Seanad Éireann díospóireacht -
Wednesday, 3 Mar 1993

Vol. 135 No. 4

Adjournment Matters. - CAP Reform.

Mr. Daly

I thank the Chair for affording me the opportunity to raise this very important issue and I welcome the Minister to the House.

The effect of the changes in the Common Agricultural Policy decided last July on farmers' incomes and on the agricultural community generally will far outweigh the effect of any developments in Irish agriculture since the foundation of the State. The changes will be dramatic and far-reaching and will have a major beneficial impact on farmers and across the whole agri-food business.

There will be a change from the old intervention system to the new direct payment system and it is opportune that we discuss this here because, as has been seen from the huge attendance at many meetings throughout the country, there is widespread confusion about how the major schemes will operate. There will probably be nine or ten new direct funding schemes which will pay cheques directly to farmers from the Department of Agriculture. This will amount to £700 million or £800 million in direct cash payments in the next two years. There is general agreement throughout the agricultural industry of the necessity for more details on how these schemes will operate and how the maximum benefit will be derived. It is timely that we discuss this issue and we should use the Minister's time here to clarify how the change can be effected smoothly, to the maximum benefit of the farming community.

I am particularly interested in small farmers, especially in the disadvantaged and severely handicapped areas of my own constituency and along the west coast. There is a general fear among small farmers at present that the new system will mean more part-time farming in the future thus diminishing the prospect of a long term sustainable income for many people.

I am acutely conscious of the milk quota restrictions which have seriously hampered the development of small farmers and reduced their incomes over the past number of years. I wish to put to the Minister the view that in regions where quotas are being applied, exemptions should be granted to farmers producing up to 30,000 gallons of milk. It seems ludicrous that a farmer producing 16,000 gallons is having his quota cut although he is not the main cause of the over-supply of dairy products. He is largely dependent on that income to sustain his family. I am conscious of the important role small farmers play in the community and the desirability of maintaining and sustaining their incomes as far as possible.

The budget this year has made provision for an allocation of funds for a new retirement scheme for farmers. I wish to impress upon the Minister the desirability of having a worth while effective retirement scheme. We are aware that the European Community will provide in the region of 75 per cent of the funding for the new scheme. There are lessons to be learned from the previous retirement schemes, and the major lesson is that they were all of an unmitigated disaster. We have now the opportunity to make this an effective scheme which will have the desired result. The scheme should allow people to retire with dignity and should make land available for further development, especially for younger farmers anxious to develop their businesses.

I wish to refer to one minor matter which is causing considerable irritation throughout the agricultural community. Trivial mistakes in the completion of application forms for headage grants and otherwise are depriving farmers not only of their headage income for the year in question but also for further years. I would be the first to object to any attempts to defraud the system. However, when trivial mistakes and innocent errors deprive people of the main part of their livelihood, not only for one year but successive years, immediate action must be taken. I would like the Minister to raise this matter with his counterparts in the European Community and in the Commission to ensure that where farmers make innocent mistakes and trivial errors in their application forms they will not be deprived of this income.

I hope we will have an opportunity for further debate on this matter. I thank the Minister for coming here and I would be very glad to hear how farmers can get the maximum benefit from the changes in the Common Agricultural Policy. Since this will directly affect their incomes and livelihood, we should get the best advice and assistance from the Department.

Minister for Agriculture, Food and Forestry (Mr. Walsh)

Senator Daly's motion is timely because we are beginning to implement the Common Agricultural Policy reform this year. It has important implications not alone for farmers but for rural Ireland in general. I congratulate all those elected to the Seanad, and particularly my colleague, Senator Calnan.

CAP has been in existence since the foundation of the EC. It was found necessary to reform the Common Agricultural Policy last year because it could not continue in its old form. It was doing nothing for farmers' incomes, which were declining and it was costing the taxpayer a considerable amount of money. Products of various kinds were building up in storerooms all over Europe, to be sold off for half nothing; in some cases, they were half rotten. This gave the EC a very bad image and the perception was that the EC was funding and supporting the production of food for which there was no use apart from storing it. At the same time thousands of people were starving and this food could not be made available to them. Obviously that matter had to be addressed, and it was last year.

The new system makes substantial finance and funding available directly to farmers, and not into the pockets of store operators and middlemen. The amount of money we are talking about is very substantial and Senator Daly mentioned a figure of £700 million; the figure will be £700 million plus by 1995, and this will be in direct payments to farmers. That should substantially improve the cash flow for farmers and for rural Ireland, particularly the town and villages that badly need support and encouragement.

However, this has created a difficulty. This is the first year of the implementation of Common Agricultural Policy reform, and there are several schemes — the special beef premium is available for ten month and 22 month old animals, the extensification premia, the slaughter premia, the ewe premia, the sheep headage and the equine headage. Virtually all quadrupeds qualify for at least one payment. The difficulty is that while this money is very welcome for our economy, the rules laid down by the EC are extremely stringent.

In Europe, farmers are expected to be familiar with filling forms and the documentation required. In rural Ireland, while farmers can carry out their work excellently, the idea of filling forms and office work is anathema to most of them, resulting in innocent errors being made in a substantial number of cases. This means that not alone is the farmer denied the grant for the animals in question but he is also denied the grant for the entire application for the first and second years. I have struggled with the EC to get over that particular problem. They say they are paying the piper and are entitled to call the tune and so far they have not been helpful. I will continue to seek a resolution to this problem.

I have asked officials in the Department to go to the rural areas, meet the farmers and advise them in the most helpful way how they can apply for, and get, their payments on time and get the maximum amount. Usually there is a large attendance of farmers at these information meetings. Both the farmers and officials learned a lot from the meetings because the farmers stated at first hand that the matter was too complex for them. I will try to simplify the forms and make them user friendly. This cannot be done overnight although it has given rise to difficulty in some areas. To get over this problem I had to take staff from the farm development service to help in the livestock area, and these officials meet the farmers when they call to the offices and give them all the assistance they can. Farmers often complain that, having driven long distances they find the offices closed between 12.50 p.m. and 2.30 p.m. As I said, the officials are extremely helpful and friendly and will give all the assistance possible.

I have enlisted the assistance of Teagasc in relation to these schemes and Teagasc has now put its entire organisation and staff at the disposal of farmers to help them fill in forms. If a farmer calls to the local Teagasc office, he will be assisted with whatever application he is making. This service has been widely advertised and I understand farmers are availing of it. For smaller farmers, there is no charge for this service; for larger farmers there is a charge of £25. For the amount of money we are talking about — this year about £400 million plus rising to £700 million plus by 1995 — this small charge will help farmers to maximise their income from premia and headage payments and will be worth while. The payments we are talking about are substantial. By filling out the forms in the correct way farmers can improve their income substantially.

Senator Daly referred to a number of other schemes, such as the farm retirement scheme. I agree that previous farm retirement schemes were useless; they just did not work. I recall unfortunate people who applied for and got the farm retirment pension but within three years, the cost of living had eroded its value. They came to my clinic and asked me to discontinue their farm retirement pension. They said they wanted the old age pension because it paid more, it is increased annually, and ancillary benefits went with it. I will ensure, as far as possible, that this year the farm retirement scheme will be worthwhile and indexed to the cost of living, so that if a person applies for it in a particular year, five or six years hence, it will keep in tune with the cost of living and inflation. I hope it would be more attractive than the social welfare pension because if it is not people will not give up their farms.

There is one difficulty I am trying to ovecome. The European Community are funding this scheme to the tune of 75 per cent — it costs the Exchequer only 25 per cent — and the EC are insisting that if a person gives over a farm to a younger person that person will have to increase the size of the holding. In my experience in rural Ireland most young couples and young people have enough to do to start off in life without having to buy additional land. This is something that is causing some difficulty.

The question of the implementation of the reformed Common Agricultural Policy is causing a great deal of anxiety in rural Ireland. I will seek to ensure that it is implemented in the most effective and the most straightforward way without having too much bureaucracy and red tape involved. The reality is that people are leaving rural areas; villages, towns and crossroads are no longer the places they used to be with activity and people around them. In this generation we want to do everything possible to try to stop this decline of rural areas.

We have a number of schemes under the Common Agricultural Policy reform, such as the Agri-environment scheme, the Leader programme, the Operational Programme for Rural Development and agri-tourism programmes and we should be in a position to marry those together to ensure there is a package that will help in rural Ireland, the farmers and the people such as shopkeepers who depend on farmers for their livelihood, to get the most from these schemes and programmes.

I was very pleased that a special allocation was made this year in the budget of £4.4 million to provide up to 300 additional staff. It is not every day of the week that you can get extra staff in Departments because of the embargo on recruiting additional public servants. I felt so strongly about implmenting these schemes with a degree of smoothness and a helpfulness that I made a special case to the Department of Finance. I was glad they did not put my submission in the shredder, that they listened to me and made available that very welcome additional resource.

I am delighted to have the opportunity to respond to this debate. I am very pleased to call back here for brief encounters in the Seanad at any opportunity I get because it is a worthwhile forum in which to discuss matters of national interest such as this. I thank Senator Daly for raising the question.

Mr. Daly

I would like to express my appreciation to the Minister for his very informative and detailed reply. It is one that should be widely welcomed by the farming community.

An Cathaoirleach

As regards an Adjournment matter, it was way and above the call of duty. I thank the Minister.