I thank the Chairman for his words of welcome. This is my first opportunity to meet the joint committee and, God sparing, I am sure we will have a very good working relationship.
The motion seeks the approval of both Houses of the Oireachtas of draft regulations, the Bovine Diseases (Levies) Regulations 2004, copies of which were laid before Dáil Éireann and Seanad Éireann, to be made under the Bovine Diseases (Levies) Act 1979. Their purpose is to fix the rates of disease levies from 1 January 2005 as follows: 11 cent per gallon of milk for processing and €2.54 per animal slaughtered or exported live. These amounts represent reductions of 33% under both headings.
The 1979 Act provides for disease levies to be applied to milk deliveries for processing and cattle slaughtered or exported to facilitate the eradication of TB and brucellosis in cattle. The purpose of the levies is to ensure the financial participation of the farming community in meeting the cost of running the schemes and, in particular, the cost of compensation paid to farmers. The Act also provides that, where rates of levies are being prescribed, draft regulations must be laid before each House of the Oireachtas and that they may not be made until a resolution approving them has been passed by both Houses.
As the committee is aware, my Department operates programmes to control and eradicate TB and brucellosis from the cattle herd with a view to protecting public health, improving animal health and meeting EU trading and legislative requirements. These programmes, which have been in place for many years, are comprehensive and have succeeded in maintaining cattle 99.5% free of TB and 99.9% free from brucellosis. Apart from this, they have facilitated continued access for our livestock and livestock products to both EU and third-country markets. In other words, without them, we could not trade.
The position is that under EU trading rules, member states are required to carry out annual testing in order to maintain the official TB-free status of herds unless, in the two preceding years, less than 1% of herds are infected. The testing regime can be reduced where the herd incidence is below this level. Since the incidence of TB here is at about that level, all animals must be tested each year. In addition, we are obliged to undertake additional testing where disease is identified. Similarly, for trading and other reasons, we also have to implement various measures to control and eradicate brucellosis. Progress in reducing TB levels has been difficult to achieve due to a variety of factors, including some deficiencies in available and approved technology and particularly because of infected wildlife. The incidence of the disease increased in 1998 and 1999 when 45,000 reactors were removed from various farms. The same trend was also evident and has persisted in Northern Ireland and Britain. However, there has been a steady decline in the number of reactors here since the late 1990s. This year, I expect that the reactor numbers will be below 26,000 or 42% fewer than in 1999. This is a most welcome development which is due to a number of factors, including the wildlife strategy adopted in recent years, better controls in cattle movements due to CMMS and dealer legislation and vigorous prosecution of offences under the Disease Of Animals Act 1966. I am hopeful this progress can be sustained but we must be mindful of the difficulties.
Brucellosis levels also increased from 1996 onwards and peaked in 1998 with 1,081 new breakdowns and 6,417 laboratory positive animals. From 1996 onwards, a range of additional measures was introduced to address the deteriorating situation. These measures included significantly extended testing, greater use of the more accurate milk ELISA test, earlier and extended depopulation and so on. Apart from this, we also have in place a good traceability system and mapping facilities for identifying contiguous holdings, which contribute to disease contamination.
As in the case of TB, the position with brucellosis has improved significantly in recent years largely as a result of the measures just mentioned. For example, the number of laboratory positive animals identified this year is approximately 20% lower than that of last year. Even more significant is that there has been a 50% reduction in the number of depopulations and of animals removed. I am cautiously optimistic that this improvement can be maintained. With the co-operation of all concerned and good husbandry practices, the goal of eradication is achievable in the foreseeable future provided all stakeholders work closely and vigilantly together.
Revised arrangements for the eradication schemes were introduced in 1996 following agreement with the farming bodies. Under the new arrangements responsibility for arranging and paying for the first clear herd test each year was devolved to farmers. In recognition of this, the disease levies were significantly reduced and an agreement was reached within the farming organisations that the levies would contribute €10 million a year or 50% of compensation costs over the 1996-99 period. For a variety of reasons, levies contributions fell short of the 50% target. The main reason was that compensation costs increased in 1998 and 1999 due to higher reactor numbers in depopulations without any increases in the levy rates.
The agreement with the farming organisations was amended following changes to the brucellosis testing regime in the late 1990s and the minimum agreed contribution from the levies was reduced to €10 million. Levy receipts accounted for 25% of compensation payments to farmers for the 2000-02 period. In view of this and in light of the recommendations of the estimates review committee the disease levies were doubled for 2003.
Sustaining Progress contained commitments that the Government would continue with measures to reduce disease levies and review levy rates from 1 January 2004 in light of efficiencies in the schemes. This review resulted in a reduction of 25% or €5 million in the disease levies for 2004. I mentioned earlier that there had been further improvements in TB-brucellosis levies this year. This has led to a reduction in the cost of the scheme. These schemes, by their nature, are expensive to operate. The operational costs are expected to be €55 million in 2004 compared with €65 million in 2003. Compensation costs have fallen from €36.7 million in 2003 to an estimated €26 million this year and should fall further in 2005.
In view of these developments, the Government decided that a further reduction in the rates of levies to their pre-1 January 2003 levy is warranted. I am pleased to share the benefits of the progress made. The proposed new rates should yield revenue of €10 million in 2005 compared with a contribution of €15 million in 2004. The success of any disease eradication programme is dependent upon a variety of factors, in particular the efficiency of the programme and the technology used. It also depends in no small part on the support and co-operation of individual farmers and the sectors at large. I hope the committee can accept the motion and allow us to proceed with the proposed reductions from 1 January 2005.
