Vol. 868 No. 1
129. Deputy Éamon Ó Cuív asked the Minister for Agriculture, Food and the Marine the estimated cost of the superlevy fine on Ireland for 2015; the steps taken by him to have this reduced; the success to date of his efforts; and if he will make a statement on the matter. [6829/15]
The Minister, Deputy Coveney, is welcome back to this side of the Atlantic. I take this opportunity to congratulate our colleague, Deputy Martin Ferris, on the victory that Ardfert had on the weekend.
We are told that the farmers of Ireland, on top of a land parcel identification system, LPIS, fine of €180 million, are now facing a superlevy fine of €100 million. What I need to know today is what has the Minister succeeded in doing to reduce or eliminate this totally unnecessary fine?
I too pass on my congratulations to Deputy Martin Ferris.
It is not true to say we are going to have to pay an LPIS fine of €180 million. That is what the Commission has proposed but we are very much opposing it. It has gone to conciliation and is still in process. It is important to put that on the record.
The rules governing the imposition of a superlevy fine are set by regulations agreed at EU level. Under these regulations each member state is allocated a volume quota of milk, above which a superlevy fine, which is just over €0.20 per litre, has to be paid to the EU Commission by producers who contribute to the over-production. As the Deputy will know, we had a very strong growing season last year. We had strong prices for most of last year and an awful lot of farmers are planning for the abolition of quotas in the next couple of months. As a result of that, we have seen the production levels on Irish dairy farms higher than we would have liked. In autumn, we were looking at a very large superlevy fine. By the end of January the quota position looked at being 5.47% over quota, which would essentially mean a superlevy fine of about €88 million. It is a significant issue. I have been pushing for ways in which we can reduce the superlevy fine in the final year of milk quota as a way of soft landing, which was supposed to be the idea.
A majority of EU member states, in many ways under the leadership of Ireland in terms of the position we had taken with three or four other countries, looked for what was called a butterfat adjustment which, effectively, would have given us an extra 2% in our quota. We also looked at reducing the super levy fine per litre in the last year to ease us out of quota management, but that has not been possible. What has been possible is talking to the Commission to ensure any superlevy fine incurred would be paid over a number of years. We are continuing to negotiate with the Commission on that issue. It has indicated that it is happy for farmers to be allowed to pay super levy fines they may have incurred to co-operatives over a number of years. We are still negotiating with it on whether co-operatives and Ireland should be able to pay it over a prolonged period of time also, which would certainly ease the blow.
The first question I asked was what was the current estimated cost of the superlevy fine and the steps being taken to have it reduced. As I did not get an answer to the first part of the question, the Minister might give me an answer on the current estimated-----
I answered the Deputy - it is €88 million.
The Minister said that was at Christmas.
I did not; I said it was at the end of January.
We are well into February. Is that still the position?
I will come back to the Deputy on that point.
That is fine. We are facing an €88 million fine and the best the Minister is offering us is that the liability will be attached immediately and one will have time to pay it. When representatives of ICOS and the Irish Dairy Board appeared before the committee, they were very adamant that the country should fight to have the superlevy fine reduced. Is the Minister saying he failed in regard to the butterfat adjustment? Is he saying he failed to get a reduction in the rate at which the superlevy was charged? Will he confirm that is the position and that he has literally made no progress in the negotiations, except possibly on the issue of deferment?
I am a little surprised that the Deputy has not informed himself on the issue. He is the main Opposition spokesperson on agriculture and I would have thought he would have been on top of the numbers. Last May the anticipated superlevy fine, based on trends at that stage, was 9%. In August the figure was approximately 7% but it then dropped to 6% and is now 5.5%. By the time we get to the end of the quota system in a number of weeks time, it will probably be well below 5.5%. However, it will still be a significant superlevy fine. One is talking about a significant amount of money.
That is not the question I asked.
We have had debates on this issue on many occasions and the Deputy knows only too well what is possible and what is not. It would require agreement across 28 EU member states to secure a change in the approach to a soft landing. Ireland led an effort to introduce a butterfat adjustment which was supported in increasing numbers by many other countries, but it was not possible to get over the line because a number of very large countries blocked it. What we are doing instead is looking at making what is a significant fine affordable over a prolonged period of time and we are trying to get across the line with the Commission. All of the farming organisations, as well as ICOS, know exactly what is going on and we are all working together to try to solve this problem, as opposed to trying to play politics on it.
I am not playing politics; the Minister is the master at playing politics. He promises a lot but delivers very little. The question was the estimated cost of the superlevy fine in 2015. The Minister said it was €88 million at the end of January. We know that farmers are using milk to feed calves and so on to reduce the superlevy.
They always did that.
In working with the farm organisations and farmers by how much does the Minister think he can reduce the superlevy fine by the time we get to the end game? That is what I wanted him to tell me.
That is a fair question.
My next question is whether it will be possible for farmers to deliver milk to milk companies and to retain ownership of the milk until after the due date.
In that way, they will not have provided the milk to the companies within the due time and paid for the storage of the milk. This is on a one-off basis and it comes to an end. Therefore, if one can put the milk sale into next year, my understanding is that it does not count for the superlevy. What has been done domestically, now that the Government has failed in Europe, to work with farming organisations and look at all possibilities so that the sales of milk decrease between now and the first of April? This could be done by retention of ownership of the milk, even if it is in somebody else's storage. Has the Minister looked at that possibility?
We have not failed in Europe. If we can get agreement from the Commission on a schedule of payments over a number of years, that will make an enormous difference to cashflow demands on farmers and on co-ops. We already have an agreement in principle from the Commission that the relationship between farmers and their co-ops could be such that it would allow for a schedule of payments that would significantly ease the burden for farmers. We are currently talking to the Commission, along with other countries, about trying to do the same in terms of Ireland's obligation to the Commission over a period of time. That would be massive progress. If we had, for example, got the butterfat adjustment, which would have been very welcome, we would still have a superlevy problem, because at the moment we are 5.5% over. Butterfat would have been an adjustment of about 1.8%. We would still have had a significant problem.
It is fair for the Deputy to ask about what we are doing between now and the closing date to help farmers reduce their superlevy burden. We are doing that through Teagasc, working with farming organisations and working with farmers. The Deputy asked whether it was possible for farmer to produce milk, have it collected by their co-op and then retain ownership of it through the deadline period, until we move to an absence of quota, and then effectively count it as milk produced outside of quota. I do not think that is possible, but we are looking at all those options. Several people have asked me to explore different possibilities in that regard, and we are exploring those possibilities at the moment, but I would not like to raise people's hopes too much on that. I do not think there is any easy way-----
We are way over time.
130. Deputy Martin Ferris asked the Minister for Agriculture, Food and the Marine if he will accept that a quarter payment to farmers in the green low-carbon agri-environmental scheme, as is proposed for October, is inadequate. [6900/15]
The Minister announced at the committee a few weeks ago that he was accepting applications for GLAS from February and that the first payments would be in October, a quarter payment. Does he accept that a quarter payment in the GLAS, as is proposed for October, is inadequate, given the time they have been without payment?
This schedule has been the topic of discussion for about a year now. I sat down with all the farming organisations and asked them what their priority was for the new agri-environment scheme, namely, GLAS, which is replacing REPS and AEOS for many farmers. I told them we could allow a small number of farmers in for the first phase, go through the application process quickly because numbers would be relatively low, get approvals in early and get payments out early or we could get many more farmers in, but that would take more time. Every single one of the farming organisations told me the priority was to get as many farmers into GLAS in the first phase as possible. Everybody asked me to do that. That is why we are looking to accept somewhere between 25,000 and 30,000 farmers into GLAS in the first tranche. If 30,000 farmers are accepted to a scheme, there could be 35,000 or 40,000 applicants. Outside of Teagasc, we only have 400 planners in the country. This process will take time. Some 30,000 or 40,000 GLAS plans must be put in place and assessed by us, because nobody can get a payment until their plan has been assessed and approved and they have been accepted into the scheme. The plan was that for the first five months of the year or so, we would have farmers applying for GLAS in huge numbers. We would assess all those applications over the summer and make decisions so that people would be accepted into the scheme in September and we assigned approximately €20 million in the Estimates, so that we could pay out in the last three months of the year.
While the application process for GLAS is starting approximately two months later than we had hoped, we will try to stick to the schedule. Farmers have been primed and we hope applications will be submitted as quickly as possible. We will try to have the application process completed by the end of May in order that assessments can be made over the summer and farmers can join the scheme in September. We cannot have it every which way, however, because it is not possible to have an application process for only a couple of weeks for a scheme that will apply to 30,000 farmers.
The scheme opened for applications in February. As we approach the third week of the month, how many applications have been received? Does the Minister accept that an applicant who receives the full payment of €5,000 will receive a payment of only €1,250 in October provided all the criteria have been met? Most of the payment will be needed to pay the planner, which means that farmers will not have any income in the months leading up to Christmas? Does the Minister accept that that is the case? Could the payment be increased? For example, could a double payment or a payment for six months be made to ensure farmers would have some money in their pockets? Many farmers who previously received payments under the rural environment protection scheme, REPS, have not received any payment for the past 12 months. As the Minister will be aware, small and marginal farmers are dependent on these schemes.
Farmers apply for and receive payments under many schemes, although it is correct that in respect of environmental schemes, they have been waiting for some time for a major scheme to replace the rural environment protection scheme. The agri-environment options scheme, AEOS, was introduced as a stop-gap measure by the previous Government and maintained by this Government. While the scheme was successful, the small numbers involved meant that we needed a major environmental scheme. When GLAS is up and running, it will be worth €260 million per annum to approximately 50,000 farmers. While the scheme is not yet open, the first 30,000 participants will be accepted soon. I am moving as fast as possible to secure approval from the European Commission and we are close to reaching a verbal agreement with it on the details of the scheme. Once it opens, we will not waste time and I will encourage farmers to submit applications.
I have always made it clear that farmers should not view GLAS from the perspective of the size of grant they receive in 2015 but on the basis that they will secure access to a five-year scheme. Regardless of whether applications are accepted in August, September or October, farmers will participate in the scheme for five years and receive their first staged payment at the end of this year, with further payments for the next five years. This is a cashflow issue.
131. Deputy Tom Fleming asked the Minister for Agriculture, Food and the Marine if he will prioritise the old-young farmers category for the 60% grant in the new targeted agricultural measures; and if he will make a statement on the matter. [6828/15]
I join previous speakers in congratulating Deputy Martin Ferris and the Ardfert team on winning their third all-Ireland title at the weekend. I am not forgetting the neighbouring club of Brosna which also won an all-Ireland title. Deputy Martin Ferris and I are delighted at the great double secured by teams from County Kerry at the weekend.
I ask the Minister to prioritise the category known as old-young farmers for the 60% grant in the new targeted agricultural measures. These farmers are being deprived of vital payments under the measures because they were actively engaged in farming before 1 January 2010. I ask the Minister to address the issue.
A number of questions have been tabled on young farmers, old-young farmers and so forth which I will answer as we reach them. We worked hard during the negotiations on the Common Agricultural Policy to ensure young farmers would be given preferential treatment. As a result, they will receive a top-up on the single farm payment and priority in the national reserve which will increase their single farm payment. In addition, under Pillar 2 grant aid programmes, young farmers will receive 60% grant aid under the targeted agricultural modernisation scheme, TAMS, while everybody else will receive grant aid of 40%.
We will hopefully announce in approximately one month the first of the TAM schemes and we will roll them out thereafter.
All farmers, regardless of their age or whether they are legally identified as young farmers under the CAP regulations, will get grant aid if they are successful under the TAM scheme process. However, one of the things we had to agree to have mandatory preferential treatment for young farmers in the CAP was a strict definition of who would be in and who would not. Young farmers have to have entered farming within the past five years and have to be under the age of 40. Those are the two criteria. Some people will miss out because they took up farming prior to 2010 but even though they are under the age of 40, they are not categorised as young farmers and, therefore, they will get 40% rather than 60% grant aid. We recognise there is a group that missed out on installation aid when it was abolished in 2008. Some farmers who took up farming between 2008 and 2010 missed out on installation aid and are not categorised as young farmers. They are getting preferential treatment in the national reserve, which I will deal with in a later question.
I ask Members to watch the clock because every Member is entitled to ask questions later.
I compliment and congratulate the Minister on what he has achieved for young farmers but the question relates to a category of farmers who are vital to the future of the agriculture industry. Up to 3% of farmers are in this age group. Most of them are totally dependent on farm income. Mr. Rea from County Kerry stated in the Irish Farmers' Journal, "I am a reasonably productive beef and tillage farmer and I suppose I am the classic old young farmer". He did the green certification in 2008 but he missed out on installation aid because he was farming since before 2010. He will not have access to the national reserve either. He will miss out through no fault of his own. Surely, as he states, there has to be some leeway. Will the Minister increase the 40% grant aid to 60% under the national reserve for this category of "young old farmer"?
The TAM scheme does not come out of the national reserve, as the reserve cannot be used for grant aid. The reserve comes under pillar 1 payments, which are direct payments entirely funded by the EU. The priority phase 1 payments from the national reserve will be to young farmers and new entrants. We will top young farmers' entitlements up to the national average and we will also pay new entrants to farming who might have naked land - that is, land without entitlements. We will put entitlements in place for them. In addition, there is a young farmer's top-up, which is 25% of the national average payment on top of the single farm payment. The Deputy is correct that the category of farmers to whom he refers has been hard done by. They missed out on installation aid and they are not categorised as young farmers. We made the case to the Commission that they were a disadvantaged group and, as a result, they can get preferential treatment through the national reserve. Their single farm payment will be topped up to bring them up to the national average, which will be welcome, because the payments to many of them are well below the national average. We worked hard to get this across the line and the Commission accepted that we could make an exception for that group and that we could accept that they were disadvantaged.
However, the TAM scheme is different. It comes out of rural development programme money, which is 54% co-funded by the EU.
Extra grant aid - the figure of 60% - can only go to young farmers who are categorised as such under the definition. We are doing something for other farmers through the national reserve, but it took us a long time to find a way to do this. Under the rural development programme, if someone is not a young farmer, he or she cannot receive 60% grant aid.
The farmer to whom I refer has stated he is now at the stage where he needs to upgrade, but he is excluded from accessing 60% grant aid under the TAM scheme. He says it is not a level playing field, but based on the Minister's statements, I hope he will act positively. We cannot leave these farmers behind; we must provide them with every assistance and support possible to ensure they will be included in finding the way forward for the agriculture industry. I ask the Department to prioritise them at all times in all schemes.
The farmer concerned is going to receive grant aid. He is not excluded from the TAM scheme, but, like most farmers, will receive 40% grant aid, which is significant. Few schemes have been introduced in any Department under which more than 40% grant aid is given in terms of capital investment. The farmer concerned can avail of this, but he will not be in the same category as a young farmer who started farming in the past five years. Some people aged 41 years who started farming in the past three years believe they should be in this category, as do some under the age of 40 who started farming six or seven years ago. Whenever we have a defined category , there are always people on the margins who are left out. I have a lot of sympathy for them, particularly young farmers under the age of 40 who have been farming for six or seven years. That is the reason we are now helping them through the national reserve. Grant aid of 40% under the TAM scheme gives farmers an opportunity to invest in expansion and growth programmes on their farms and I encourage them to do so. However, not everybody can receive grant aid of 60%.
132. Deputy Éamon Ó Cuív asked the Minister for Agriculture, Food and the Marine when the new rural development plan is due to be agreed; the dates the various schemes will open under the plan in 2015; and if he will make a statement on the matter. [6830/15]
As the Minister knows, we are way behind target in obtaining approval for the rural development plan. Will he confirm when he expects to receive the letters of comfort? I am not asking about agreement on the full plan because we understand he is going to obtain approval for letters of comfort. Has he obtained this approval or when is he likely to obtain it? Will the letters cover all schemes? In other words, will they cover genomics, GLAS, TAMS, discussion groups, health schemes and the Leader programme, etc. or will they be scheme specific? When does the Minister expect to be able to announce the opening of the various schemes?
First, I see in the media today that the Deputy is seeking to change the structure of Pillar 1 payments. If we try to do this, we will still be here next year trying to obtain letters of comfort. We are close to reaching agreement with the Commission. The intention of trying to get letters of comfort by the middle of next month is still on track and that is when we anticipate we will be able to get them. Intense negotiations are taking place today, as they did yesterday and last week. We are negotiating not only with the Commissioner for Agriculture and Rural Development but also with the Commissioner for the Environment and the Commissioner for Climate Action and so on.
I hope to have agreement finalised in principle on the detail of GLAS in the next few days, if possible, in order that we can open the scheme in advance of receiving a letter of comfort next month. We then hope to receive a letter of comfort next month for all of the rural development programme, not just individual schemes. That is our intention, but if something goes wrong in the meantime, I will be up-front about it. We are working night and day to try to get this done, but we have a big partner, the Commission, which needs to be satisfied.
There are 118 rural development programmes before the Commission at the moment but only nine of them have been approved. Most of those involve much smaller and simpler schemes than ours. In that context, one can understand why we are pushing as hard as we can. I thank the Commission for its help on this because it is swamped at the moment, with many countries pushing to get their rural development programmes across the line. We will continue to work with the Commission to reassure it on both the big and small schemes. We are very close to doing that and I am hopeful that we will be able to get our letter of comfort by the middle of March. That will allow us to start opening the schemes in a staggered way after that.
I ask the Minister to confirm the report on agriland.ie that a further 18 rural development programmes were approved in recent days, bringing the total to 27. Is the Minister saying that between now and the end of this month he hopes to have a letter of comfort for GLAS specifically and to open that scheme, with the rest of the schemes opening some time in mid-March or is he saying that GLAS will not open in February but in March? In the event of the scheme not opening until March it is unlikely, under the system the Minister is pursuing, that any payment will be made to any farmer under GLAS in 2015.
Let me be clear on this. We are going to open GLAS in February. We are not seeking, nor will we get, a separate letter of comfort for GLAS, rather we will have an understanding with the Commission on the detail of GLAS, following an exchange of e-mails and so forth. We have had a lot of face-to-face meetings with the officials in the Commission in order to get across the line the detail of what GLAS will look like and we are very close to achieving that. Once that is done we can then formally open GLAS so that farmers will be able to take on planners, put their plans in place and understand the detail of the application process in terms of what they have to do. While that process is going on, we will continue to work with the Commission to get our letter of comfort - which will cover GLAS and everything else - hopefully by the middle of next month. We will then start to open other schemes on the back of that letter of comfort. I have made the decision to open GLAS for applications in advance of that letter of comfort but only if we can get the agreement with the Commission on the details of the scheme, so that we can anticipate the letter of comfort and allow farmers to get the application process under way. As the Deputy has outlined, we need to get applications in, planners working and farmers planning for their GLAS applications so that we can complete the application process by the summer and open the scheme in the autumn.
I thank the Minister for that clarification. I ask him to confirm that he expects to announce GLAS next Friday or Saturday in Castlebar. Will the Minister consider allowing farmers in tier 1 and tier 2 to access GLAS early, on a first come, first served basis? That would allow them to get going and to receive a significant payment this year. I propose this because it is highly unlikely that the number of tier 1 and tier 2 farmers will exceed the Minister's threshold of 30,000 farmers to be let into GLAS this year. I would prefer a first come, first served basis for everyone this year because the scheme is so late but failing that, will he consider it on a limited basis for tier 1 and tier 2 farmers? In other words, farmers should submit plans and if they are in tier 1 or tier 2, they will be allowed to go ahead immediately so that payments can be made. If the Minister does not do so, he will not spend the €20 million he has set aside in this year's budget for the GLAS scheme.
Let us think about the practicalities of this for a moment.
If I was to announce today-----
On Friday.
-----that 30,000 farmers would be accepted into GLAS on a first come, first served basis, the application process would be chaotic. There would be massive pressure on planners to be the first in and it would be totally unmanageable. Deputy Ó Cuív knows that as a former Minister who has managed schemes like this before. I can never remember 30,000 farmers coming into a scheme in one go, even in REPs. We must leave a sufficient window to allow planners to make plans for their clients in an orderly manner and make sure the application process is properly managed. Otherwise, we will have flawed and rushed plans, people will be disqualified when they should not be and this will lead to appeals. We are trying to have an orderly opening of a five-year scheme, getting as many farmers as we can in tiers 1, 2 and 3. The only way to do so is to be very clear on the opening and closing dates to give people space to get in applications. Then, we will assess them fairly and equally and we will announce who is in and who is out in that process.
The Minister could do a hybrid. I will discuss it with the Minister again because there is a way of getting people in and getting the money out.
I want to get the money out. It is provided for in the Estimate.
Please, we want to make some progress.
133. Deputy Martin Ferris asked the Minister for Agriculture, Food and the Marine the measures being taken to resolve the situation of those farmers under 40 years of age, who have been farming full-time for five years, but who are unable to get access to the national reserve. [6901/15]
The Minister dealt with some of the subject of this question when dealing with Deputy Tom Fleming. It concerns measures taken to resolve the situation of farmers under the age of 40 years, who have been farming full-time for five years but are unable to get access to the national reserve. Can the Minister outline his proposals? The Minister has already answered much of this.
I thank multiple Deputies for raising this issue, which has been an issue for me for quite a while. I thank Macra na Feirme, which has been engaged in the issue long before it became a campaigning issue for some people, over the past number of weeks. Other farming organisations have been involved.
In 2008, the decision was made to shut down installation aid. Farmers were planning to get installation aid as part of their business plans. All of a sudden, the scheme was shut down and they found themselves without the assistance to get started that many of their peers had a few months earlier. In the new CAP, where we pushed hard to get positive discrimination in favour of young farmers to get more young people into farming, the definition of young farmer was someone who came into farming within the past five years under the age of 40. This means many young farmers under the age of 40, who started farming between 2008 and 2010, missed out on installation aid and are now missing out on getting special treatment and top-up payments as young farmers. This group of farmers numbers in the hundreds, not in the thousands. I have been trying to find a way to get them into the category of young farmer but this has been ruled out by the Commission over and over again. There is a clear definition in the regulation.
We have looked at how we can use the national reserve to do it. In order to give someone preferential treatment under the national reserve, they must be in a category referred to as disadvantaged. There must be a reason to pay them extra and so we have been trying to convince the Commission, successfully, that this group of people who missed out on installation aid and are now missing out on being in the category of young farmer, are disadvantaged because they missed out on both supports. As a result, we can help them with the national reserve. That is how it will work.
If a farmer is in that category and his or her payment is below the national average, he or she can apply under phase 2 of the national reserve allocations and we should be able to increase the entitlements to the national average, which will make a big difference for many young farmers.
I concur with the Minister that disbanding installation aid was a huge hit to young farmers in that category. In conjunction with the early retirement scheme, it offered a great incentive for elderly farmers to step back and let young people take over. An answer to a written parliamentary question says there must be a specific disadvantage category group.
The application for use of the reserve for non-priority categories will depend on the availability of funds in the national reserve once funding to the two priority categories have been allocated. Will the priority areas have to be funded before funding is allocated to special disadvantaged areas?
That is a fair question. The priority categories will be new entrants and young farmers who will receive top-ups on their entitlements up to the average figure before they then receive the 25% additional top-up under a separate scheme for young farmers. People will be entering farming for the first time without entitlements or payments. They will be buying or taking out long-term leases on land without entitlements. They will have to be able to apply to receive some entitlement. Once the priority categories are funded through the national reserve, we will examine the old-young farmer category as the next priority. There should be enough money in the national reserve to do this. They will be paid on the basis of up to 90 entitlements, that is, 90 hectares, a decent sized farm by any standard. We do not want people with huge holdings to have a significant bump in their entitlements, but eligible farmers will be receiving payments to push up their entitlements to the national average. It is possible that the national reserve could run out of money, but we have made our calculations on the basis that it will not. If we do run out of money, we will have to consider how we might change the allocation process to use the money we have available to best effect, whether by reducing the area involved or changing the qualifying criteria. We will negotiate with the farming organisations and other stakeholders should that happen. I hope, however, that we will have enough money in the national reserve to deal with it.
It will be very comforting to old-young farmers if there is enough money available to meet that requirement and every effort should be made to ensure that will be the case. Unfortunately, they happen to fall between two stools. What is the Scottish derogation? I previously received a reply which described it as involving the allocation of entitlements to persons who never had held entitlements. The Department informed me that it was considering this issue.
I will revert to the Deputy with an explanation of the Scottish derogation. I am pretty sure I know what it is, but I do not want to outline it without being absolutely sure.
