I thank the committee for the invitation to address it today on the subject of the new organic farming scheme under the Rural Development Programme 2014-2020, and on a number of matters relating to organic farming in Ireland. I note in particular the issues raised at a recent session of this committee, on 8 October, which heard from members of the Organic Farmers Representative Body, and I hope that in the course of our discussion here today we can clarify many of these issues for the committee members. At the outset, it should probably be said that the Organic Farmers Representative Body is not an umbrella organisation representing all or even most organic farmers. It represents a number of small livestock farmers and does so most effectively and efficiently. The usual forum for discussion between the Department and the organic farming sector is the Organic Focus Group, which meets quarterly under an independent chair and which is representative of the entire sector. The Organic Farmers Representative Body attends these meetings and the Department has also met independently with the body on several occasions to hear its views and to respond to its various proposals.
Having studied the transcripts of the discussion at this committee on 8 October, I found that four main issues were raised: the framework of support established under the new organic farming scheme which was introduced as part of the RDP; the question of double-funding under GLAS and the new organic scheme; the problem of delays in making payments to organic farmers; and the cost of membership and inspections applied by the organic control bodies.
The new organic farming scheme was introduced following a wide round of consultation which extended over almost two years as part of the process of drafting the new rural development programme. It also takes account of a detailed value-for-money review which was completed last year and which quite deliberately links across to both GLAS and to the targeted agricultural modernisation scheme, TAMS, in creating a comprehensive framework of supports for the sector.
The new organic farming scheme was launched in April 2015 with a budget of €56 million over the lifetime of the RDP. It provides for significantly increased rates of payment to all organic farmers, irrespective of sector. For example, the standard rate payment, which applies to most farmers including livestock farmers, was €106 per hectare under the old scheme, but under the new scheme this has been increased to €170 per hectare, which is a 60% increase. In addition, the area on which full payment can be made has been increased from 55 hectares to 60 hectares. The new scheme also specifically targets tillage farmers for the first time, as this is an area that was identified as being in deficit and is of key importance both in its own right and as a source of home-grown organic feed for the livestock sector. For the same reason, the new scheme also encourages the cultivation of red clover as a high-protein dry-matter fodder crop for the purpose of building supplies of organic feedstuffs.
The Department of Agriculture, Food and the Marine is very pleased that the new scheme has been hugely successful since its launch, attracting 870 applications in its first tranche. To put this in context, the highest number of applications ever received previously was 380 applications in 2010. In addition, over 500 of the 870 applicants are new entrants to organic farming. The highest number of new entrants to organic farming heretofore was 158, in 2009. By any standards the new scheme is a major success, and we have already met most if not all of our targets for the entire RDP period in this first intake of applications.
There are also 720 existing participants from the previous organic farming scheme, which means that when all applications into the new scheme have been processed and approved, we should have some 1,600 organic farmers in the system. This is a major step forward. Together, these farmers manage about 60,000 hectares of land, and because of the structures we are putting in place, we hope to secure this land under organic contract for at least the next five years. For the first time, this allows us to plan ahead with confidence in terms of an organic food market.
Participants under the new organic farming scheme receive significantly higher payment rates than under the previous scheme. Following extensive negotiations with the European Commission, it has been agreed that the benefit of these higher payment rates can be extended to current scheme participants who are under the previous organic farming scheme. This ensures that all organic farmers in the country are now operating off the same footing. Furthermore, the Commission has very recently agreed that we can extend the contracts of people operating under the old scheme so that all participants can now be confident of a secure system of supports right up to the end of the RDP period.
Part of the success of the new scheme is due to the synergies we have put in place with both GLAS and TAMS. Under GLAS, an organic farmer receives guaranteed priority access to the scheme under tier 1. Under TAMS II, a dedicated capital investment scheme has been put in place specifically for the benefit of organic farmers, providing support for the widest range of equipment and structures of any TAMS scheme. The TAMS organic capital development scheme has a budget of €8 million over the lifetime of the RDP. In addition, the Department has put in place a wholly Exchequer-funded scheme of financial assistance directed towards processors to facilitate the development of the organic sector, with a budget of €1.2 million in 2015 and similar for succeeding years. The package of measures available now for the organic sector exceeds anything which was in place previously. More important, however, it demonstrates clear, joined-up thinking between the different strands of support that could be utilised.
I will now turn to the question of double funding between GLAS and the organic farming scheme. I wish to clarify that all organic farmers can access the full range of GLAS measures and in many cases this presents a unique opportunity to top up their organic farming payment with up to €5,000 or more a year under GLAS. The only proviso is when similar actions are in place under both schemes - in such cases it is a clear stipulation of the European legislation that a risk of double-funding exists - that this must be explicitly addressed. It is not possible to be paid twice for the same action, particularly when in most cases the basis will be compensation for income foregone which is already being paid under one or other action. We are happy to discuss this with members and we will do our best to explain the issue as clearly as possible.
With regard to delays in making payments to organic farmers, this was indeed an issue last year due to an industrial dispute at local office level. The impact on organic farmers is deeply regretted and we are doing everything to ensure that the first instalment of this year’s payments will go out to all eligible farmers before Christmas. Reference was made to charges levied by the various organic control bodies. These are independent bodies which operate on the basis of commercial contracts with their farmer clients. There are five separate organic control bodies operating in Ireland and it is open to any farmer to choose to which one he or she wants to sign up. Members will appreciate that it is difficult to comment on the rates being charged in such circumstances. Each of these bodies is approved by the Department to carry out the necessary controls and checks to ensure that Irish organic farmers are operating to at least the standards laid down across the EU. In accordance with the governing EU regulations, specifically Article 27 of Council Regulation (EC) 834 of 2007, this certification process can be delegated to approved control bodies. This is the approach we have taken in Ireland and which is common across many member states of the European Union. The flexibility to delegate this work to anybody other than an approved control body is not provided for within the governing legislation.
The Department contributes directly towards the cost of inspections by these bodies to the tune of €150 a visit, a contribution which we increased recently from a previous rate of €121. The organic control bodies play a critical role in ensuring that the standard of Irish organic farming and produce is respected and relied upon worldwide, which, in turn, is key to unlocking the extensive framework of supports we have put in place through the EU regulations. It is also key to the development of a vibrant and growing organic market. That is all I have to say at present but my colleagues and I are available to take whatever questions members may wish to pose. I thank the Chairman.
