This is a nonsense and an outrage. Even a basic assessment would cost €10,000 to €15,000 and would point out all types of issues to make more work for the officials in the Department.

We have lost our way. We have introduced too much legislation and there are too many directives, thereby affecting the common man on the ground, be he on his tractor or working with his hands. I refer to the farmers, who care for and nurture the land and its crops and animals. Their first love is protecting the environment and the land and they do not need all the regulations, inspection visits or threatening letters. Most of the letters threaten huge fines. Many letters from the Revenue Commissioners threaten imprisonment if one falls behind. We need to support the farming sector just as we support the business sector. We should remove the bureaucracy and let farmers do what they do best, namely, farm and produce food of the best quality. We were treated to the latter by the artisan food producers last week at the British embassy. One would not see this anywhere else in the world. Our produce is sought after and farmers must be allowed to continue farming, producing their crops and saving the land. We must remove the baggage.

Deputy Thomas Pringle

I welcome the opportunity to speak on this Private Members' motion. It arises from the document leaked from the European Commission this month that contains the basis of the Commission's proposals for the reform of the Common Agricultural Policy. It has been widely disapproved of by the farming organisations and has been condemned as unworkable. The Minister stressed in his contribution last night that the document is but a leaked document and that it will be changed radically before the final proposals are published next October. I believe, however, that the final agreement and proposals will be based on this document and that we now see the bones of the final agreement and what will be put before the Commission and the European Parliament for adoption.

I welcomed the Minister's contribution last night in which he outlined his priorities in respect of negotiating the CAP review. It is important that he outline these in the House. I welcomed his priorities in general.

Some of the proposals contained in the document, for example, those concerning the capping of single farm payments, do not affect Ireland greatly, as the Minister outlined. He mentioned there are only approximately six farmers over the capping limit. This should give us some leeway when negotiating some of the measures that are more important to Ireland, which measures are important to sustaining farming.

The measures concerning small-scale farmers are very important. In the north west, most farms are smallholdings that on their own would not be viable or large enough to support the small farmers and their families, yet they are a vital part of the fabric of rural life. While farmers may have to obtain off-farm employment to supplement their incomes, traditional farming is vital. It contributes greatly to the local economy, to sustaining the export industry and to the provision of food and livestock into the food chain.

The measures pertaining to young farmers must be welcomed in particular and should even be strengthened, particularly given that only 6% of European farmers are under 35 and that 5 million farmers are due to retire in the next ten years. There are over 8,000 applications for courses in Irish farming colleges but there are only 1,800 places available. This shows many young people see farming as a viable alternative and as having a viable future. They need the installation aid that can be provided to them under the CAP to ensure they can be supported and encouraged to get involved in their family businesses.

I thank the Minister for outlining his priorities in the House last night. The leaked document gives the bones of the final agreement on the CAP. There is much negotiation to be done still. The Minister needs to ensure that the measures pertaining to young farmers and smallholdings will be strengthened. He needs to ensure discretion will be retained by member states in determining how the benefits of the CAP can be allocated. He also needs to do a lot of work to ensure there will be as little red tape as possible, that the system will be as simple as possible and that everybody will be able to buy into it and get on with the business of producing food and driving our economic recovery.

Deputy Seán Kyne

I wish to share time with Deputies Patrick O'Donovan, Andrew Doyle, Liam Twomey, Pat Deering, Noel Harrington and Colm Keaveney.

An Ceann Comhairle

Is that agreed? Agreed.

Deputy Seán Kyne

I am pleased to have this opportunity to speak on this very important topic, namely, our indigenous industry of agriculture. Many are employed in the sector. It is an export industry and much of the profits are retained in the State. It is very important in a recession that we have a star sector, such as agriculture, and we hope to see it shining brighter and brighter over the coming years.

We are in the process of negotiating the CAP reform with the European Commission. The most important issue that arises at present relates to the future of the single farm payment entitlement. The entitlement was based on food production by farmers. In considering this, it is important that we acknowledge the paramount importance of our beef herd and suckler cows. The suckler cow number peaked at 1.2 million in 2005 and this coincided with the first year of decoupling. Since then we have seen a gradual reduction in the suckler cow number, which is worrying. Some attempts were made by the last Government to combat the reduction through the introduction of the suckler welfare payment of €80. Unfortunately, this was halved to €40. The €80 payment was to halt the reduction in the suckler herd number and return some confidence to the industry. With the halving of the payment, that confidence was reduced again. Thankfully, this trend reversed slightly in 2010, perhaps due to a number of circumstances, including the reduction in the number of part-time farmers working in the construction industry. Farmers now have more time to spend on their farms and, therefore, may be returning to suckler cow farming.

We will have a huge challenge and opportunity from 2015 with the removal of quotas. This will lead to an expansion of the dairy herd, resulting in added value in the dairy sector. Milk powders, cheese, infant formula and such products will be considerably important to our export industry. The current status of the agri-food sector represents a good news story. While this is all very positive for the dairy herd and will result in an increase in by-products, such as beef cattle, it is important that we ensure during the period of expansion in the dairy herd that the suckler herd is not downgraded.

Consider the statistic that the output of a suckler cow amounts to €1,000, which may be a conservative figure. We have seen the herd number drop from 1.2 million to less than 900,000, a reduction of 300,000. This has a knock-on effect on the economy and exports and we must ensure the trend is reversed as much as possible.

I welcome the Minister's comment that member states will have flexibility to determine the direct payment system best suited to themselves, rather than having one system imposed on all countries. There are negotiations on this and there will be divisions within this country. There will even be divisions within the IFA on what is best for farmers.

Coming from Connemara, I realise the disadvantaged area payments are very important to the farming community. It is also very important that a basic rate of payment be maintained for the farmers and that there be a proper compensation mechanism for farmers whose farms are designated as SPAs, SACs and NHAs. The REP scheme was very lucrative and it was closed to new entrants after 2009. The agri-environmental options scheme, AEOS, was introduced, but many farmers feel it is not adequate for these areas. It is very important that next year's budget puts in place an AEOS scheme for these areas which are designated in Connemara and along the west coast. I urge the Minister to ensure that Natura and designated areas are looked after in the next budget by ensuring an AEOS scheme exists for them.

I also wish to speak about areas of restriction such as the Twelve Bens in Connemara, and I note the Minister for Arts, Heritage and Gaeltacht Affairs, Deputy Deenihan, is listening intently to this debate. Farmers in these areas have had restrictions imposed on them and have reduced their stock numbers. It is important that these restrictions are ended and that the farmers are allowed to expand their flocks.

Deputy Patrick O’Donovan

I welcome the opportunity to speak on the motion. Like the previous speaker, agriculture is by far the most important indigenous industry in the constituency I represent. The Minister, Deputy Deenihan, will know, given that he is a neighbour, that the land quality of County Limerick varies quite considerably from east to west as do the size and viability of land holdings and farms.

I wish the Minister and Ministers of State for Agriculture, Fisheries and Food well in their roles. I welcome this opportunity provided by Fianna Fáil to discuss the upcoming CAP reform proposed by the European Commission. Every speaker will make the same point about the importance of agriculture to the local economy in his or her constituency. In my area, this importance cannot be underestimated with regard to milk, beef, suckler herds and poultry and there is massive dependence on agriculture. While the Government has inherited a considerable number of problems in many areas, the previous Government was not all bad when it came to agriculture and this needs to be put on the record. It did many positive things, although it also left many gaps, the most obvious one being the AEOS.

The national contribution of agriculture cannot be underestimated. It is worth €80 billion to the national Exchequer on an annual basis and supports more than 125,000 families. It must be placed at the top of the agenda with regard to the country's economic development. In my first contribution to the Dáil after having been elected I cited the importance of our indigenous industries, namely, agriculture and tourism. I am glad people working in the relevant Departments have a vision for both sectors. The Minister, Deputy Coveney, referred to the development of new and existing markets and one need only look to the Far East and the demands that will be made by burgeoning populations in south-east Asia, the Indian subcontinent and China for good quality food products. The one place to which all of the emerging economies will look is Ireland because we produce safe, traceable and green high-end food products which have high value. We know the industry and we can deliver effectively.

Deputy Kyne is correct to welcome the fact the European Commission is finally allowing some discretion in the internal management by each member state of the schemes. As previous speakers stated, farmers are being strangled by bureaucracy. We must address the need to allow farmers to farm by decoupling — to rob a word — administration from production to a certain degree and allowing people to do what they are good at, which is to produce a high-end quality product.

Previous speakers mentioned national branding and it is not something one can underestimate. Brand Ireland is very strong and those in my constituency would like to see the development of this brand for the poultry industry, so that we do not have imports coming into the country, having value added and being labelled Irish. This is a discrepancy which needs to be addressed.

I am sure Members on all sides of the House have met young farmers seeking to expand their enterprises. These people have a get up and go mentality and do not want to stand still. Difficulties exist with acquiring additional milk quota. The schemes outlined by the Minister are well and good but additional flexibility and discretion are also required, perhaps at local level. If a younger person entering farming can show he or she has the capability to deliver a product and come in on target and on quota he or she should receive a fair hearing and attempts should be made to accommodate that person.

I wish the Minister well. I thank the Opposition for this opportunity to discuss the CAP. It is very important and we on this side of the House will do anything we can to be supportive.

Deputy Andrew Doyle

This is a timely opportunity to discuss the CAP. As Deputy Moynihan and others know, the Joint Committee on Communications, Natural Resources and Agriculture prioritised three areas for its work programme between now and Christmas. The CAP negotiations is one of these areas.

For many years, the CAP was seen as a burden that had to be endured by many and an unnecessary sop to the European agricultural community. A communication from the European Commission in November 2010 stated a strong future CAP would be based on two complimentary pillars with three strategic aims of preserving food production potential in the EU, sustainable management of natural resources and maintaining viable rural areas. At long last, the EU has recognised the importance of the CAP for these reasons. Ireland ticks all the boxes because we measure up to all of these requirements better than most. However, we cannot be complacent about this. The principles on which the CAP is to be further funded are ideally suited to Ireland. This is not to state that if we leave it at this we will get that to which we feel we are entitled.

We have heard much about the importance of the agri food sector to Ireland. We have heard statistics on increased output, exports and production and they are all true. However, we need to be mindful that increased commodity prices, in particular for a primary producer, do not always mean increased profit. Serious pressures exist on farm profit margins. Many years ago, when agriculture was supposed to have been booming, a car sticker stated there was money in agriculture but not in farming. At one point, everybody made money except the farmer. This may be an exaggeration, but everybody was getting a piece of the action. Over ten years, people at the ploughing championships could have been forgiven for thinking they were not in the country of the Celtic tiger. Those involved in the agri food sector who will attend the championships next week might feel they are not in the country of doom and gloom.

The Fianna Fáil motion calls for the Government to publish its proposals but I do not think this is wise. In his address, the Minister outlined the areas highlighted by the so called "leaked" document. We knew about some of them but others are new. We knew a measure on greening would be included but we did not expect the suggestion that 30% should be reserved for greening measures and we should not support it. In so far as he could, the Minister outlined his position on the leaked document without putting forward proposals. Negotiations will have to take place to line up with other member states. An example is where capping will not affect us but may affect other states, in particular Germany and the United Kingdom, and we may need to work with them. I am interested in payments for areas of natural constraint which would be in addition to payments for less favoured areas. This shows the Commission is alert to its basic principles of promoting sustainable rural resources and protecting viable rural areas. This particular proposal recognises there is a need to allow people to continue to farm in Natura areas and to compensate them for that.

The agriculture committee in the Thirtieth Dáil, under the chairmanship of Johnny Brady, presented 12 key recommendations, unanimously agreed by all parties, to the Commissioner when he attended the committee last year. On determining national envelopes, the committee's report recommended:

"Ireland should also seek, irrespective of whatever method is ultimately agreed for the determination of national envelopes, the maximum flexibility to distribute the Irish national envelope in a manner best suited to Irish circumstances."

That sums up what we want to achieve in the Common Agricultural Policy negotiations.

Deputy Liam Twomey

As the Minister for Agriculture, Fisheries and Food stated last night, there are still no detailed proposals from the European Commission on the future of the CAP and they are not expected to be published until next month. This debate may, therefore, be a little premature. Working off leaked documents is not always the best way to go forward. The Minister and his officials will fight our corner well in the negotiations with other European countries. The addition of newer member states in the next round of CAP reforms will make these negotiations more difficult. It would be rather foolish of the Minister to give away his hand as to how he will approach the negotiations on behalf of the State at this stage.

Ireland has a massive role to play in food security, not just for Ireland but also for Europe. Ireland has excellent biodiversity with good land management while there is still large potential for growth in the bio-economy. The agrifood industry is well developed, diversified and achieves high standards. Food Harvest 2020 is an excellent strategy document to develop this industry. It did not, however, get the credit it was due when it was published because of everything else going on in the economy at the time. It lays out where growth can be achieved in beef, pork and milk production and aquaculture.

Apart from what the CAP reforms will bring to Irish agriculture, there is much we can do ourselves. A large number of State agencies are involved in the agrifood industry which comprises large companies such as the large co-operatives down to small artisan producers. They are all involved in getting the best outcomes from our agricultural sector. We must start to get these organisations to work more closely together to maximise the best outcomes. While there is a need for the larger companies to maximise their profits, emphasis must also be put on research and other innovations in the agrifood sector.

Farmers, by nature, are extremely resourceful. The Government has a strong role to play in assisting the agrifood sector but we must also let it get on without too much regulation. Irish agrifood products are recognised across the world for their high standards due to good regulation. When food regulations break down, as at the time of the dioxin scare in the pork industry, it can have a massive knock-on effect on the market credibility of Irish food produce. It is important, therefore, to maintain good regulation and high standards. There will always be a debate as to whether the industry is being over or under-regulated. We need to have a realistic debate on this issue and not give in for the free-for-all for which some are calling.

A focus must be put on current problems with milk production with milk quotas and the superlevy. The markets will change in 2015 but many farmers expected greater potential in the milk production area and may have expanded too much before time. We must ensure we achieve a solution in the CAP reform so as not to slow down our milk industry and affect the potential to expand after 2015.

I see much potential in the agrifood sector. I have full confidence in the Minister, Deputy Coveney, to do the right thing for us in Europe. There is a necessity, however, for us to examine the industry from within and see how we can maximise the industry's potential to grow returns for the family farm and jobs.

Deputy Pat Deering

As in previous recessions, agriculture has come to the forefront in attempts to kick-start the economy. It has been the good news story for the economy in past several years. Agricultural incomes have increased by 31% in the past 18 months, albeit from a low base while dairy exports have increased by 47% in the past six months. Cereal production outlooks are also promising for the coming year. Agriculture will, accordingly, play a key role in kick-starting the economy.

It is important that what is already there is protected. In good and bad times, the agricultural industry, and farmers in particular, will not be afraid to spend. As Deputy Doyle said earlier, next week at the national ploughing championship we will see a renewed enthusiasm in the agricultural sector for spending money on machinery for example.

There are many opportunities, particularly in the dairy sector. Dairy farmers are already looking forward to a rapid increase in production over the next several years. They have shown a resolve to get over the current difficulties with quotas and the superlevy will be an issue. At the same time, they will meet the Food Harvest 2020 targets set for them. As we approach 2015, it is important flexibility be shown towards the milk quota to ensure dairy farmers who may be in difficulty have a soft landing.

Another area for opportunity is the sugar beet industry. It is ironic that Deputy Moynihan's colleagues sounded the death knell of that industry. Coming from what is regarded as the spiritual home of the sugar industry, Carlow, I see renewed opportunities in it. In the next few weeks feasibility studies will be published which will show the sugar industry, in conjunction with the bio-fuel industry, will have a viable future. We learned from the leaked reports of the CAP reforms that there may be no sugar quotas after 2016. This will remove all obstacles and allow the sugar industry to be revived in this country, providing jobs and opportunities for farmers to better practise crop rotation.

As we approach the CAP negotiations, I compliment the Minister for Agriculture, Fisheries and Food, Deputy Coveney, for his enthusiasm and recognising that young farmers will play a key role in agriculture's future. While there is a low proportion of young farmers, in the past year it has become sexy to get involved in agriculture again. More young people want to get back into agriculture as shown through increased applications for agricultural college. It is important young farmers play an important part in agriculture and more places are made available to them in agricultural colleges to allow them develop the required skills in this field.

I wish the Minister every success in the negotiations. We are fortunate that as the negotiations move towards the important stage, it is likely this country will have the Presidency of the European Commission in the first six months of 2013. That is important for future outlook and results.

Deputy Noel Harrington

I too welcome the opportunity to speak on the motion, which is especially important to me coming from the rural constituency of Cork South-West. I thank the Fianna Fáil group for tabling the motion. I do not agree with its general tenet but it is clear that all parties in the Chamber recognise the important role played by the agricultural sector and its importance in the future recovery of the economy.

It is regrettable that in the past ten or 12 years when the Celtic tiger was roaring that agriculture seemed to be deemed less important. It was one of the forgotten relations, particularly by key decision makers, economists and movers and shakers in the country. It suffered because of that fact especially in comparison with the construction industry. Agriculture has been the bedrock of this country. It is what we are good at and what we should be trading internationally. I very much look forward to how this country negotiates the Common Agricultural Policy for the better development of the agriculture industry in the next two years. The industry has done much in the past 20 years to improve its position in worldwide agricultural terms through technology, transparency, animal husbandry and breeding programmes. They are long-established and slow-burn investments that are bearing fruit now.

The maintenance and husbandry of the land is especially important in disadvantaged areas. All of that must be taken into account in future negotiations on the Common Agricultural Policy by the Minister and his officials. In a climate where the European Union is grappling with emerging nations and new entrants into the Union and subsidies are directed at disadvantaged areas it is important nationally that we support areas of disadvantage elsewhere. A parallel process should be taken at European Union and national level. That is not taken into account in the motion. We are being led to believe that the overall package of subsidies is not being changed much. A reduction of 30% in more affluent areas will have a knock-on benefit of 30% in disadvantaged areas. It is about redistribution of the subsidies and supports. I would not like to think that parties that set themselves up as being supportive of small farmers and disadvantaged areas would now turn their back on them because of something that was perhaps inadvertently put into a motion. I do not agree with that. I would prefer to see small farmers and disadvantaged land owners continuing to receive supports they deserve.

It is critically important that we target supports towards young, energetic, active farmers and food production. I wish the Minister and his officials well. They have built up a unique expertise in negotiations on the Common Agricultural Policy. I look forward to signing off on the significant negotiations probably during this country's EU Presidency in 2013.

Deputy Colm Keaveney

I welcome the opportunity to speak on the motion. The agricultural and agrifood sectors are playing a key role in this country's export-led recovery. The positive growth in the sector in 2010 which has continued into 2011 with output in primary agriculture and agrifood exports is far outpacing other areas of the economy. As the previous speaker indicated, more than any other industry the benefits of agriculture, both economic and social, are widely dispersed throughout the country. Farmers and farm families spend approximately €8 billion per year in the economy both on farm inputs, services and household expenditure. Agriculture and the food industry support 300,000 jobs across the economy.

I welcome the Minister's comments last night on the strategic approach to how we will tackle the upcoming Common Agricultural Policy reform measures. Farm schemes and investment programmes which include REPS, the suckler cow scheme and the disadvantaged area schemes are vital to underpinning agricultural production, improving competitiveness and maintaining the viability of farms. In that regard I had the honour of meeting with the county executive of the IFA in Galway. We had a professional engagement about its concerns. I come from an area that relies heavily on the disadvantaged area scheme. I note that the Commission is currently conducting a review of the disadvantaged area schemes. It is an important issue for this country as the total area designated as disadvantaged is approximately 75% of the total land mass of the country. From an economic perspective the less favoured area scheme is of particular concern to me. I urge the Minister to pay special regard to payments for disadvantaged areas and the effect they have especially on the distributional nature of income and revenue.

Coming from a rural town I see the benefits to the economy generated by agriculture in that when a farm is doing well the community is doing well. A farmer will honour his or her debts and will spend money in the local shop and on back to school requirements. We must underpin farming income in disadvantaged areas in particular. I urge the Minister to pay particular regard to that in the upcoming negotiations.

Deputy Dara Calleary

I wish to share time with Deputies Kitt and Kirk.

Acting Chairman (Deputy Joanna Tuffy)

Ten minutes each. Is that agreed? Agreed.

Deputy Dara Calleary

I thank my colleague, Deputy Moynihan, for giving us the chance to discuss the issue. We are on the cusp of receiving the formal proposals from the Commission on the agricultural industry. Many Deputies outlined the economic importance of the industry. It is important that the Oireachtas has a chance to reflect on it and to discuss the leaked proposals that emerged in August. It strikes me as odd that whenever we debate agriculture it is always rural Deputies and those from rural constituencies who contribute yet when one considers the size of the sector and its impact on the economy it is clear that agriculture is not a rural issue, it is a national one.

Deputy Colm Keaveney

Hear, hear.

Deputy Dara Calleary

Were any other sector about to undergo the changes and challenges faced by agriculture with the reform of the Common Agricultural Policy we would have queues of Members to speak on it. I could not help but notice the rush of urban-based Deputies to the Shelbourne Hotel in July when there was food on offer. I thank the IFA for that. Those of us from rural constituencies get to pay it back this time of the year when we get summoned to IFA meetings. I encourage those urban Deputies who rushed to the Shelbourne Hotel to go to the ploughing championships next week to find out where the food comes from but also to take an interest in the sector because any industry that is contributing what agriculture is to the economy deserves to be taken more seriously, in particular in view of the future challenges that lie ahead.

Everyone has recognised Harvest 2020 as a fantastic document. I pay tribute to the former Minister, Deputy Brendan Smith, for the work he and his officials did in that regard. In the past two years, albeit that we are coming from a difficult base, there is a sense of self-belief in agriculture that could well be adopted by other sectors which could look at agriculture and learn what they need to do in the economy currently. The sense of belief and growth in incomes is now coming under a cloud. The proposals that were leaked in August are giving rise to serious concern. We need a more open debate on the Government's engagement in the talks. Deputy Andrew Doyle referred to the work carried out by the former Joint Committee on Agriculture, Fisheries and Food. A significant amount of work has been done to get us to this point. What we need now is active engagement from the Minister not just at committee level but within the main Chamber in the coming months as proposals are tabled. That is important given the size of the industry.

In reference to the proposals that emerged in August the IFA estimated that there could be a cost of €1.25 billion to Irish GDP. There could be potential income cuts of up to 50% as payments are redistributed across the country by 2019.

One can consider that the incomes of many who may lose payments are already below the average industrial wage and even when incomes are higher, it is a very challenging scenario.

The Minister outlined his priorities in the negotiations last night but I did not get any sense that the potential redistribution for incomes within the country was necessarily on his radar or causing particular concern. Is the Government conscious of the redistribution of income within the country? There may be national discretion on the issue but we must give a sense to people of the potential of the August proposals. The European Commission played the trick of leaking this in August when it believed everybody was away but we should consider the potential of those proposals for distribution of income within this country, particularly away from the BMW region. It is a serious matter and the Government should keep it under watch.

Deputy Keaveney spoke earlier about the disadvantaged area payment. I implore the Minister to ensure that the payment is not affected by any cuts that may come into the Department in the coming budget. It took a big hit in 2008 and it is the difference for many people, particularly farmers on the west coast, in keeping people on a farm as opposed to them walking away. I hope that within the Department there is an appreciation of the importance of that payment.

Greening proposals were outlined in pillar I, with 30% of that funding allocated, and they give me some cause for concern. Everybody supports the sustainability of the industry but no sector has done more for greening or the environment than the Irish farming sector. We can consider the amount of land gone into special areas of conservation and specific designation for various animals. There have been costs and sacrifices made by farmers to this end. The proposals and potential red tape arising from them must be managed carefully. Retention of pasture and crop rotation have been evident in the work of farmers for some time and if we are to put further demands, quotas and restrictions on farmers and the use of land, how can we put Food Harvest 2020 up as a document whose aims can be achieved?

We must align our ambitions and aims as outlined in Food Harvest 2020 with the negotiation strategy for CAP reform, as one is utterly dependent on the other. Unless we do this we may as well rip up the Food Harvest 2020 document now and not even talk about it. The Minister might have a chance to outline the Government's ideas on the greening proposals, how much red tape is involved and whether parts of the country could be designated under the proposals.

One of the issues we should welcome is the funding promised for research and innovation, with €4.5 billion targeted for agriculture research. We should be especially excited about this in Ireland, as we have seen many innovative food products come from this island. Many are household names across Europe and provide employment through manufacturing as well as income for farmers. We must also devise a strategy to target other funding in the research and development portfolio. We should use the influence of Commissioner Geoghegan-Quinn to ensure that agriculture and agriculture research gets a share of that cake. We should not just focus our efforts on the CAP reforms as we can reinvent food and farm incomes by using such money.

I have noted the proposals under rural development and we must use the occasion of this review to consider that topic. We have created an industry in rural development in this country since 1991 and we must ask if the massive number of companies around the country are still fit for purpose. Do we still need all of them? We saw the debacle last week involving Meitheal Forbartha na Gaeltachta Teoranta and we must consider how much money is being diverted to these companies that could go to projects on the ground. Some Deputies have referred to rural enterprise and people looking for funding who avail of Leader but we must try to focus that programme on enterprise and job creation. This review may afford us the chance to have an honest look at that area.

Payments to young farmers are absolutely crucial. One of the mistakes made by the last Government was the cancellation of installation aid. Young people are returning to farming but we must give them financial supports, as we do with back to work or enterprise payments when a business is being set up. We must try to amalgamate that kind of thinking with farm supports for younger people. It is important to sustain the industry and we also have a serious problem with farm safety. Until we reduce the age profile of the people running our farms, that problem will remain for much time.

There has been much comment that this debate is coming too early and the Government should not publish a strategy. Last night, the Minister outlined some general proposals for areas on which he would focus; he was far too general and we must get a sense from the Government that it is taking the issue seriously. I have no doubt that individual people are taking it seriously. Commitments on issues such as negotiations on the next EU budget framework and delivering a well-resourced CAP to support sustainable food production in the EU are the stuff of motherhood and apple pie. We all want it but how will it be achieved and what is the negotiation strategy? We are not asking the Government to show its deck of cards but how is the issue being pursued? How are we looking to retain Ireland's funding for direct payments and rural development? Everybody would sign up to that idea and although the Government does not need to show us its deck of cards, it must give a sense that there is a plan within the Department for managing the process. When these proposals are published in October, the Department should be in a position to give us an idea on its response. The genuine fear in many farming families arising from these proposals should be dealt with immediately.

I wish the Minister and the Department well but it is important, given the importance of agriculture to the general economy, that the Government ups its game in the negotiations and particularly involvement of the Oireachtas in those discussions.

Deputy Seamus Kirk

I am grateful for the opportunity to make a few observations in this important debate. Food exports from Ireland grew last year by 11% and were valued at approximately €8 billion. The Government's target is grow this figure to €12 billion by 2020 under the Food Harvest 2020 report goals. At this point it would be appropriate to pay tribute to the former Minister responsible for agriculture, Deputy Brendan Smith from Cavan, who was primarily responsible for the introduction of this projected growth potential for the Irish agricultural policy.

When the Common Agricultural Policy was developed, there were six main aims and objectives to be achieved. It looked to increase productivity by promoting technical progress and ensuring optimum use of the factors of production, including labour. It sought to ensure a fair standard of living for the agricultural community, stabilise markets and secure availability of supplies for the consumer community, providing consumers with food at reasonable prices. The aim of the Common Agricultural Policy is to provide farmers with a reasonable standard of living and consumers with good quality food at fair prices while preserving rural heritage.

Ireland has benefited enormously from the Common Agricultural Policy, with the agricultural food sector in Ireland contributing a value of €24 billion to the national economy, generating €6.3 billion in gross value added and over 7.4% of national employment. Agriculture provides 60% of employment within the agrifood sector. CAP reform is an essential part of sustaining that arrangement.

In 2004, Ireland received a net income of €1.4 billion from the EU and in 2010 this declined to €500 million. CAP reform forms the bulk of income received by Ireland from the EU budget. Direct payments for farming in 2009 averaged €17,109, accounting for 36% of gross output and 143% of family farm income. Those statistics alone illustrate the importance for agriculture in Ireland of underpinning the Common Agricultural Policy. Ireland's pillar 1 and pillar 2 payments per hectare are below the EU average. Ireland receives 2.9% of the single payment fund funds in the CAP pillar 1 budget and it receives 2.6% of rural development scheme funds under the CAP pillar 2 budget.

The first CAP reform in 1992, known as the MacSharry reform, coupled with the inclusion of agriculture for the first time in the General Agreement on Tariffs and Trade, GATT, forced a major change in traditional European farm support systems. The decoupling of production and European support and the introduction of environmental measures marked the first fundamental reform of the CAP system. In November 1997 the "European Model of Agriculture" was introduced that significantly broadened the concept of a farmer's role to include maintaining the landscape, bio-diversity and so forth. The vision in this model underpins the CAP. The Agenda 2000 agreement further advanced the decoupling of production and income support. The Luxembourg agreement of 2003 essentially dismantled the linkage between direct payments and production. This was known as the Fischler reform. The single farm payment on a historical basis is adopted by Ireland.

With regard to the CAP after 2013, the EU budget is under significant constraints with growing political demands for spending in other areas such as research and development. With the accession of the new member states there are an additional 7 million farmers in the EU. The CAP after 2013 will reflect these new demands and changes. The future reforms are aimed at addressing the three major challenges of food security, environmental impact and territorial balance between rural and urban areas. The current spike in food prices globally, caused by rising demand for meat in growing economies such as China and India as well as the impact of bio-fuel production, has generated uncertainty about food security for the future. The global fears about food security form the backdrop to the current proposals for CAP reform.

The Commissioner for Agriculture launched the CAP post-2013 reform with a communication on possible future CAP models in November 2010. The "CAP towards 2020"communication was formed in the context of the broader Europe 2020 strategy that guides the future of EU economic and social development. The future reforms are aimed at addressing the three major challenges of food security, environmental impact and territorial balance between rural and urban areas.

Under these proposals the Commission appears to be committed to dismantling previous entitlements and starting afresh with a new basis payment. What type of disruptive impact will this have on Irish agriculture and farmers, following the 2005 confusion over entitlements? At least 50%, after greening and all the other deductions, is paid on a per hectare basis, based on the land submitted in the first year of the scheme as the Commission shifts away from 2002 entitlements. There are deadlines of 2019 for countries and regions to move from historical towards regional area payments "in linear reduction steps", as it is termed, and the end of 2028 for payments to move to a single flat rate across the EU. The proposals seem to imply limited flexibility on a flat rate payment across the regions. What implications has that for the underpinning of the Irish agriculture industry?

The proposals include a 100% cap on payments from a threshold of €300,000, with a claw-back of between 20% and 70% on a sliding scale for payments between €150,000 and €300,000. Direct aid will only be paid out to recipients who obtain at least 5% of their income from agricultural activity. Is this a sufficient definition of an active farmer? Given the evolutionary changes that have taken place in the industry it is vital that the definition of an active farmer in the final agreement is clearly laid down to ensure there are no grounds for misinterpretation.

It is proposed that member states set aside up to 10% of their ceilings for financing a lump sum scheme for small farmers, involving reduced environmental requirements. Payment is proposed to range from €500 to €1,000. Young farmers should benefit from an installation aid fund limited to their first five years and funded by up to 2% of a member state's ceiling. In the last few months there was a virtual scramble for places in agricultural colleges. We clearly made a mistake when we closed a number of the colleges, particularly the college in Warrenstown in the Minister of State's constituency. Its availability at this time would be of huge benefit to young farmers not only in the north east but further afield. There could be specialisation in these colleges, be it in Ballyhaise or Warrenstown, but we no longer have that choice. We must work within the constraints of the inadequacy in the number of places and the availability of lecturers and tutors in these colleges. I am sure the Department of Agriculture, Fisheries and Food is examining this issue as it is vital for the future of the industry.

The age profile of the primary producers in this industry has gone the wrong way; it is the wrong side of the age scale. We need a regeneration process, with young farmers coming into the industry, if we are to avail of the clear potential that exists to develop agri food exports from this country. Agri food exports is the ultimate means for national wealth creation, particularly in the case of dairy products. In the dairy sector individual farms can produce milk but not to unlimited levels. We are currently in an unsatisfactory position where the milk quota system is due to be phased out by 2015, but there is no transitional arrangement in place.

We have the ludicrous situation where many farmers, including in Louth and Meath, will be adversely affected next March while north of the Border farmers will be well under the allowable production thresholds under the quota regime in the UK and Northern Ireland. A strong and compelling argument can be made for a bilateral arrangement between this country and the UK to ensure that progressive, hard working, committed and indebted young farmers in this State are not lumbered with a severe super levy bill at the end of March next year. The Minister is from an agricultural background and has a personal understanding of the issues involved. I believe he would agree with the sentiments I am expressing. The need to address the quota system is the biggest single challenge facing the agriculture industry at this time. We need a transitional arrangement between now and 2015.

In the context of the wider issue of EU support to get this country out of its difficult economic circumstances, there is one sincere and genuine way in which it could help us, and it will not cost the EU. The quota is available and the EU could allocate it to farmers in the Republic of Ireland so they could produce milk to a much higher threshold and ensure that our export statistics will be even greater next year and into the future.

Deputy Michael P. Kitt

I welcome the Minister of State and thank Deputy Moynihan for tabling this motion. It is a timely motion and mirrors the concerns among farmers throughout the country. Deputy Kirk correctly referred to the milk quota, an issue that arises at many IFA meetings.

I attended a meeting in Athenry last week with my colleagues in east Galway. On the agenda was the budget, a matter we discuss every September with our colleagues in the farming organisations. However, in addition to that, farmers were very concerned about schemes such as the rural environment protection scheme, REPS, and particularly REPS 4, the agri-environment options scheme, AEOS, the disadvantaged areas scheme and the suckler cow welfare scheme. There was concern about issues such as septic tank regulations and the planning and development regulations relating to farm improvements, particularly in wetlands. There was even a reference to turf cutting, a major problem in many parts of the country. I realise it is not within the remit of the Minister's Department but he will be aware that there is much uncertainty about what will happen in the future with regard to turf cutting. All these issues are emerging at IFA and ICMSA meetings. In having this debate in the House, we have the opportunity to raise these issues and, hopefully, to get a positive response from the Minister and the Minister of State.

The most important issue raised by farming organisations is the fact agriculture and the food industry support 300,000 jobs throughout the economy. That should be of concern to everybody in the country. It is not just an issue for the farming sector. I am sure our Deputies, Senators and MEPs will continue to raise the importance of agriculture, the fact it has been doing well and that we want to support what was supported by the last Government and has been supported by the current one up to now.

I was very interested to look at the proposals at which we were looking this time last year. The issues farmers raised were farm schemes and taxation measures. The priorities for farmers are the same this year as last year. In last year's budget, despite cuts made in previous budgets, there was a good response by the previous Minister for Finance and the previous Minister for Agriculture, Fisheries and Food, Deputy Brendan Smith, to holding on to the schemes. There were some changes but the Minister did quite well in that regard and in regard to the taxation measures. I hope we can build on that because the agriculture and food industry is a major employer and the 300,000 jobs throughout the economy must be supported.

When I hear talk of CAP reform, I think, in particular, of Ray MacSharry and the work he did as Minister and as Commissioner. It was a major change to the traditional European farm support system. Coupled with the General Agreement on Tariffs and Trade, it was a major change in terms of the way we look at agriculture today. It is very important for our younger farmers, in particular. I am glad the Minister referred to the issue of payments to young farmers. If we can support young, trained farmers, we will get a great return for the economy and, indeed, promote a way of life in which people are now very interested.

There have always been threats to the agricultural colleges, to which other speakers referred. Mountbellew Agriculture College in my constituency in County Galway, which was founded by the Franciscan Brothers, has been under threat. The community and all politicians went to Oak Park in Carlow two years ago to try to fight for the college. The figures now show there is a waiting list in Mountbellew as there is in other colleges, such as Pallaskenry in Limerick and Gurteen in Tipperary. It is the first time I have seen students from Galway go to other colleges because there are no places for them in their local college, although it is good that they can get a place elsewhere.

Teagasc has given extra teachers to Mountbellew and I compliment it on that. It shows the importance Teagasc is placing on the training of young farmers. This college, which was founded more than 100 years ago by the Franciscan Brothers, is getting the support it must get because the religious orders will not be there forever, although they will do their best while they are there. Teagasc is being very positive in helping to maintain courses and in supporting students doing various courses in the college.

I am concerned about the comments on the greening component. There are major worries about bureaucracy and red tape. I am glad the European Parliament is taking a particular interest in pressing for changes to be made which will be positive for Irish farmers and, indeed, for farmers generally.

There is great interest in environmental measures. The REPS, the AEOS and the various schemes in place have been successful. I would have liked the Minister to have had more money for AEOS. He told the House he had to fight hard for the money there but more money should be made available. I hope payments will be made quickly under those schemes. I am not sure that if one makes things very specific, such as specific types of fencing, one is helping the situation. The scheme under those environmental incentives should be more general.

The Dess report produced by the European Parliament, of which the Minister is a former member, was very positive. Following the Lisbon treaty, the role of the European Parliament should be significant. An issue it raised about putting a limit on the amount an individual farmer can get is very important. The problem has been that too many non-farmers are getting significant money and we are worried about that. There has always been the argument that 80% of the grants go to 20% of the higher earners. I would be disappointed if that continued.

I am glad we are having this debate. In particular, I wish the Minister well with Food Harvest 2020 which the former Minister, Deputy Brendan Smith, promoted strongly. That is the obvious place where extra jobs can be provided. The most recent document I got from the IFA talked about a policy framework for supporting rural Ireland and the Irish countryside. It mentions a place for living, working and for enjoyment. One rarely hears people talking about enjoyment in agriculture, especially at a time when the president of the IFA states that farmers only get half the industrial wage. However, it is a positive way to talk about enjoyment of the Irish countryside. I hope that with the efforts of Minister and the Government, there will be enjoyment and support for and confidence in Irish agriculture.

Minister of State at the Department of Agriculture, Fisheries and Food (Deputy Shane McEntee)

This is our first week back and it is fantastic we are talking about something good, namely, agriculture. I welcome this debate on agriculture in that we all have a big part to play. I refer to the targets for 2020 and the leak which took place during the summer. I was delighted with the leak because it will focus everybody on reality.

The Minister, who has experience in Europe, will ensure the maximum amount of money will come to Ireland for Irish farmers. I know from the meetings I have attended that it will be distributed to the right people who want to produce food, whether in the north, south, east or west of Ireland. That is what everybody wants and that is what we intend to do.

I spent much of the summer visiting meat factories, etc., and the demand for food throughout the world is unreal. Agriculture has always been our number one industry, even in the boom times when perhaps it was kept on the back burner. We must reach the 2020 targets. That will be done with everybody's input, whether the Opposition's, the Government's or the IFA's which has many decisions to make on the payments and the way they are made. It is good to debate this now and then send our Minister who has experience and will come back with the right answer for Irish farmers.

I have been a dairy farmer all my life. As mentioned by everybody, September is always the best month for a farmer to rectify his or her quota. I have seen farmers crucified in the month of April or May with a massive fine. The dairy farmer is different from any other farmer and has a different mentality. He or she is like myself in this job or the teacher in that he or she expects to get paid every month whereas a beef farmer gets paid every three or four months or whatever.

However, if farmers dry up their cows now or a month earlier, they will be one month without a milk cheque. A business decision must be made at this stage to sell in-calf heifers. Most important, cows should be scanned and those not in-calf can either be sent on to the trade or fattened up. In the latter case, farmers will have them when they have no milk cheque. Farmers know that ruthless business decisions must be made. From as early as May, when we knew we were going to hit a massive quota problem, the Minister and MEPs were fighting our corner right across Europe. Europe is 6% under quota and, north of the Border, farmers can produce all the milk they like. Something has to give but there is no guarantee that it will happen this year, so farmers need not stake their lives on it.

I agree with Deputies that in advance of 2015 we must not pull the rug from under young farmers. The most important survey on young farmers I have seen this year was undertaken by Macra na Feirme. They do not want to be paid for doing nothing; they want to get into production, which is what 2020 is about. That is the point I want to get across.

The recently published "Food Harvest 2020: Milestones for Growth" demonstrates the progress that has been made over the last year towards achieving the targets set out in the Food Harvest 2020 report. Reflecting on both that progress and the personal interaction I have had with thousands of farmers and other industry stakeholders throughout the country, I share the confidence and optimism that is evident throughout the sector.

That said, none of us is complacent about that progress made or the future that lies ahead. Just as there are undoubted opportunities, so too are there undoubted challenges. The CAP has been an essential tool in supporting Irish farmers and the Irish agrifood industry. An adequately funded CAP, after 2013, will be equally essential in ensuring the continued growth of the sector and in further ensuring that the industry achieves its full potential.

In our programme for Government, we identified the growth of the agrifood sector as one of our key commitments. To that end, we said that CAP reform will be vital for the future development of the agrifood sector. Our primary aim is to secure a fair overall funding envelope for agriculture under the CAP and a fair share of this budget for Irish agriculture.

In our amendment to the motion, we reiterate that commitment in identifying, as one of the key priorities during the forthcoming negotiations, the need: "to ensure that the vital role of the CAP in promoting sustainable and competitive food production is maintained and that a commensurate EU budget is provided to support that objective." As the House is aware, the proposals for the future of the CAP to 2020 are scheduled to be published in October. The publication of those proposals will be followed by an intense and lengthy period of negotiation that will conclude under the Irish Presidency of the European Council, during which my colleague, the Minister for Agriculture, Fisheries and Food, Deputy Coveney, will be President of the Council of EU Agriculture Ministers.

Deputies may have no doubt that, during the negotiations, this Government will negotiate vigorously in the best interest of Irish agriculture and the Irish agrifood sector. Apart from ensuring the adequacy of the CAP budget, we will also be negotiating to protect payments to Irish farmers and the agrifood sector under both pillars 1 and 2 of the CAP. We want to ensure that Ireland receives its fair share of the CAP budget. I should emphasise that Ireland's fair share is not some notional amount to which we simply think we are entitled. Rather it is an amount which we believe is entirely justified.

Since this Government has come into office, the Minister, Deputy Coveney, has been a very active member of the Council of EU Agriculture Ministers. Through that period of active engagement he has been building and developing useful alliances with other ministerial colleagues with whom we have various common interests.

The Government will continue that process of active engagement with our EU partners to advance matters of mutual interest. Likewise, we have and are continuing to engage actively and constructively with the European Commission and the European Parliament.

Only this week, the Minister, Deputy Coveney, attended a Council of Agriculture Ministers and had the opportunity, once again, to raise issues of concern with the EU Agriculture Commissioner. We all recognise the increasingly important role of the European Parliament under the co-decision process.

Dáil Éireann díospóireacht - Thursday, 15 Sep 2011

Reform of the Common Agricultural Policy: Motion (Resumed)

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Dáil Éireann díospóireacht -
Thursday, 15 Sep 2011