SELECT COMMITTEE ON AGRICULTURE AND FOOD díospóireacht -
Wednesday, 28 Mar 2007

2007 Output Statement for Department of Agriculture and Food.

Chairman

I remind members and witnesses to ensure their mobile phones are completely switched off for the duration of the meeting.

The purpose of today's meeting is to consider Revised Estimates for 2007, Vote 31 — Agriculture and Food, which were referred by Dáil Éireann to the select committee on 22 February 2007.

On behalf of the committee, I welcome the Minister for Agriculture and Food, Deputy Coughlan, the Minister of State at the Department of Agriculture and Food, Deputy Brendan Smith, and the Minister of State at the Department of Agriculture and Food, Deputy Mary Wallace. I also welcome the officials from the Department to the meeting.

Members will be aware that, as part of the budgetary process reforms announced by the Minister for Finance in his budget speech 2006, this year sees the publication by Departments of annual output statements for consideration by Oireachtas committees for the first time. In line with the expanded budgetary process, an output statement has been provided and this has been circulated along with briefing material to members. This important initiative is intended to facilitate better parliamentary involvement in the budget and Estimates process.

The clerk to the committee has circulated a proposed time table for today's meeting. It will allow for opening statements from the Minister and Opposition spokespersons and an open discussion by way of a question and answer session. Is the timetable agreed? Agreed.

I call on the Minister to make her opening statement.

Minister for Agriculture and Food (Mary Coughlan)

I thank the Chairman and the members for affording us this opportunity to present the Estimate to the committee. As the Chairman indicated, the format for the discussion on the Estimates has changed slightly. The Ministers of State will speak on their areas of responsibility and I will give an overview of the process, after which we will be happy to address the issues raised by members of the committee. For the first time, the Estimates are accompanied by an annual output statement, AOS, which summarises my Department's main activities into five high level programmes. The 2007 annual output statement matches the resources required for these programmes with key output targets.

These programmes are closely aligned with my Department's 2005-2007 statement of strategy. They identify key priorities in a clear way. These include: the development of international competitiveness and consumer focus; high standards of food safety and consumer protection; the promotion of a vibrant rural economy; and ensuring agricultural activities make a positive contribution to the environment. They also require my Department to maximise its own operational capabilities, to ensure its standards of corporate governance are of the highest calibre and to operate direct payment and market support schemes efficiently and effectively.

The 2007 gross Estimate provision for my Department, including a capital carryover of €20.3 million from 2006, is almost €1.7 billion. The figures in the Estimate dovetail with those presented by the programme in the AOS. Moreover, the AOS also covers directly EU-funded expenditures, which do not appear in the Vote. I will go through the AOS indicating, where relevant, the linkages with the Revised Estimate for my Department. The administrative costs in the AOS are allocated across all of the main programmes of the Department. The administrative budget for 2007, at just over €295 million, is some 5% higher than the 2006 outturn. This increase results primarily from increases in salaries, wages and allowances under pay agreements, and in costs relating to office machinery and supplies, and IT outsourcing.

Similarly, the costs associated with programme 5, which covers IT, personnel, finance and other corporate services activities, are spread across the other four programmes. Actions under this programme include the implementation of the Department’s modernisation action plan under the social partnership agreement, Towards 2016. Progress on this plan will be assessed by the Civil Service performance verification group. They also include the implementation of the decentralisation plan, the Department’s HR and IT and the customer service action plan.

Programme 1 relates to improving competitiveness and increasing the focus on what the consumer wants, to facilitate international trade in Irish agrifood products. This is a key programme for my Department. The wide range of activities required to deliver it is fleshed out in significant detail in the Agri Vision 2015 action plan. There are a number of vital activities under this programme. They include the provision of support for research and training, and capital investment both at farm and processing level. It also includes focused assistance for the marketing of Irish products, to ensure that the Irish agrifood sector is equipped to take on competition from abroad and to take full advantage of market opportunities arising in traditional European markets and in emerging markets in the Far East.

Under this programme heading, support for research and training has increased significantly in 2007. The €34 million provided in subhead B is 19% higher than the provisional outturn for 2006. It includes almost €15 million for FIRM, which funds pre-commercial research by public research institutes, and €8.5 million for the stimulus fund, which provides grant assistance for agriproduction research. Some €12.4 million is provided for training programmes undertaken by Teagasc. In addition, €128 million is provided as grant-in-aid for Teagasc in subhead J. This is an increase of €6 million over the 2006 outturn. Teagasc has also been permitted to retain €27 million from the proceeds of the sale of its lands at Athenry, to fund the development of centres of excellence specifically geared to advancing research in the agriculture and food sectors. In the forestry sector, €4.35 million has been provided to COFORD, which deals with research in the forestry sector.

With regard to marketing, my Department provides grant-in-aid to Bord Bia to promote the marketing of Irish food, drink and horticulture products. The provision in 2007 is €26.5 million. This includes an additional €4 million to upgrade the board's marketing capabilities. Apart from its grant-in-aid provision, my Department has provided an additional €2.3 million for quality assurance schemes covering the beef and sheep sectors. In addition, a sum of just over €4 million is being provided for the healthy eating initiative in schools.

Under the competitiveness heading of programme 1, more than €152 million is provided in subhead H for the Department's investment grant programmes, compared with a 2006 outturn of €44 million. The largest element in this subhead relates to the farm waste management scheme, for which €82.8 million is provided. This compares with 2006 expenditure of €21.3 million. This allocation covers the cost of the revised scheme introduced in March 2006 to assist farmers to meet the additional requirements of the nitrates directive. These revisions included an increase in investment ceilings from €75,000 to €120,000, and in the standard grant rate from 40% to 60%, and to 70% in the four zone C areas. It also involved the extension of the scheme to cover horses, deer, goats, pigs, poultry and mushroom compost.

This generous scheme has proven extremely attractive to farmers and by 31 December 2006, more than 48,000 farmers had applied. To facilitate those applicants, I recently extended the deadline for the submission of drawings, and confirmation that planning permission had been applied for, to the end of June. Subhead H also includes €42 million for investment grant aid to improve marketing and processing in the dairy, beef, sheepmeat and other priority sectors. This allocation includes the first instalment of a total package of €150 million in aid for the industry. The aid is competitive, with applications being evaluated and rated. Some €20 million of the 2007 provision is earmarked for the dairy processing sector. Applications for aid under this package are at the final stage of evaluation.

Provision of €14 million is made in 2007 for a beef and sheepmeat processing sector investment package. My colleague, Deputy Brendan Smith, will elaborate on some aspects of this in his contribution. The costs of my Department's food aid contributions to the World Food Programme are also included under the programme. The contribution in 2007 is contained in subhead L and amounts to €8.5 million.

Programme 2 in the AOS relates to food safety, animal health and welfare and plant health. These activities are the bedrock upon which the prosperity of the agrifood sector in Ireland is built. They are a key element in the development of trade and satisfying consumer demands for high quality, safe food. The programme costs in this area correspond with subhead C in the 2007 Estimate. The allocation under this heading is just over €166 million. This is up 23% on the corresponding 2006 outturn of €135.7 million, mainly due to the new suckler cow measure.

On disease eradication, I am pleased to report a significant improvement in the overall disease situation and, in particular, in the case of brucellosis and BSE. Members will note the good figures that have been circulated to them. We will continue to target disease levels as a key component under this programme heading. Subhead C also includes a new provision of €18 million for an important initiative aimed at improving welfare and quality in the suckler herd. Subject to EU approval, the scheme will involve an Exchequer provision of some €250 million.

Programme 3 focuses on the development of the rural economy and the protection of the environment. The 2007 Estimate includes the first year’s funding for a significantly enhanced package of rural development and farm waste management measures. These involve expenditure of €6.8 billion over the period 2007-13. This will include Exchequer funding of €4.7 billion, compared with €2 billion in the previous round. The agriculture measures in the new rural development programme will also attract €2.1 billion from the EU and modulation. The Rural Development Programme 2007-2013 has been sent to the EU Commission and I am seeking its early approval.

The 2007 Estimate includes €257 million in subhead E for disadvantaged area payments to over 100,000 farmers. Under the new scheme, it is proposed to pay an increase of 8% over the 2006 basic grant rate. In addition, €361 million is provided in subhead F for REPS. This compares with expenditure of €329 million in 2006. Subject to EU Commission approval, payment rates under REPS 4 will be 17% higher than those in REPS 3. This scheme has proved enormously popular with farmers in recent years and, by the end of 2006, participation was at a record level of more than 59,000. Significant increases have also been provided for land mobility schemes in subhead G, with more than €72 million provided for early retirement and over €8 million for installation aid.

The forestry sector also offers very significant potential, not only in terms of its timber value but also from an environmental perspective, including its potential for carbon sequestration and in terms of its potential exploitation as a source of bio-energy. The carryover of €20 million in capital is included in the 2006 figure with an overall budget of €131 million, which will be dealt with by the Minister of State, Deputy Mary Wallace.

Programme 4 relates to the operation of direct payments and market supports. In 2007, expenditure is expected to amount to about €1.4 billion. Most of this relates to the single farm payment, which is directly EU funded and therefore does not appear in my Vote. The administration of this scheme in Ireland has been a significant success story. There are complex issues to be addressed, however, particularly in the area of cost compliance and the application of penalties. These are not issues unique to Irish farmers. I have made clear my views on the need for simplification, both to Commissioner Fischer Boel and the German EU Presidency. Expenditure under this heading also includes €30 million provided in subhead D to fund financial and technical costs associated with the administration of EU schemes.

The output statement draws together key policy priorities, identifies target outputs, and quantifies the resources required to deliver them. I hope it gives members of the committee a better overview of what lies behind the complex range of activities within the Department. We have made great efforts to be as concise and focused as possible in this document. The output target dates for each programme are relatively few in number but are of key importance. Much more detailed performance targets are already set out in our strategy statement, the agrivision action plan, and our charter of rights for farmers.

I will be more than happy to answer questions in due course, Chairman. I will now ask the Minister of State, Deputy Brendan Smith, to contribute.

Minister of State at the Department of Agriculture and Food (Mr. B. Smith)

The Minister has already referred to the priorities of making the Irish agrifood sector competitive, and exploiting markets in the face of an increasingly globalised trading environment. As members are aware, the work of Bord Bia is a key element in this effort. The €28.5 million provided in the 2007 Estimate is 18% higher than last year's and includes specific provision to address the significant marketing challenges ahead.

Key aims for the board include the development of leading-edge market intelligence resources, as well as improved business analysis, nutrition and dairying expertise. Marketing effort will be focused on areas where Bord Bia can add most value — for example, as regards the expansion of exports to continental Europe in the beef sector, and the exploitation of opportunities for increasing food and drink exports to Asia. Bord Bia also makes a significant contribution to improving the quality of Irish produce through its quality assurance schemes. Some €2.3 million is being made available under subhead M this year to cover the cost of independent on-farm inspections and associated certification processes under an expanded scheme covering sheepmeat as well as beef.

I also wish to refer to developments in the horticultural sector. The potential for substantial growth and development in this sector is well recognised. I have committed further substantial funding of some €49 million for the sector in the new national development plan which will run to 2013. The funding will promote the specialisation and diversification of on-farm activities, improve the quality of products and develop environmentally friendly practices. This year's Estimate includes €5.5 million for capital investment. This will support investments in the order of some €40 million in that sector. The grant aid has also been increased to 40%. We are awaiting clearance from the European Commission for this scheme.

Under the new national development plan, it is also proposed to provide grant aid of €8 million for the potato sector over the period of the programme. In turn, that will support investments in excess of €20 million by producers. For example, this year, a provision of €1 million for this scheme will provide grant assistance for seed potato producers towards the capital costs of specialised equipment and facilities for the production, storage and marketing of seed potatoes. This scheme is also awaiting clearance from Europe.

On the organic front, a new grant aid scheme will be launched under the NDP later this year. The Revised Estimate includes €1 million for capital investment in equipment and facilities for production, preparation, grading, packing and storage of organic produce. While generous supports were already in place for organic farmers in the REP scheme, from this year onwards it will be possible for registered organic farmers to obtain organic support payments without having to be members of the REP scheme.

The market for organic produce is growing strongly with the organic retail sector in Ireland estimated to be worth €66 million, as opposed to €38 million in 2003. This trend will continue and I urge Irish producers to look to the opportunities in this sector and the generous supports provided to take full advantage of this expanding market.

As the Chairman and members know, in general, the agrifood business has changed dramatically over the past few years. All of us involved must think in a more strategic way concerning future business. The Estimate presented by the Minister today represents an enormous investment in the future of Irish agriculture.

Minister of State at the Department of Agriculture and Food (Ms M. Wallace)

I share the Minister's view on the significant potential of the forestry sector. The provision of €131 million for forestry in 2007 is a 19% increase on the outturn for last year and represents a substantial commitment to the sector. Almost €1 billion will be provided for afforestation over the seven-year life of the rural development programme.

Forestry can be a major player in the development of the rural economy. It employs 16,000 people with an additional 12,500 as forestry owners in their own right. As the Minister has said, it adds to the situation concerning important environmental issues, including climate change and the Kyoto commitments. There are challenges given the variety of competing land uses and high land values which impact on forestry planting rates. We have taken steps to address issues but the recent increase in afforestation grants, annual premiums, forestry road grants and the introduction of the new forestry environmental protection scheme, FEPS, means that we have now made available the best ever package of afforestation and forestry infrastructure measures. It has been described as a really good product by the industry.

The Minister referred to the range of initiatives to kick start the production of energy crops. Some €1 million is provided in the 2007 Estimate for a new national payment of €80 per hectare to be paid as a top up to the existing EU energy crop premium of €45 per hectare. In addition, €2 million has been allocated to establishment grants for willow and miscanthus. These crops can be pelleted and used in domestic and commercial biomass boilers to generate heat and electricity.

Since the scheme was launched in early February the response from growers has been positive. In addition, the Minister recently announced that REPS payments will apply to planting willow and miscanthus up to a maximum area on REPS holdings of ten hectares or 25%, whichever is greater. An additional €1.2 million has been provided over two years for a new capital grant scheme to contribute to the cost of wood biomass harvesting machinery. The level of demand for this measure in 2007 is healthy and we are currently reviewing that provision.

To summarise, therefore, there is a 19% increase on last year's outturn of €110 million to €131 million. We are involved in a promotional campaign with the Irish Forestry Industry Chain to promote forestry around the country and ensure that those involved are aware of all the benefits. Farmers can plant half the land and keep the single farm payment. REPS farmers can now participate because of the new forestry environmental protection scheme. A 15% premium increase is included in the Estimate, which is paid over 20 years. There is a 100% plantation grant and tax free income. Timber values are high and it is a great product. We hope that more people will plant forests this year.

Chairman

I thank the Minister of State.

Mr. Naughten

Irish agriculture is currently undergoing significant changes, not least due to the effects of CAP reform and cross-compliance, which are beginning to hit home. It is a challenging time which requires a grand vision for Irish agriculture. The sector is committed to building upon the industry's existing strengths and maximising the returns to Irish agriculture. In recent years, it has become popular to sideline the industry as one that is in decline and becoming increasingly irrelevant. I do not support this view and neither, I am sure, do any of the Ministers present. In reality, more Irish people than ever before want to buy top quality Irish food and can afford to do so. The consumer preference for higher premium top quality food products is mirrored throughout Europe. Our primary aim for the Irish food industry must be to ensure Ireland becomes the primary supplier of this market.

We must also recognise the changing face of manufacturing in this country. With a number of our flagship companies and high-value employers leaving Ireland for low-cost countries, this highlights the vulnerability of the economy to foreign direct investment and a downturn in the construction industry. This is all the more reason to take immediate steps to support our valuable food industry. This view was copper-fastened recently by the ESRI report which warned that our over-dependence on foreign direct investment and the United States economy could cost up to 90,000 jobs over the coming years. The best way to protect against this is to build upon our own domestic companies and to move more of our exports to Europe, rather than the United States.

One way of achieving this is to focus on our valuable food industry which is intrinsic to this country due to our significant food production capabilities and the fact that the vast majority of production goes into the European market already. Critical to this is the Department of Agriculture and Food underspend which is starving the development of the industry. Between 2003 and 2006, over €270 million has been underspent in the Department. It is pointless providing funds to make Irish agriculture more cost effective, efficient and competitive if this money is not spent on the ground. It makes this Estimate debate nothing more than a paper exercise. While farmers are being constantly told to upscale, become more cost-efficient or alter their production techniques, they need assistance and scientific back-up to do this. This will never happen if the State does not row in behind farmers and give them the needed supports.

The underspend of €270 million should have gone to key priority areas for agriculture, such as young farmers, research and development, addressing land fragmentation through tackling the anomalies in the tax code which hinder farm growth and developing the bio-fuel industry. We must also ease the heavy burden of red tape on farmers by publishing a realistic action plan to significantly reduce the amount of bureaucracy faced by farmers on a daily basis. If we are serious about developing Irish agriculture and taking the industry in new directions, whether through bio-fuels, new food products or larger capacity and production, these ambitions will fall flat unless we tackle the growing problem of bureaucracy and red tape.

CAP reform promised farmers freedom to farm, but that simply has not materialised. The amount of paperwork, box-ticking, form-filling, checks, balances, inspections, re-inspections, limits, regulations and directives has ballooned in recent years. When Department officials and agricultural advisers openly admit to being confused and bewildered by the array of bureaucracy that confronts them every day, what hope can farmers have to deal with it? Farming must not become a by-product of bureaucracy.

More than ever, we must stand squarely behind small food businesses and farmers, putting forward policies to reduce Ireland's high cost base and eliminate unnecessary red tape. While continuing foreign direct investment is important, as is the development of links with the US economy, it is also vital that we do not put all our eggs in one basket. The support of our agrifood sector will ensure that, as an economy, we have an each way bet.

Dr. Upton

I welcome the Minister, the Ministers of State and their officials. People living in rural Ireland and consumers, wherever they live, deserve a quality future. For this to happen the Government must play its part in maintaining an equitable balance between farmers' income needs, consumers' demands for improving food quality, higher environmental standards, more effective rural development and the agrifood industry's desire for improving profitability. Given the importance of farming to the rural economy, how Irish agriculture and its associated industries fare will to a large extent determine the degree and nature of rural development in Ireland.

The experiment of dedicating part of a Department to rural affairs issues has been moderately successful. However, since the primary source of employment and land use in rural areas is agriculture and food producing related activities, it is time to unify the rural affairs aspects of the Department of Community, Rural and Gaeltacht Affairs with the statutory responsibilities of the Department of Agriculture and Food.

Farming families who need financial assistance should be encouraged to access the help available and those families that farm part time must not be discouraged from doing so. The future of Irish agriculture depends on attracting young well trained farmers into the industry, even if they only wish to farm part time. We must do this more effectively and better than we have done to date.

Continuing trends in the globalised economy favour economies of scale which, in the context of Irish agriculture, can best be achieved by larger farms. Recent Government policy has rightly supported the establishment and consolidation of large-scale agrifood enterprises capable of competing in a global marketplace. This work should continue and should be expanded.

The European Commissioner for Agriculture and Rural Development is on record as stating that in the light of trends in world trade the EU would probably lose most of its share of the world export market for dairy products. Due to the relative importance of dairying to Irish agriculture, Ireland risks bearing the brunt of any such loss of market share.

Another key influence on dairy farmers in the near future is the amount of water available. The recent EPA report on the effect of climate change on agriculture noted that east of the Shannon conflicts between human and animal uses for water would increase. I am not convinced that we are doing enough yet to prepare the country, the economy and dairy farmers for this eventuality.

We must help our livestock and meat industries prepare for a time when export refunds have been eliminated and market access for non-EU country products has increased. The Irish livestock and meat sectors must face these and other challenges over the coming years and must adapt if they hope to hold and grow their positions on the world market. The Government has a significant role to play in this task.

One consequence of the decoupling of agricultural supports from agriculture production has been a reduction in the number of sheep. Another consequence has been a greater take-up in the disadvantaged areas compensatory allowance scheme. The sheep industry development strategy should be implemented fully as soon as possible and we should look at ways to extend the disadvantaged areas compensatory allowance scheme beyond 2010.

To maximise the environmental, economic and social benefits to Irish farming and rural Ireland from the rural environment protection scheme it is important that the greatest number of farmers possible participate in the scheme. This can be achieved by improving the links between the costs of compliance with EU and national legislation and the level of payments made to participants in REPS.

We all want to see more of Ireland afforested with a better mix of species. We recognise that a good mix of timber species can help water and landscape quality as well as biodiversity. Growing more and better forests will help Ireland meet its Kyoto commitments and nurture its nascent bio-energy industries.

Irish farmers are subject to stringent food safety regulations which add considerably to their costs. It is important that the producers of food imported into Ireland from non-EU countries observe the same standards. Where the safety of Irish consumers might be at risk and where evidence exists that countries importing food into Ireland from non-EU countries are not observing the same standards as our farmers do, we must take appropriate mitigation measures.

Comprehensive and accurate labelling of the food we buy for ourselves and for our families is a precondition of the assurance of its quality. Food which originates outside the EU may in certain circumstances be labelled as if it was produced inside the EU, sometimes not even meeting minimum requirements for safety and traceability which Irish and EU products are obliged to do. We must work harder to end such anomalies at national and EU levels.

Food poverty, that is, the inability to access a nutritionally adequate diet, affects rural dwellers in disproportionate numbers owing to a variety of reasons, including a relative absence of shops and public transportation. Food poverty impacts on health, culture and social participation, and is often a cause of antisocial behaviour. It is considered that in Ireland approximately 300,000 are at risk of suffering food poverty. We should be doing much more to help those at risk from food poverty.

Recent increases in oil prices coupled with the fear of diminishing oil supplies are rightly seen as an opportunity for Irish farmers. I consider the future role of indigenously and non-indigenously produced bio-energy products as a key contributor to Ireland's economic security.

The true social cost of food is becoming a more important element in the decisions we make about what to buy and consume. Brazilian beef might seem cheaper at the cash register in one's local shop than beef produced on a farm within a few miles of the shop, but that apparent cheapness may well have been bought at the expense, for example, of rain forest degradation, the pollution of the air or sea and the increased health risks associated with consuming meat which contains banned hormones. Promoting local production and distribution mechanisms is one way of addressing the problem of the hidden social, environmental and animal welfare costs of food which has travelled a long way to reach our plates.

Government should play a more enabling role in the development of niche products which have the potential to succeed on local, regional and national markets. We need to establish a new brand, to do for Irish organic production what Kerrygold has done for the global marketing of conventionally produced Irish agriculture products. Between 1996 and 2003, the number of supported organic farms and farms in conversion in Ireland grew by only 30% whereas rates of such growth in other countries were significantly greater — Poland, 800%; Portugal, 500%; Slovakia, 260%; and the UK, 700%.

Ireland's knowledge-based economy needs constantly evolving, relevant and innovative research to continue to grow. Such research is expensive and difficult to co-ordinate. Unless the Government plays a role, it may be that Ireland's aim of maintaining and improving its position as the EU's fourth largest food exporter will not be realised.

The BSE and foot and mouth disease crises ensured that the connection between animal welfare and food safety is foremost in all of our minds. We welcome the downward trend in respect of the number of BSE and brucellosis cases. However, the Government must be committed to the highest possible evidence-based standards in its animal health and welfare policies. Where gaps in the setting of standards in animal welfare exist because, for example, scientific evidence is absent, we should seek to develop such evidence. Where it exists, such standards will be improved accordingly.

Chairman

We will now proceed to a general discussion and question and answer session on the Estimates. I suggest that we proceed through the subheads in order and in the following groups A1 to A10, inclusive, B to D, inclusive, E to G, inclusive, H to J, inclusive, and K to M, inclusive. Is that agreed? Agreed. We will begin with questions on subheads A1 to A10, inclusive.

Mr. Naughten

On subhead A9, laboratory equipment, why is the figure provided so high? The figure for last year was high because a great deal of re-equipping needed to be done following the transfer of the laboratory facilities. However, the figure for this year is even higher.

Mary Coughlan

The figure is the final carryover from costs relating to Backweston. Did the Deputy have an opportunity to visit the facility?

Mr. Naughten

No.

Mary Coughlan

It is a superb facility and the figure provided relates to it.

Chairman

Are subheads A1 to A10 agreed? Agreed. We will now proceed to subheads B to D, inclusive.

Deputy Naughten

On subhead C, questions have arisen with regard to the prevalence of IBR disease in Ireland. I stand open to correction but I understand that a number of countries within the European Union are not prepared to allow the import of live weanlings from Ireland because of the existence here of IBR.

On a related issue — the Minister may communicate with me later if the relevant information is not available to her in this regard — it has been brought to my attention that, following an EU veterinary office inspection, semen being imported to the European Union from New Zealand was banned and that any semen already shipped to member states had to be withdrawn. One of the farming publications recently, and subsequent to the EU-FEO decision, carried an advertisement stating that this semen is again available. Will the Minister clarify the position in respect of this matter?

Mary Coughlan

On the issue of animal diseases, some cattle exporters expressed a great deal of concern regarding the incidence of a number of diseases. For example, there is a high incidence of pneumonia and IBR. The ethos behind the herd health initiative and the welfare scheme relating to the suckler cow herd relates, in part, to reducing the incidence of IBR. This matter was discussed with the farming bodies and many of the cattle exporters have contacted farmers to ensure that they prepared their calves at a particular age in order that they might travel better. That is part of the weanling scheme we want to introduce. Ireland has good markets in Italy, the Netherlands, Spain and Portugal. However, importers in these countries will not buy animals that are not up to standard. That is why it is hugely important, from the perspective of the market, that we send out our animals in good health. As already stated, it is hoped that the weanling scheme will address this matter.

I am aware that the New Zealand semen to which the Deputy refers was withdrawn. I seem to recall that the matter was resolved and that the ban was lifted. However, I will be obliged to communicate with the veterinary officers of the Department in that regard because I do not wish to mislead Members. The semen in question was banned and the necessary measures were taken by the veterinary service. If it is acceptable, I will communicate further with the committee in respect of that matter in writing.

Chairman

When we visited feed lots in Spain, one of the problems brought to our attention related to calves contracting viruses. The greatest difficulty identified by the operators of those feed lots was that the calves were not used to drinking from nose drinkers.

Mary Coughlan

That is correct.

Chairman

I understand that discussions were taking place with the exporters in this regard.

Mary Coughlan

Drop calves are being lifted when they are very young and they then have no ability to learn anything. The idea behind the weanling scheme is that they would learn these things during the weaning process and that, consequently, this would reduce the problems being experienced. That is one of the main reasons behind the introduction of the scheme.

Chairman

The problem to which I refer was the only one the Spanish had with Irish animals.

Mr. Crawford

The news relating to BSE and brucellosis is great. Will the Minister reconsider the position as regards levy charges? I accept that these have been reduced but winter fatteners are losing a great deal. While matters have improved to a degree, dairy farmers have not made any incomes for the past year or so.

Mary Coughlan

The Deputy must not have been monitoring the price of milk. He will have to contact Lakelands to see if it will increase it again.

Mr. Crawford

I wish to raise two issues with the Minister. First, the need to continue with the 30-day test in respect of brucellosis is causing extreme difficulties for many farmers. Would it be possible to reconsider the position in this regard? The Minister referred earlier to efforts being made to change the position regarding the 30-month requirement in respect of BSE. That is an important issue. As the Minister is aware, the industry is well able to look after itself and when it gets an opportunity to drop certain farmers over the 30-month requirement, it utilises it to the full.

Many farms are run on a part-time basis. If they are not run on this basis, there is no second person present to facilitate constant testing. A two-month period as regards brucellosis testing would make a major difference. It usually takes two weeks for the results of tests to be sent back. Therefore, the period before cattle can actually be sold or traded is two weeks. We are entering the show period and this will cause enormous problems for those interested in showing cattle in Virginia.

Dr. Upton

As regards local authorities and the implementation of the Control of Horses Act under subhead C, how significant is that implementation and what level of support is required in respect of it?

Mr. Naughten

A number of animals are not properly registered and do not have equine identification cards. What measures are being taken in this regard? The position is different regarding bovines and I hope equines will be dealt with in the same manner.

Mary Coughlan

Does the Deputy propose we should eat horses?

Mr. Naughten

We do not eat them in this State but horses are exported.

Mary Coughlan

I am happy with the progress made on animal disease reduction, which is hugely important, but it is equally important that we do not become complacent. Many other animal diseases could have a major impact on our stocks if they ever reach our shores. EIA is an example and the ban in this regard has been lifted thanks to significant collaborative work. That has been hugely beneficial. Blue tongue is another disease rampant in north Africa, which has crossed the parallel, and it would cause grave concern if it ever reached the State. That is why we are putting together information packs for farmers and examining the control system.

I have reviewed a number of animal diseases. I indicated that once spring calving had been completed, I would consider what I could do regarding flexibility on the 30-day testing for brucellosis. I am aware of the issue relating to shows but it will have to be evaluated. My concern is that a number of years ago the disease regime was changed to our cost. Significant work has been done on brucellosis and we have done well. We did not change the testing last year because of the transportation of cattle from Northern Ireland, where brucellosis is a major issue, and we have had concerns along the Border. However, following spring calving, I will examine what can be done to introduce more flexibility on this issue.

Mr. Crawford

I am requesting a two-month testing period rather than leaving it open-ended.

Mary Coughlan

It could not be open-ended.

Mr. Crawford

I am well aware of the issues raised by the Minister. I seek a more practical approach.

Mary Coughlan

It would be terribly exciting if, as part of the Northern process, we could move on the issue of an animal health regime for the entire island. It would be very beneficial for farmers in the Border counties.

The veterinary people and I have made the decision to move from 30 to 36 months on the BSE scheme. It went before the European Parliament and, although it was supported, the Parliament indicated it was a matter for each member state. We have indicated our preference. Unfortunately, elements within the DG SANCO review group decided further discussions were needed. I met Commissioner Kyprianou at the last Council meeting and I pushed him to the limit to permit us to proceed as quickly as possible. This matter must be decided before being sent back to Parliament. I had hoped the new regime would be in situ at the beginning of 2007 but we will vigorously pursue an early resolution to this issue so that we can change from 30 to 36 months. This does not raise veterinary or public health issues and we want to ensure this change is made as quickly possible. This will also alleviate other problems in the farming sector.

The control of horses legislation was a hot potato in the Dublin area for some time. I have travelled to see a number of the initiatives introduced under the Act. A fine initiative is in place in Ballymun and the overall allocation for this year will be €2.25 million. A great deal of work has been undertaken on this issue with local authorities throughout the State. The Department also provides funding for each local authority to deal with this issue. The initiatives introduced in north Dublin have been helpful and beneficial and they have done the job that needed to be done.

On the issue of equine identification cards, following the removal of the EIA ban last week, all the stakeholders are involved because equine identification is an EU prerequisite under a statutory instrument. We are, therefore, putting together the necessary formulation for that to happen. The need for it has been exacerbated by the EIA outbreak. Many horses are transported daily, not only thoroughbreds and racehorses, and we need to monitor the identification issue in consultation with the interests involved at every level.

Chairman

Are subheads B to D, inclusive, agreed to? Agreed. We will move on to subheads E to G, inclusive.

Mr. Naughten

I refer to the supports for renewable energy crops in disadvantaged areas. A farmer cannot receive a disadvantaged areas or REPS payment where he draws down funds under the renewable energy scheme. Has that changed?

Mary Coughlan

The Deputy is not reading my e-mails. With regard to REPS, clarity has been provided on access to the scheme. If a farmer is in REPS and he wants to grow energy crops, he will receive an adjusted REPS payment of €155 per hectare under REPS 3, increasing to €189 per hectare under REPS 4. The adjusted payments apply to the planting of willow and miscanthus up to a maximum area on REPS holdings of ten hectares or 25%, whichever is the greater, provided the overall 20 hectare ceiling under the bioenergy scheme is not exceeded. The top-up will be available to farmers.

Mr. Naughten

Does the disadvantaged areas payment remain the same?

Mary Coughlan

There was never a problem with such payments.

Mr. Naughten

Both payments can be drawn down on the same land.

Mary Coughlan

Yes.

Mr. Naughten

With regard to subhead F, will the €30 million increase in funds be sufficient to meet all existing demands and the payments that will arise under REPS 4? When will the new scheme be introduced? I appreciate it is like asking how long is a piece of string, but can the Minister give an indication?

Mary Coughlan

Additional funding was provided for REPS this year because of the increased number of people interested in joining the scheme. It is a demand-led scheme and it will be funded accordingly. I am delighted demand has increased and my assumption is it will increase further when REPS 4 is introduced. The entire rural development programme is before the European Commission. My officials will travel to Europe next week when it is hoped there will be greater clarity on how quickly the schemes will be introduced. In the interim, all the application forms are being put together. I hope the REPS will be set up quickly on the basis we had a previous scheme. I wish to inform the committee that exclusively Exchequer-funded programmes now go through a state aid procedure as opposed to the normal rural development procedure. However, where we have co-funding, it will go through rural development. We have a meeting on the REPS next week and will do our utmost to get it sorted as quickly as possible. No more than committee members, we are inundated with queries as to when the scheme will be made available.

Mr. Naughten

Is there a similar timetable for installation aid and the early retirement scheme?

Mary Coughlan

They are all on the agenda.

Mr. Crawford

The REPS and similar schemes are valuable and as currently set up provide a significant portion of farmers' income. There are some problems, however, and farmers are losing out significantly because of technicalities. I came across a case recently where the Teagasc adviser failed to take account of something and as a result the farmer in question lost €3,500. The case went to appeal, but the farmer lost out. This was a significant amount for a farmer with a wife and three young children. Is it possible we could be more realistic and reasonable with regard to issues such as this?

I understand many others have been caught on a technicality over stocking levels. I submitted a parliamentary question to the Minister in respect of one of these and received a response stating the farmer would get a letter shortly. I gathered by the tone of the response that he would not get good news. The point I am making —

Mary Coughlan

There are quite severe penalties in respect of the REPS. This was a requirement from Europe on the basis that people were expected to do certain things from the environmental perspective. What I want to ensure in REPS 4 is that people are made aware of the factors that will cause penalties to be applied. Many people, for example, provide a site to a son or daughter and forget to amend their plan, with the result that they end up with an almost 100% penalty. Some others think it is grand to dig through an SAC or similar area and put it back together in the hope the national parks and wildlife people will not become aware of it.

I realise there are some issues with the process and we have looked at some of them to see if we can improve the process in REPS 4. There are, however, some fairly severe penalties for minor issues relating to REPS, mainly because the majority of the funding for REPS came from the EU.

Mr. Crawford

What annoys me is that Teagasc is funded by the Department but the adviser there did not take the issue into account. When a new adviser was appointed he refused to sign what had been drawn up by the previous one and the farmer lost out. It went to appeal and the appeal was lost.

Mary Coughlan

I suppose the only other road is for the person to go to the Ombudsman. The process is independent of my Department. A number of decisions have been overturned by the Ombudsman, particularly in the cases such as that.

Chairman

Any other questions on subheads E,F or G? Is it agreed to move on to subheads H, I and J? Agreed.

Mr. Naughten

On subhead H, planners have drawn a matter to my attention in the past fortnight concerning the notifications being sent out for the farm waste management grants.

Mary Coughlan

Does this concern the Deputy's press release?

Mr. Naughten

Yes, that saves me wasting my breath. There is great confusion in this regard. Notification is sent out but there is no indication of the level of grant available to farmers. They have two options, either to go on to the Department's website and go through the eight pages of costings and the explanatory memorandum which is 24 pages long, or get a professional to calculate the figures for them. Planners will not entertain doing this because they are afraid that if they make a mistake, legal action may be taken against them in the future.

Farmers are being forced into a situation whereby if they want to know how much grant aid they will get, they must employ a quantity surveyor. That was never the case in the past. Will the Minister explain why there has been a change in policy? Will she give farmers, as is traditional, an indication of the level of grant they will get? This is critically important because the cost of doing work in this regard has increased.

On a related matter, the Minister stated the ceilings have been increased to €120,000. This is welcome, but can the Minister ensure the ceilings will be increased in line with revised costings as they occur?

On subhead I, dealing with forestry, the traditional target was 20,000 hectares per annum, but this has been scaled back by 50%. Why has it been scaled back and what action is being taken by the Department to increase forest planting?

Over the past few years the number of hectares being planted has been scaled back. The Minister of State talks about FEPS and hopefully it will have an impact on the situation. However, we are already admitting defeat in that we are not making provision for sufficient growth in the area this year. Obviously, the Department feels FEPS will not provide the additional demand required to meet the targets we set under the NDP. Will the Minister elaborate on that?

Mary Coughlan

I will deal with those issues before going to the Dáil for the Vote. We have 48,000 applications in respect of farm waste management and everybody wants to start tomorrow. Therefore, I had to revise the way it would be done so that we could issue approvals more quickly. This is the first time farmers have seen the standard costings, which demonstrates openness. We will revise the standard costings each year and people will be aware of this.

If we went back to the old scheme, it would take the next 30 years to get sorted, which would not be appropriate. We are giving an indication that the grants will not exceed an appropriate rate, either the Department's standard costings or the receipted expenditure sent in to us. We really want to move the process forward as quickly as possible so that people can get on with it. On the €120,000 threshold, we are committed to looking at the revised costings and will also look at the threshold. The grant will not be huge and is not free gratis. A millionaire could afford to do it himself.

On forestry targets, we have increased capacity within the Department by about 19%. The basic issue with regard to forestry is the significant cost of land and, as a result, people do not feel they should put land into forestry use. There will be significant issues with regard to growing crops for energy and biomass despite great enthusiasm within the energy crop sector. I hope FEPS will encourage more people into forestry. Second, we have a forestry programme available. Third, we will have a forestry Act so that people will not have to go back into forestry if they go for just one term, which will be beneficial. Fourth, people have a greater interest in going into forestry because of an increase in the market. We are disappointed that the targets have not been met and that is the reason we have introduced an investment of 19% over and above the existing investment which we hope will drive the market. We are being positive and we have contacted every farmer in the country to ask whether he or she is interested in going into forestry.

Sitting suspended at 4.20 p.m. and resumed at 4.33 p.m.

Chairman

As another Dáil vote is likely to be called at 4.45 p.m. we should try to wrap up this discussion. Are subheads H, I and J agreed? Agreed. Are there any questions on subheads K, L and M?

Mr. Naughten

On subhead L regarding the World Food Programme, I presume this ties in with Ireland's commitment on payments to the Third World.

Mary Coughlan

Yes.

Mr. Naughten

The increase is very marginal.

Mary Coughlan

The total projected contribution in 2007 is €8.5 million. However, it should be noted that the initial 2006 allocation was €6.2 million. During the year I paid an additional €1.3 million above the 2006 allocation. A further €1 million was donated to the orphans and the vulnerable children in Namibia. Overall €2.3 million more than the original Estimate for 2006 was paid.

Mr. Naughten

Is that specifically ring-fenced for projects?

Mary Coughlan

Yes.

Mr. Naughten

Traditionally the Government ring-fences its funding for particular countries and particular projects in such countries.

Mary Coughlan

This is different.

Mr. Naughten

Is this going into the fund?

Mary Coughlan

This is direct food aid into the World Food Programme in Rome. It is a totally untied cash donation. The idea, which I believe to be very good, is that in the area where the problem is, this money would be used to supplement the income of a fragile nation as opposed to what the Americans do on the food aid programme. It is totally untied, straight into the World Food Programme. In recent years we have significantly increased the amount of food aid under that programme, which has been very beneficial.

Mr. Naughten

I also compliment the Minister on the funding for the healthy eating initiative which is a very positive development. I know she has been in discussion with the groups involved. It is a very impressive programme. All Members of the Oireachtas should be aware of and actively encourage it.

Mary Coughlan

I agree.

Dr. Upton

While I welcome the quality assurance schemes, I wonder whether there is some overlap on them. Do we have too many of them? Are they mutually exclusive? While the concept is welcome I ask the Minister to comment on how effective they are.

Mary Coughlan

The quality assurance schemes are very good and are at a very high level. They are provided through Bord Bia. I have increased the money available under the scheme. I find them very beneficial because many people involved in the retail sector have an expectation that they are at that level. Some in the retail sector now go beyond our quality assurance schemes. In the main people are quite enthusiastic about them and as a consequence we have been able to market better. We only have a quality assurance scheme in each sector — grain, beef, pork, etc.

Chairman

Are subheads K, L and M agreed? Agreed.

Mr. Naughten

I have two questions and one comment on subhead N. The allocation to subhead N4 for the receipts from veterinary export fees for live exports is predicted to reduce in 2007. Is that because of a reduction in the charge or does the Department envisage a reduction in the number of live exports?

We all have criticisms of the payment of the single farm payment and anomalies within the scheme. Some people have still not been paid for 2005. I know the Department is working actively on the matter. The Minister should ensure that the Department concentrates on ensuring that all those outstanding payments are made regardless of whether they are for the national reserve or the single farm payment itself. Departmental officials should contact the farmers directly to ascertain whether documentation is outstanding or clarification is required. The non-payment is causing severe financial hardship for some people involved. I sincerely acknowledge the significant progress the Department made in administering and issuing the single farm payment in 2005 and 2006. It was only when we visited the UK and saw at first hand the mess created there that we realised how effective the Department is in that regard.

When the Minister spoke about programme 5, she mentioned the customer service action plan. We hear every week about the difficulties encountered by farmers when they contact the Department by telephone, e-mail or written correspondence to get clarification on a problem regarding payments and schemes, etc. I ask the Minister to examine seriously the flaws in the administration of these schemes to ascertain how they can be addressed. Some communication line needs to be made available in the Department to facilitate farmers and other people in the agriculture sector. I heard today that a departmental official was finding it virtually impossible to get in contact with Portlaoise to get clarification on certain issues.

It has been suggested that certain officials in the Department, who were deemed in a study of the livestock offices throughout the country to be surplus to requirements, could be redeployed to provide information to farmers who call in off the street. There is a great deal of merit in that suggestion because a similar system in the Department of Social and Family Affairs is working very effectively, as the Minister knows. Given that the information services which are made available for three or four days every year at the National Ploughing Championships are effective, why should they not be offered in an equally effective manner in the Department of Agriculture and Food for the other 361 or 362 days of the year? I urge the Minister to avail of the flexibility available within the Department to provide some mechanism of this nature. The lack of services of this nature is causing significant frustration.

Mary Coughlan

I appreciate that people can encounter difficulties when they try to contact the Department's offices in Portlaoise. The Department has provided additional resources and used some of its local offices to deal with the backlog. Most payments have been made, although there are some ongoing problems with the transfer of entitlement scheme, which is the bugbear of many people. We are considering as many permutations as possible. While there is merit in the suggestion that as many officials as possible should be deployed for telephone work, such an approach might stop them from getting their work done. The Deputy rightly mentioned the successful work of departmental officials who go out and about to provide a centre of excellence with access to computers.

We are working to provide as many customer services as we can. We are supplementing that work with the resources available to us in the district veterinary offices. We are considering other ways of doing that work. The development of so many new schemes, all of which will have to be administered and supported, means that the Department will not have many surplus officials. The more interest there is in the new schemes, the greater the service we will have to provide. We are acutely aware of the problems mentioned by Deputy Naughten. We are doing our utmost to try to address and alleviate them as quickly as possible. That has to be done.

Mr. Naughten

Does the Minister agree that an information officer should be deployed in each local office? Such a system works very well in the Department of Social and Family Affairs.

Mary Coughlan

I know. I will have to think about it. The officials in the district veterinary offices cannot directly access some of the information from Portlaoise. Security precautions have been put in place in case some of the information is changed. A certain amount of the information that can be accessed could be of benefit. We will examine the proposal.

Mr. Naughten

The system has been successful in the Department of Social and Family Affairs. It works very well.

Mary Coughlan

Some years ago, the Department of Social and Family Affairs had an inquiry line for the specific use of Deputies.

Mr. Naughten

It still exists; it is very effective.

Mary Coughlan

It is rarely used any more because we all do our own thing. We will consider the Deputy's proposal. The officials in personnel will keel over when they hear what I have said.

Mr. Crawford

I feel strongly about this issue. The Minister referred to security. Deputy Naughten highlighted the effectiveness of the Department's information stand at the National Ploughing Championships.

Mary Coughlan

There is a good source of information in Carnaross.

Mr. Crawford

I would not be surprised. I am talking about Ballybay and Cavan.

Chairman

Some old friends of mine are involved.

Mr. Crawford

A good auctioneer from my part of the country is involved. However, I am talking about the need to give farmers information about grants. I understand the Minister has decided that no inspections will take place until after the forthcoming general election. Will the people who will be doing those inspections on farm buildings—

Mary Coughlan

Fine Gael has developed a half-baked idea, as usual.

Mr. Naughten

We are never too far out.

Mary Coughlan

That is not the situation.

Mr. Crawford

One of the Minister's advisers told me that.

Mary Coughlan

We have reached agreement with the unions on a threshold on the number of pre-inspections that will be done. I proposed that we would remove completely the need for pre-inspections, but a number of people deemed that to be unacceptable. The members of the committee would be surprised if they knew who said it was not acceptable. We are increasing, on the basis of a good union agreement, the number of applications that can be dealt with each day. I hope we will be able to deal with them as quickly as is humanly possible. Almost 80% of the applications were received in December, even though people had known about the scheme for almost a year. The applicants started to break down the doors as we approached Christmas, which is probably typical of this country, and expected their applications to be dealt with by the start of January. We are doing our utmost to ensure the applications are expedited.

Chairman

Is subhead N agreed? Agreed.

Mary Coughlan

I thank the members of the committee for their assistance. I am slightly taken aback by the cordial manner in which we have dealt with the Estimate, although some Opposition members issued a few shots across the bows in their opening remarks. I will conclude by commenting on one or two of the matters which were raised.

The agriculture and agrifoods sector is very important because it is Ireland's largest indigenous industry. I intend to support our real rural policy in that respect.

I do not agree with what was said about the underspend. It arose from demand-led schemes on which I am now overspending.

It was argued that the money received in tax from young farmers should be invested in the bio-fuels sector. I have no role in setting tax policy. It has been agreed to spend €8.4 billion under the national development plan, in co-operation with all the stakeholders in this area, to target a number of specific sectors and deal with a number of the issues which were raised by the Chairman and the members of the committee.

I was also asked about red tape and regulation. It is my firm intention to simplify certain aspects of the system. The matter is being dealt with by the European Commission, to which I have sent a submission. Deputy Upton will agree that we need to strike a balance between the position of the DG SANCO review group and the public good. We are dealing with public health and the need for simplification and identification, which are important issues in this regard. I will continue to be most vociferous.

I do not agree with the view expressed by Deputy Upton on rural affairs. Ireland is the only country with separate Departments to deal with agriculture and rural affairs. The concerns of rural areas are not necessarily always the same as the concerns of the agricultural community. The Government established the Department of Community, Rural and Gaeltacht Affairs because it accepts that certain issues need to be considered with rural concerns in mind.

Members of the committee will be aware that the possibility of extending the boundaries of the disadvantaged areas was considered during Luxembourg's Presidency of the EU. We decided to defer any decision on the issue on the basis that the outcome was unlikely to benefit anyone.

A great deal of work has been done in the food sector. Bord Bia has placed a specific emphasis on niche and artisan foods and more work is being done on nutrition. All of these areas will be developed. There will be massive investment in research and development. The Backweston laboratory is one of the best in the world. The integrated approach being taken in the food, animal, forestry and bio-fuels sectors will create greater opportunities.

This is a positive time to be involved in agriculture for two simple reasons: first, the population of Ireland and the world is increasing and, second, developments in the east, including countries such as Saudi Arabia, will present opportunities for Ireland as a food producing island, particularly as many other countries are focusing their energies on producing crops for energy. The Department has received a large Estimate. I look forward to concluding the significant investment programme under way in agriculture.

Chairman

Is the output statement agreed? Agreed. That concludes the select committee's consideration of the Revised Estimate for the Department of Agriculture and Food for the year ending 31 December 2007. On behalf of the select committee, I thank the Minister, the Ministers of State and their officials for their attendance.