Vol. 892 No. 1
6. Deputy Charlie McConalogue asked the Minister for Agriculture, Food and the Marine if tranche 2 of the green low-carbon agri-environmental scheme will contain the same measures as tranche 1; if not, the options being changed and the reasons for those changes; and if he will make a statement on the matter. [34034/15]
Are there any changes to the measures in tranche two of GLAS compared with as tranche one? There is concern over whether the options for hedgerow planting and low input permanent pasture will remain the same.
I thank the Deputy for asking the question because it gives me the opportunity to clarify a number of matters. I know Deputy Ó Cuív asked the question earlier.
For the second tranche of GLAS, which I intend to launch next week, I have revisited the various actions that will be available to farmers in the light of the substantial progress made to date. GLAS differs from previous schemes in that it adopts a very targeted approach to meeting its environmental objectives and the RDP includes a provision for review and reassessment after the first tranche. Not all the actions which have met or exceeded targets require to be adjusted, given that the associated spend is in many cases relatively easily accommodated in within the total budget.
However, given the very high uptake of low input permanent pasture, it is proposed to adjust the provision of this action under the next tranche. It will still be possible to take up to 10 ha of either low input permanent pasture or traditional hay meadow as before, but the low input permanent pasture component will be limited to 5 ha. The average application for low input permanent pasture so far has been about 7.5 ha, so we will reduce that slightly. While this means that we will still see permanent pasture coming into GLAS, I hope it will encourage more farmers to take the hay meadow option, which is well behind target, and which delivers the same payment per hectare.
I am proposing to suspend the planting of new hedgerows for the second tranche, along with the planting of traditional orchards. Both actions have met their targets for the entire RDP, and there are concerns about the availability of planting stock. I will, however, review this in the third tranche. Most of the concern I have heard is about the planting of hedgerows.
No. It is about low input permanent pasture.
Under the first tranche, so far 8 million plants have been ordered. Our contacts with the forestry service and relevant nurseries indicate they will have serious difficulty supplying even the quantity of planting stock in the timeframe required for the tranche one applicants.
I thank the Minister.
We are changing the hedgerow option for practical reasons. First, we have already met the target for that item for the whole of GLAS in tranche one. Second, our industry has real problems even with our current commitments as opposed to opening an entire new tranche on it. In other words, to solve this problem we would need to import huge volumes of trees, which is a disease risk and a concern so we are taking a practical approach here. From an environmental point of view, we have already met and surpassed our targets on this. Our nurseries have reached capacity and are already stretched to deliver on tranche one.
I thank the Minister.
That is why we are looking at farmers taking up other options instead of planting new hedgerows.
I will come back to the Minister.
The Minister's response on the availability of hedgerow plants rings fairly hollow. Similar to the issue with the low input permanent pasture, his main approach here is based on the fact that the uptake is high. There is no reason to change the low input permanent pasture. Unfortunately, the impact will be that, particularly for smaller farmers in my county of Donegal, many farmers who under tranche one were able to achieve the full €5,000 payment under this environmental scheme will now only be able to achieve €3,000 largely because the Minister is removing the low input permanent pasture measure.
In many ways GLAS has been a disappointment to some farmers in that it was not what was expected. However, the Minister is making this change without any prior notification affecting farmers who have been waiting for tranche two for various reasons, some of which relate to the confusion the Minister caused over the commonage issue, which affected 40% of farmers in County Donegal. Initially he wanted 80% to sign up to a commonage grazing plan. The plan then became 50% and now it is a guideline.
Low input permanent pasture has nothing to do with the commonage issue.
There is confusion about that.
A question, please, Deputy.
Some farmers are finishing out their current environmental schemes under AEOS, for example. Many farmers delayed their applications until tranche two because they had to divide up parcels. Entire parcels had to be entered into certain measures, for example, the low input permanent pasture measure.
I thank the Deputy. I call the Minister.
Now, when they come to apply, without any notice the Minister has done away with it, which means that many of them will only be able to achieve a €3,000 payment rather than the €5,000 they had been expecting.
I will come back to the Deputy.
The Deputy is assuming that the low input permanent pasture is the only option available to them, which, of course, it is not. They have many options available to them and they need to look at the list in terms of what suits their farming structures and apply them. The Deputy said that many commonage farmers were confused and therefore waited for the second tranche. Low input permanent pasture has nothing to do with that.
It has, of course.
They will be coming under a commonage GLAS plan if they are commonage farmers.
As we are spending EU money - a lot of it - as well as Exchequer money, we have an obligation to ensure that we set targets at the start of the scheme outlining what we want done for the money. If in the first tranche we are getting a significant amount of one measure done and not much in the other areas, we need to try to rebalance. The farming organisations have strongly welcomed the changes making it easier to get into the scheme for farmers in an SAC or if they have rare birds, for example, a hen harrier. It is now easier for those in that category to get into GLAS and increase their payments.
I thank the Minister.
We have had to change it accordingly. The provisions within the scheme were always there for that and people knew it.
The Minister did not have to change it accordingly; it was a choice he made. He could have left it alone as it was but he decided not to pursue that option.
That is not true. The Deputy does not understand how the Commission works.
Deputy McConalogue, please.
The Minister said that even though the quota for hedgerows was met, his main reason for discontinuing that was the availability of hedgerow plants and that he might review that in tranche three. However, he is now saying that because the low input permanent pasture has met the quota, he is obliged to change it. The reality is that the Minister has a choice in this. Many farmers do not have other options which might be available to them given the circumstances of their individual farms. Many of them depended on the low input permanent pasture option. Many were also depending on the hedgerow option and because the Minister has now without notice removed that, many of those farmers-----
There is notice. The scheme is not open yet.
Many of those farmers because of the particular circumstances on their farms will now only be able to achieve a maximum payment of just under €3,000 rather than the €5,000.
I thank the Deputy.
This is not a measure the Minister had to take and it will have a radical impact on many farm incomes, particularly smaller farm incomes. Income of €2,000 is not easily earned.
I thank the Deputy.
In one fell swoop, the Minister is undermining a scheme for which it was already difficult for many farmers to qualify. He is significantly undermining farmers' capacity to gain income from this, which might help keep many of them farming on a full-time basis and making their farms viable.
I thank the Deputy. I call the Minister.
I know the Minister plans to announce this next week.
Deputy-----
In the meantime, I ask him to revisit it and take into consideration the severe impact this will have on many farms in County Donegal and many other parts of the country.
I call on the Minister to conclude. We are way over time.
This is about every county. I know the Deputy is only interested in one county. It is about a scheme that makes sense across farming in Ireland.
First, there is notice; it is not open yet for tranche two. It will be opening next week. We are talking about it because there is notice. The Deputy should stop this nonsense about saying there is no notice.
A week's notice is not much notice.
Please-----
I am the one who has to stand over an examination of where we spend money, where we are getting value for money, how we spend money and justifying that through audit systems to the Commission. That is the way this works. This is a rural environmental scheme that is worth over €1 billion to farmers, and most of the money comes from the European exchequer. I am the one who has to make sure it is spent appropriately, otherwise we will be paying disallowances. This is not-----
What is wrong with allowing farmers to continue with-----
This is about supporting farm incomes, but it is also about getting environmental outcomes. I do not accept that farmers do not have alternatives. I think, quite frankly, that the Deputy is taking the lazy option, in terms of what he is saying.
The Minister does not understand the situation facing a lot of farms.
We are trying to offer every farmer options in terms of GLAS, but we are also trying to ensure that we get appropriate value for money in terms of environmental outcomes. The tranches will change slightly to make sure that we continue to deliver the correct outcomes. That is all that is happening. There is still an option for low-income permanent pasture. The average application for that is just over 7 ha, and we are now making it 5 ha. It is a slight adjustment and farmers should be able to adjust to that.
7. Deputy Éamon Ó Cuív asked the Minister for Agriculture, Food and the Marine the amount of money available for lending to Irish agriculture, rural development and farming from the European Investment Bank; when applications will be taken for this funding; the rate of interest to be charged; and if he will make a statement on the matter. [34221/15]
I understand money is potentially available from the European Investment Bank, EIB, in two ways, one of which is making money directly available to SMEs. Can the Minister clarify whether that money is also available to individual farmers? The second element is the possibility of a measure under the rural development programme. Perhaps the Minister could outline his position on that. Many farmers thought they would get access to EIB money.
My Department has been exploring new and more competitive sources of funding for Irish agriculture and will continue to do so in the context of evolving market requirements. For example, the Strategic Banking Corporation of Ireland, SBCI, which includes the European Investment Bank, EIB, as one of its funding partners, has recently announced a new agriculture investment loans product. This credit is available at favourable terms for investments by agricultural SMEs involved in primary agricultural production, the processing of agricultural products or the marketing of agricultural products. The features of these products compared with those currently on the market are lower interest rates, loan amounts of up to €5 million and increased repayment flexibility. Of the almost €45 million in loans approved and drawn down by SMEs between March and the end of June from the SBCI, a third has been accessed by the agricultural sector. Things are already happening.
As to the EIB itself, earlier this year, the European Commission and the EIB presented a model guarantee instrument for agriculture, developed within the framework of their memorandum of understanding on co-operation in agriculture and rural development within the EU. The model instrument aims to help to ease access to finance for farmers and other rural businesses. Member states and regions can adapt and use this model to set up financial instruments funded by their rural development programmes, RDPs under the European Agricultural Fund for Rural Development, EAFRD. Financial instruments can take the form of loans, guarantee funds or equity investments. The funding for any such financial instruments would have to draw on Ireland’s existing RDP allocation of EAFRD funding as well as national Exchequer funding. It is also possible to incorporate funding from other sources for such instruments.
In our RDP we have made a commitment to examining the potential for the use of financial instruments. However, the inclusion of financial instruments by way of a modification to the RDP is required by EU regulation to be based on an ex ante evaluation which must assess the existence of a market failure, the potential for added value, the resources required to implement a proposed financial instrument and the proposed strategic approach to financial instruments. In other words, it is possible but work is required.
I refer to my question on the EIB. The Minister's reply, which is similar to one I received yesterday, refers specifically to SMEs. Can the money be accessed by individual farmers for ordinary farming business or is it limited to SMEs, as we understand them? If one was to avail of the second fund, would the RDP have to be adjusted and the funding for existing RDPs reduced? Would it be a question of robbing Peter and paying Paul? Has the Minister commissioned the ex ante report? From what he said, I understand he would have to do that before making progress with the European Union. I have three specific questions, and perhaps this time I could get specific answers rather than the Minister rambling all around the world, not answering questions and wasting time.
I gave the Deputy fairly specific answers, but the problem is that a lot of the time he does not like the answers.
The Minister never gives us answers. He was there for two minutes, but never actually answered the question.
The truth is that the solutions we are putting in place are not those the Deputy would put in place, which would, by and large, be to the detriment of agriculture. The kind of innovative thinking we are now talking about with the EIB is not the kind of thing on which the Deputy would have focused. My understanding is that primary food producers and SMEs, including farmers, can access the SBCI money. I met Ulster Bank and Bank of Ireland at CEO level yesterday to discuss some of the things they are doing in this area and I will meet AIB tomorrow.
In terms of the RDP, we have a set amount of money we can spend, namely, just under €4 billion. The EIB is trying to complement that spend. People who are using grant aid to upgrade their farmyards, for example, should be able to borrow the balance from competitive funds that can be put in place to do that. If we can show there is market failure in certain areas, in other words, that farmers or the agricultural industry cannot get competitive finance in the normal way or we can show that there is the potential for added value to an investment in a certain area, and if that is consistent with EU policy, which is always a test for EIB investment, we should be able to draw down money to do that. Such money would probably come through the existing banking system, as is the case with the SBCI, or perhaps through new financial models for farmers. That is yet to be put in place.
One thing I learned was that when civil servants write replies they tend to be quite careful with the wording. The Minister's reply uses the phrase "SMEs" twice. Individual farmers are not normally referred to as SMEs. Could the Minister find out in the next two days whether farmers can access funding from the SBCI and write to me and other Opposition spokespersons with the information? The reply he gave to my question seems to be at variance with what he just said.
My second question was whether the Minister has started on the ex ante report, because I understand it is the first step on the road and if it is not done we cannot go anywhere. It was a very specific question. Has he commissioned the ex ante report? It is no good discussing EIB funds and their fantastic benefits unless we take the first step on the road. To say that money is available at competitive rates from the banks here, when the variable rates are crazy compared to what is available in Europe, shows that the Government has failed to deal with variable rates.
I can certainly provide the Deputy with what he needs. Many farmers do consider themselves SMEs.
I wonder is that the definition because it a funny word for an official to use.
What I said in my answer is that of the almost €45 million in loans approved and drawn down by SMEs between March and the end of June from the SBCI, a third have been accessed by the agricultural sector.
The Minister's officials meant farmers.
I think so, but I can confirm that for the Deputy. As usual, he sees a conspiracy around every corner.
On the second issue, the wording of the rural development programme being submitted to the Commission includes a provision to draw down EIB money, but we will need to follow through with a more exact commitment to do this. This is the type of ex ante evaluation that the Deputy is speaking about.
Has the commissioning of the report started? Yes or no.
I agree with the Deputy on one thing, which I made clear last night: the interest rates charged to farmers in Ireland - and agriculture represents a very large percentage of the loan book in all three of our pillar banks that lend to agriculture - are not as competitive as they should be. If we could get EIB funding into Ireland, we may be able to force this down through competition, which is the most likely way to get a significant reaction.
8. Deputy Thomas Pringle asked the Minister for Agriculture, Food and the Marine if he will consider allowing farmers to be members of more than one knowledge transfer group to offset the potential for sheep groups to be undermined; and if he will make a statement on the matter. [34203/15]
This question relates to the knowledge transfer groups and whether farmers will be allowed to participate in more than one group. There is a concern that farmers who have sheep and cattle will gravitate towards the cattle groups, and sheep farming could be undermined because of this.
This is an issue. At present, the rule is that a farmer can be in only one discussion group, because otherwise he or she will receive a double payment. A discussion group involves peer discussions and strategic talk, with advisers and farmers speaking to each other about how to improve their businesses. It also involves visits to farms to develop plans to improve practice. If a farmer is in more than one discussion group, he or she will receive multiple plans on the same farm and will be paid for all of them. We are trying to get as many farmers into discussion groups as we can, and if we have a lot of farmers in two discussion groups because they happen to have a sheep operation and a beef operation, we will keep other people out. We are looking at ways to have a practical outcome that would allow farmers interested in improving beef and sheep practices, or other multiple mixed farming activities, to benefit from being in more than one discussion group in terms of upgrading their facilities or their business. We are looking at how we can facilitate this within the rules. I do not want to pay farmers twice and keep other farmers out of discussion groups who might like to be in them. There are also issues regarding whether a father and son could be in two different discussion groups. They may already be in existing discussion groups which are now becoming formal discussion groups. We certainly do not want people to have to leave a discussion group model that may have been working very well over recent years and which may not have been paid. There are some practical implementation issues in terms of the roll-out of the knowledge transfer groups, but they are sensible practical things that we are trying to overcome with the farming organisations, and I think we will be able to come up with sensible conclusions on this.
I can see the difficulty the Minister has with double payments. Perhaps a sliding scale could be used. If a farmer has sheep and cattle and is in a cattle discussion group, the measures recommended in a farm improvement plan might be slightly different for the sheep element of the farming activity. There should be a way to get around this. When does the Minister expect to reach a conclusion in deciding whether it can be facilitated?
It is an ongoing conversation in the Department. Many farmers have said to me that they only want to be paid once but they would like to go into two discussion groups if possible because they want to make sure they are plugged into the latest knowledge on sheep as well as beef. This is not an unreasonable request. At present we are figuring out how to accommodate this with regard to paying the advisers and facilitators if farmers turn up who are not being paid for that discussion group. What is interesting is the appetite to be in discussion groups and the fact that farmers want to be in more than one because they have more than one operation and are asking how this can be facilitated. It is not necessarily about being paid for both; it is about getting the knowledge from both, and we are trying to facilitate this. It is a priority at present because we will roll out more discussion groups later in the autumn.
