SELECT COMMITTEE ON AGRICULTURE, FISHERIES AND FOOD díospóireacht -
Wednesday, 10 Jun 2009

2009 Annual Output Statement.

Chairman

Our purpose today is to consider the 2009 Revised Estimates for the Department of Agriculture, Fisheries and Food together with its annual output statement for 2009 which has been referred to this select committee by order of Dáil Éireann on 23 April 2009. On behalf of the committee, I welcome the Minister for Agriculture, Fisheries and Food, Deputy Brendan Smith, and his officials. I will begin by allowing an opening statement from the Minister and from each of the spokespersons. This will be followed by an open discussion on the 2009 Revised Estimates and the annual output statement by way of a question and answer session. Is that agreed? Agreed.

Members will be aware that, as part of the budgetary process reform issued by the Minister for Finance in his Budget Statement 2009, each Department must now publish an output statement for consideration by Oireachtas committees. In line with the reformed budgetary process, an output statement has been provided and has been circulated, along with a briefing to the members. This is a very important initiative and is intended to facilitate better parliamentary involvement in the budget and Estimates process. In addition, the Minister for Finance in his letter recently requested that the Estimates debate should have a particular focus on the outputs to be achieved for the moneys being voted.

Is it agreed that we would have a general discussion after the spokespersons and then go through each subhead individually?

Deputy Michael Creed

Having consulted Deputy Sherlock, we would rather go straight into the detail on it rather than having any general statements after the Minister's speech.

Chairman

Is that agreed? Agreed.

I now call on the Minister to make his opening statement.

Minister for Agriculture, Fisheries and Food (Deputy Brendan Smith)

I am pleased to present the Revised Estimates for my Department and its annual output statement for 2009, to the committee.

Any discussion must take account of the overall economic and financial circumstances and, in that context, the 2009 Estimates are presented in very much more difficult economic circumstances than those of last year. I do not intend to go into detail about the overall situation but the committee will be aware of the global economic downturn, the significant contraction in the economy and serious deterioration in the public finances. The inescapable reality is that the Government has substantially fewer resources to meet growing public expenditure demands and my ministerial colleagues and I have had to carefully identify priorities and to make very difficult choices based on the funding available.

In the 2009 budget and the supplementary budget the Government has clearly demonstrated its willingness and determination to take the necessary corrective action to address the situation in the public finances to protect competitiveness, restore the credit system, and stimulate job creation and economic confidence. The Government has agreed a five year plan with the EU Commission to secure stability and growth. It is inevitable that this will require very careful management and further difficult decisions on public expenditure.

Given the overall level of resources available to me, I have also had difficult choices to make. My objective has been to protect the most productive elements of the agriculture, food, fisheries and forestry sectors and to ensure that they continue to make the maximum contribution to the national economy. It is vital that the sector is well-positioned to get through this very challenging period and to exploit the opportunities that exist now and that will increase as the international and national economies recover. The Government approach has been to strike a careful balance between increased borrowing, higher taxation and reduced spending, with consequences for every sector of society. Within that overall context, I am satisfied that I have made the right choices.

Against the background I have outlined, it is easy to overlook the fact that the gross Revised Estimate for my Department for 2009 is €1.985 billion. This is offset by appropriations in aid, primarily relating to EU receipts under the rural development programme, of €386 million. My Department also acts as paying agency for the single payment scheme and market supports, which will amount to approximately €1.355 billion in 2009. Notwithstanding the difficult economic circumstances in which we find ourselves therefore, my Department will spend approximately €3.4 billion in 2009 in support of the agriculture, food, fisheries and forestry sectors, when EU and Vote elements are taken together. This is a very significant level of support by any standard.

I will now briefly summarise the financial allocations for 2009 on the basis of the five strategic programmes which are set out in the annual output statement for my Department. The statement links the resources required for the programmes with the key outputs to be achieved in 2009 and includes information on the outcomes achieved in 2008. The financial data in the annual output statement dovetail with those in the Vote.

The administrative budget costs are allocated across all of the main programme costs in the annual output statement. These are estimated at €301.5 million in 2009. This is approximately 9% of estimated expenditure for my Department. Programme 1 in the annual output statement focuses on establishing the policy framework to develop an internationally competitive, innovative and consumer focussed agrifood and fishing sector. This programme involves total expenditure of €340 million in 2009.

Agriculture and rural development policy is largely determined by the EU's Common Agricultural Policy and in 2008 there were a number of extremely positive outcomes from negotiations in which I engaged on the CAP healthcheck. These included a number of CAP simplification measures, the phasing in of increases in milk quota to allow Irish farmers to expand production and increase efficiency in the run up to 2015, the maintenance of key market supports for butter and skimmed milk powder in the face of strong opposition from some member states and the provision of additional EU funds for Irish farmers amounting to some €25 million per annum from 2010 onwards.

I recently announced that the Irish sheep sector would be substantial beneficiaries of this funding, having previously allocated €7 million available to me from the national reserve in 2009, to that sector.

The Minister of State, Deputy Tony Killeen, secured important increases in fishing quotas worth more than €200 million to Irish fishermen in 2008.

At national level, in the context of fostering an innovation culture in our agrifood industry, the Department's Vote includes more than €182 million for research, education and training, when the provision in subhead B and the grants-in-aid to Teagasc and the Marine Institute are included. This signifies a continued commitment to the development of a sustainable bio-economy as a vital element in our national economic development. Investment in research, development and innovation is a critical component of this approach.

This programme also includes €34.3 million as part of a multiannual investment package to fund investment in the dairy, beef, sheepmeat and other sectors. Some €32 million of the 2009 allocation is earmarked for the dairy processing sector, for which €114 million in national grant assistance was awarded in 2007. I recently announced support for projects in the beef and sheepmeat sectors in 2009 that will trigger investment of €170 million in these vital sectors over several years. Smaller provisions are also included for investment in the horticulture, eggs, grain, livestock marketing and processing, livestock breeding and equine sectors.

I have included more than €216 million in grants-in-aid for the vital work carried out by State agencies under the aegis of my Department, including Teagasc, the Marine Institute, Bord Iascaigh Mhara and Bord Bia, whose work in the promotion of high-quality Irish food products at home and abroad is more essential than ever. The efforts of these bodies are also supported by the provision of €12 million in subhead B for Teagasc training, as well as €4.3 million for quality assurance initiatives administered by Bord Bia and €2 million for the healthy eating initiative in schools. Taken together, expenditure under this heading represents a major investment in the creation of a coherent policy and development framework for the agrifood and fisheries sectors and a vote of confidence in its future by the Government.

Programme 2 in the annual output statement refers to the maintenance of the highest possible standards of food safety, consumer protection, animal health and welfare, and fish and plant health. Expenditure under this heading in 2009 will amount to €349 million. This is the bedrock upon which consumer confidence in the agrifood and fisheries sectors, and in particular, our export trade, is built. I have provided €170 million under this programme, in subhead C, for food safety and public health, animal health and welfare and plant health.

On the disease eradication front, the news is largely positive. Brucellosis is now at an historically low level in Ireland. The last confirmed case was disclosed in April 2006. The Department applied to the European Commission on 31 March last for formal recognition of "officially brucellosis free status" for Ireland. I am hopeful that a decision on our application will be taken in July.

Bovine TB is a much more intractable disease, particularly in view of presence of infection in wildlife. There has been a significant improvement in the incidence of the disease since 1999. The number of reactors detected annually has fluctuated slightly but the overall trend has seen the number of reactors fall from approximately 45,000 animals in 1999 to 29,901 animals in 2008. While the number of reactors increased last year, herd incidence fell to 5.88%, compared with 7.7% in 1999. The incidence of TB in the UK increased substantially during the same period.

I am also acutely conscious of the need for continued vigilance regarding exotic diseases from abroad. My Department has comprehensive contingency plans in place to deal with any outbreaks and is closely monitoring the progress of such diseases globally. I am confident that our control systems are efficient and robust. The incidence of BSE continues to fall and the number of cases has declined from 333 in 2002 to just 23 last year. This trend is continuing this year with just five cases identified to date.

This programme also includes €34 million for the animal welfare and breeding scheme for suckler cows. The scheme is designed to secure higher welfare standards, improve breeding information and, as a result, improve quality across the national beef herd which will be reflected in higher returns to the producer. The scheme offers farmers the opportunity to increase the return on all their cows, thus contributing to the continued sustainability of the national suckler herd and the underpinning of our export-focused beef industry. While I have been forced by financial constraints to reduce the premium in respect of the 2009 scheme to €40 per animal, the scheme is extremely worthwhile and will make a very valuable contribution to our beef producing sector.

Programme 3 in the annual output statement relates to the promotion of economic, social and environmental sustainability, and appropriate structural change in the agriculture, forestry, fisheries, bio-energy and food production sectors. Total expenditure under this programme in 2009 is estimated at €847 million in 2009. This includes more than €246 million in subhead H for investment in capital infrastructure at farm level, through the farm waste management scheme, the farm improvement scheme, and a range of other investment schemes to assist the horticulture, organics and potato sectors.

The committee will be aware that in 2009 the Government continued its very significant financial commitment to the farm waste management scheme, which represents the biggest ever investment in farm infrastructures in Ireland. The scheme has been hugely successful and will provide very significant benefits in terms of the environment and competitiveness for the whole of the agriculture sector in Ireland well into the future. In view of the unprecedented scale of the investment undertaken by farmers and the cost of claims arising in 2009, the Government decided to make grant payments on a phased basis, with 40% being paid this year as claims are approved and with the remaining instalments being paid on the basis of 40% in 2010 and the balance of 20% in January 2011. The Government recognises, however, that this phasing of payments has financial implications for farmers and an ex-gratia payment not exceeding 3.5% of the value of the deferred payments will be made to farmers together with the final instalment of grant aid in January 2011. By then, public investment in the scheme will have exceeded €1 billion, probably €1.1 billion. This arrangement is a reasonable and responsible response by Government in the difficult economic circumstances prevailing at present.

The provision for the farm waste management scheme in 2009 is €220 million. This programme also includes almost €385 million to pay liabilities relating to the REPS, early retirement and installation aid schemes under the rural development programme for the period 2007 to 2013. These elements of the programme represent a huge and continuing financial commitment to the rural economy. There are more than 60,000 participants in REPS which makes a major contribution to environmentally friendly farming throughout the country. The committee will be aware that I decided, again due to financial pressures, to withhold the increase of 17% in REPS rates which had been planned. I have, however, indicated a willingness to reduce the obligations of farmers under the scheme in line with this decision and my officials are in discussion with the farm bodies on this issue. Any change in conditions will require the approval of the Commission.

I announced that I would review the rates of payment to REPS 3 participants depending on the number of applications received for the 2009 scheme by the predetermined closing date of 15 May. I also indicated that I would carry out a review of the scheme in the context of the overall level of participation, the funding available to me and the flexibility provided by the additional funding which I negotiated in the recent CAP healthcheck. This review is currently under way and will be concluded shortly in the context of decisions on the submission of a revised rural development programme which is due to be forwarded to the European Commission before 15 July.

While substantial funding will be spent this year on the early retirement and young farmer installation schemes, the committee will be aware that I decided to close both of these schemes to new applicants last October. This decision is also a consequence of the current budgetary constraints. I am sympathetic to the problems of those who were caught in transition and I am keeping the situation under active review.

A further €117 million is provided for a comprehensive range of measures to support forestry and €2.8 million is provided for bioenergy initiatives. Given the difficult choices which had to be made, I decided to continue with support for afforestation to encourage further planting to protect jobs and the future of the industry.

On the fisheries side, the programme includes a range of measures to develop a sustainable, consumer oriented fishing sector, including €5 million to support capital investment in the aquaculture sector, €1.5 million to support projects in the fish processing sector and €15 million for the development of harbour facilities, including works at Castletownbere, Ros An Mhíl, Greencastle and Dunmore East. The grant in aid figure for BIM includes almost €16 million for the fisheries decommissioning scheme, which is an essential mechanism for bringing the Irish fishing fleet into balance with available resources and ensuring that those remaining in the industry can be assured of a profitable future.

The second strand of this rebalancing of quotas with fishing capacity is enforcement, and I have provided more than €12 million for the Sea-Fisheries Protection Authority to ensure that fish stocks are managed sensibly for the benefit of all fishermen. This will help to ensure the future viability of the fishing industry.

The AOS Programme 4 involves expenditure in 2009 of €1.8 billion, and includes major schemes such as the disadvantaged areas scheme, for which €220 million is provided in subhead E of the Vote, and the single payment scheme, which is financed off-Vote through the European agriculture guarantee fund, and involved payments of almost €1.3 billion to Irish farmers in 2008. It also includes €165 million in respect of the recent pigmeat-dioxin incident.

The key targets in this programme relate to the provision of a quality customer service in the operation of these schemes. In this regard, following extensive consultation, the 2009-2011 customer charter was agreed in 2008. In addition, more than €1.229 billion in single farm payments were issued to more than 122,000 farmers by 31 December 2008, and payments worth €250 million issued to more than 100,000 beneficiaries of the disadvantaged areas scheme. This meant that 96% and 98%, respectively, of customer service action plan targets for these two major schemes were met in 2008. There were a number of other customer service developments in 2008, including the expansion of the range of on-line services available to customers, the promotion of the on-line application facility for the single payment scheme bringing the numbers applying on-line from 7,700 in 2007 to almost 20,000 in 2008, and a number of other initiatives.

The committee will be aware that I decided to cut expenditure under the disadvantaged areas scheme in 2009. In doing so, I decided to implement the cut in expenditure in a targeted manner by reducing the maximum area to 34 hectares. The majority of farmers will not suffer any reduction in their payments.

I also draw the attention of the members of the committee to the once-off provision, in subhead C, of €165 million towards the costs associated with the discovery of dioxins in certain pigmeat products in December 2008. This is in addition to some €35 million in expenditure under this heading last year. Members will be very familiar with this issue. This provision is intended to compensate processors and producers affected by the FSAI's withdrawal of product from animals slaughtered between 1 September 2008 and 6 December 2008.

From the time test results confirmed the presence of dioxins, my objective has been to protect public health, restore consumer confidence and get the sector back to full capacity. I remain of the view that the decision to recall all Irish pork and bacon products was the correct one and was the only responsible course of action open to the Government.

The AOS Programme 5 relates to the development of internal systems of corporate governance, the implementation of public service modernisation proposals and the management of the decentralisation programme in a manner which ensures continuity of service and minimises operational risk. Costs in this area relate entirely to the administrative budget. In this context the Department has been engaged in an on-going review of operations to improve efficiency and effectiveness of the delivery of services in the wide range of schemes and services and the objective is to provide the best service possible at lowest cost.

As I indicated at the outset, the 2009 Estimate is framed against the backdrop of the most difficult economic circumstances that the Government has had to face. This has necessitated hard decisions, some of which I have referred to. None of these decisions were easy, but they were necessary and I believe I have made the right ones to achieve a balanced approach in very difficult times.

The agriculture, food, fisheries and forestry sector remains of central economic importance nationally and is our largest indigenous employer. The provision of almost €2 billion in the Vote for my Department is a clear signal that the Government remains firmly committed to the continued development of these sectors. This is, out of necessity, a broad summary of the 2009 Estimate for my Department and I will be happy to deal with any more detailed issues that the members of the committee might wish to raise.

Chairman

I thank the Minister for his presentation.

Deputy Michael Creed

I welcome the Minister and his officials. I do not propose to respond in kind to the Minister's broad ranging statement as we have dealt with many of those issues in other fora and in previous debates. I acknowledge the difficult financial circumstances within which the Department operates. In that context the purpose of this debate is to forensically examine some of the various subheads in the Department's Estimates and out-turns for 2009 to ascertain whether the taxpayer is getting value for money from the moneys expended in the Department and to further scrutinise whether there is validity in the point regularly made by farmers, who have been the victims of the difficult financial circumstances under various hues, that the Department's first inclination is to push out to its customer base the impact of the financial circumstances and protect its own bailiwick within the Department. There is some validity in that point.

I understand there are ongoing negotiations on IR issues in regard to the rationalisation of the office network in the Department of Agriculture, Fisheries and Food around the country. Will the Minister give the committee an update on that situation? What are the Department's proposals in that respect? How will they impact on the client base and delivery of service and what are the projected savings? I would be the first to admit there is scope for efficiencies in that area. There is a very extensive network of offices that still have significant commercial value. There are costs to the Department in terms of leasing offices. If a private business held such offices, it might consider getting better value for money. I would like an update on that office rationalisation. I note that the Estimates provide for some reduction in 2009 in subhead A6 which provides for the purchase of furniture and fittings, and expenditure on maintenance and energy for all the Department's offices. Have any savings been factored in for 2009 arising from office rationalisation? If it is not expected that those savings will accrue in 2009, can the Minister provide more detail on subhead A6?

The Department should consider the potential to raise revenue from the new laboratories in Backweston. Representatives of Animal Health Ireland appeared before the committee to discuss a variety of diseases. While the diseases have not gone away, we have moved on from TB and brucellosis. There is a host of other diseases that adversely impact on the health of the national herd and for which no screening is available. Will the Department be in a position to offer blood testing on a fee basis to farmers, who might be having a herd test anyhow and have blood samples taken, for a variety of other diseases which would help improve the health of the national herd? While I have not seen the Backweston laboratories, I believe and hope they represent a state-of-the-art investment. We discussed the lack of such facilities in the debate on the pork dioxin crisis when we were dependent on laboratories in the UK. While it is a welcome development, there may be potential to offer farmers another service that will improve the health of the herd.

Subhead D on income and market supports provides, among other things, for the land parcel identification system. While I do not claim to be an expert on this, there is a range of schemes — REPS comes to mind — where mapping is an integral part of the paperwork an applicant submits to the Department. Serious problems have arisen because of the incompatibility of maps being used by the Department under REPS and maps used under the area aid-single payment scheme. There have been problems with those maps being incompatible with maps for SACs, NHAs, etc. One would have thought that when all these schemes were being introduced we would have had one mapping system that was interchangeable for various schemes. That appears not to be the case, which is giving rise to very serious problems in certain parts of the country, particularly areas where farmers are applying for REPS and where lands are categorised as NHAs, SAC or whatever the case may be. What is that costing farmers in terms of delaying their scheme approvals? Is it necessary for the Department of Agriculture, Fisheries and Food to run two systems which appear to run on parallel tracks and do not interact very well?

Subhead C provides for expenditure in areas relating to food safety, and animal health and welfare. It includes remuneration of temporary veterinary inspectors engaged in meat inspection work, TB and brucellosis testing, and portal inspection work. I have previously raised this matter with the Minister by way of parliamentary questions. In the early part of this century or possibly in the late 1990s the Department engaged in an extensive training programme of agricultural officers up to FETAC level 5 for pre and post-mortem inspections in our meat plants. Having trained those staff we have not availed of the training to engage those staff. There could be very significant savings to the Department in pre and post-mortems. We still pay an extraordinary amount of money to temporary veterinary inspectors engaged in that process.

Is it the official view of the Department or of a wing of the veterinary section of the Department, that only veterinary surgeons are qualified to carry out pre and post-mortem inspections? While that might be the view of a wing of the Department, what is the official Department thinking on the issue? Why did it engage in training agricultural officers up to FETAC level 5 to be involved in pre and post-mortem inspections nearly ten years ago and never avail of the expertise to carry out the work involved? What was the purpose of that training? Is it for nought now? Will we never avail of the expertise of those trained staff members? It brings into question other training budgets in the Department. For what purpose are we training staff? Are we availing fully of the expertise we are giving to staff? A significant amount is being spent in that area. What is the official Department view on the matter?

Deputy Seán Sherlock

I welcome the Minister and his officials. The €3.4 billion spend on agriculture is sizeable. We have hammered out many of the issues on milk quotas, the farm waste management scheme and other schemes in this committee. I will not speak specifically to those matters.

The Teagasc budget has been on my mind for some time. I seek information on the research component of Teagasc's operation. I understand €182 million is allocated for that purpose. Is a value for money mechanism built into research spend? What is the return on investment? For instance, when there is a call for a proposal which is funded by the taxpayer via Teagasc for a specific scientific proposal, what is the success rate for those proposals within Teagasc? What is the failure rate? How much money is spent on research? How is that targeted? Is there an economic return on that investment down the line? What has been the return to the Exchequer on Department investment in co-operatives for the purpose of microbiological research, particularly into derivatives of milk products? While I do not suggest it is a black hole and that the money is ill spent, I would like to understand more about how that system works, particularly when it comes to scientific calls for proposals under the Teagasc heading.

I ask the Minister to elaborate on programme 5 because it is stated that the costs in this area relate entirely to the administrative budget and that there is an ongoing review of operations to improve efficiency and effectiveness in the delivery of services. Is it the Minister's view that the staff component in the Department is currently operating at capacity throughout the State? Should there be fewer staff and what action is being taken to make savings in this regard?

I also want to discuss the €200 million in increases in fishing quotas in 2008 secured by the Minister of State, Deputy Killeen. I may have missed it but is there a statement on the fisheries output for 2009 to 2010, as a result of that increase in quota? I am trying to get an idea as to whether fishermen will get more money over the next period. What is the state of play for fisheries?

Chairman

Does the Minister wish to respond now?

Deputy Brendan Smith

I will reply now. The questions from Deputies Creed and Sherlock overlap to a certain extent.

Deputy Creed on a former occasion referred to the value of the Backweston development for the departmental and State laboratories. We could arrange for the committee to visit those facilities at first hand because it is a very impressive development with state-of-the-art, world-class facilities. The facility for testing for dioxin is in the State Laboratory on the complex. I invite the clerk of the committee to speak to my officials at the Department. A visit during July when the Dáil is in recess would be useful to meet the director and visit the laboratories to see at first hand what facilities are available there. The last time I attended the committee I mentioned that Animal Health Ireland had just been established and I welcome its work. That body has attended a meeting of the committee.

I agree with Deputy Creed that the knowledge and expertise and the physical infrastructure of State facilities should be used to earn money for the State. I had discussions with the head of the veterinary college in UCD quite recently and with senior officials in the Department on the subject of better interaction between the third level institutes, the universities and our research and laboratory facilities. There has been co-operation but we need to provide the momentum. I have arranged with the veterinary college and our people in Backweston to work closer together to provide work experience for students and to carry out research that will be beneficial from the point of view of the State and the Department and from the point of view of the undergraduate and postgraduate students. Animal Health Ireland has developed an effective national plan in the area of unregulated diseases. We need to tackle such issues and Animal Health Ireland is co-funded by the State and by industry which has made a welcome and significant contribution to its operation. This body will contribute significantly to herd health and we will be able to use our facilities for blood testing and be able to build up the necessary relationship. There is no point in the country having facilities if they are not put to maximum use for the industry and everybody involved in it.

Deputy Creed and Deputy Sherlock raised the issue of the possible rationalisation of the number of people working in the Department. The number of staff working in the Department has been reduced by more than 500 people. There are ongoing reductions. Quite a number have already retired this year and a large number are due to retire before the end of the year. We are committed to further staff reductions. Better efficiency has been achieved and is continuing to be achieved. In recent years the Department has achieved great efficiency through the use of technology, the reduction in the number of schemes, the introduction of the single payment scheme and it is committed to further reductions.

A major review of the local office network is under way. This review has not been presented to me yet and I hope it will be presented within the next two weeks. This is not about taking away services from our farming community; this is about providing better services to our communities. There are some counties where there may be more than one departmental office and at times this does not lead to the best efficiency or to the best delivery of service. A critical mass is needed to ensure that the customer gets the best possible service and that our staff members working in those offices have opportunities for promotion and for working on different schemes. A substantial programme analysis is under way in the Department for some time and should be forwarded to me within the next few weeks and then we will make decisions.

The one decision that has been made relates to the closure of the Tallaght district veterinary office. We want to provide a more efficient service and put the available technology to the best possible use. I understand that fewer farmers call into the offices than was the case in the past because they are using technology. They are using more than the phone and are using on-line facilities.

The Department has been very active working with the different farming organisations in promoting the use of on-line communication between the Department as it leads to better efficiency for everybody. The best indications available to us show that increasing numbers of the farming community will use technology. We want the best return for the taxpayer and we want the best delivery of service to our customer, the farmer. This can be done with a rationalisation of offices. It was stated that there are only four offices in the country but this is nonsense. This statement was put out some weeks ago and I do not know where it came from. This is not the route we are taking.

Where there is a possibility of Teagasc and the Department co-locating this will be pursued. I do not see the benefit of Teagasc in one site in a town and the Department in another site. Co-location would mean better efficiency as the same client comes to both offices. We want the best possible returns on the State's investment and on the investment by the taxpayer. Most important, we want the best delivery of service to our farming community.

In response to Deputy Creed's point about maps, I visited the office in Portlaoise last year where the single payment scheme applications are analysed and processed and I saw the mapping regime. My understanding is that different areas have often been included in applications for different schemes and we had to have separate applications for the single payment, REPS and the disadvantaged areas schemes. The farmer is obliged by the EU requirements on our applications to submit different plans. Last year, two mapping systems were being merged to simplify and rationalise the process. Substantial work was carried out last year in this regard and substantial progress has been made. However, I accept the Deputy's point that it should be regularised as much as possible. My understanding is that there were once-off costs in 2008 associated with additional work required on the MTR and SPS databases. Presumably that is merging towards having a one-stop map as being a necessary requirement for all forms that farmers need to submit. I will check what progress has been made on that mapping exercise and will communicate with the Deputy on the issue.

The work of temporary veterinary inspectors relates to food safety in the meat trade and providing guarantees that underpin the reputation of our meat exports. We want to ensure we do it very well. We measure the value of those costs against the value of €2 billion of our meat exports. The Department has ongoing training schemes for our officials in food safety and meat inspection. Where it is possible for our own people to carry out this work we will drive that agenda strongly. We want to reduce the amount of expert work we need to buy in.

Deputy Michael Creed

It is nearly ten years since the Department engaged in a training process for its staff to carry out that work. To date none of those staff is engaged in that work. We are paying extraordinary amounts of money to contract staff to carry out that work, which is not sustainable in the current climate. There is obviously a debate within the Department and it appears that the status quo is holding sway, which may not represent the best value for money. Either the Department made a major mistake in training staff up to FETAC level 5 or it identified back then that this was the proper thing to do and it should proceed, but it has been stopped in its tracks by some unforeseen obstacle that has not been explained today. If it is the Department’s intention to pursue this urgently, not doing so until ten years later does not seem like urgency to me.

Deputy Brendan Smith

My understanding is that the training was undertaken with a view to having this work undertaken by the Department's non-veterinary staff. I understand the EU legal requirement necessitates a veterinary presence.

Deputy Michael Creed

It does not mean that all the staff who carry out the work need to be veterinarians.

Deputy Brendan Smith

Industrial relations issues have arisen. We want to get those addressed.

Deputy Michael Creed

Ten years later.

Deputy Brendan Smith

The people working in this area also have jobs in other work programmes. It is not that the Department's staff are not undertaking their duties and responsibilities. We want to ensure the staff, who have been upskilled and have got additional training and FETAC internationally recognised certification, can put that expertise to work. It is an issue I want to progress, but there are industrial relations issues.

Deputy Michael Creed

Is the Department engaged directly in negotiations with representative bodies on the issue and, if so, with which representative bodies is it engaged?

Deputy Brendan Smith

My understanding is that it has been an internal Department of Agriculture, Fisheries and Food issue. In the meantime we are not going to allow any threat to our exports. We all value the importance of our export market.

Deputy Michael Creed

I am not in any way seeking to undermine the exports.

Deputy Brendan Smith

I am not suggesting that either.

Deputy Michael Creed

Some ten years ago the Department decided this was the right way to go and there has been some impediment put in its way since then in implementing that. That is not delivering value for money. We are in an era where we cannot tolerate lack of value for money. Having trained staff up to FETAC level 5 some ten years ago it is intolerable to have them sitting there and are not allowed to do the job. It may have been something we could have put up with in the past or may not have come to prominence in the past, but it is now intolerable.

Deputy Brendan Smith

Deputy Creed mentions that we all want value for money. The temporary veterinary inspection programme is a programme that has been chosen by the management of the Department as an area for a value for money review report, which is timely considering what the Deputy has said. We are conscious of the need to move on the issue.

Deputy Michael Creed

What is the timeframe?

Deputy Brendan Smith

I do not know but I will communicate with the Deputy next week on a timeframe.

Deputy Sherlock spoke about research and development. In recent years approximately €571 million has been invested in the programmes funded by the Department. FIRM and stimulus programmes have been the two major ones. I am keen for us to move further in this area. We have good co-operation between the industry and our research institutes, the universities and institutes of technology. The Department advertises different research programmes. Universities and institutes submit bids. Departmental officials and external experts analyse the proposals thoroughly. We have been very fortunate in recent years. Some of the bids or proposals can come from a number of universities or institutes of technology working together. Similarly they can come from Teagasc or from the industry. The programme has been extremely successful. For the first time in a number of years, funding has been available to have a major research and development programme. That is under way and very substantial funding is allocated this year.

In the constituency of Deputies Sherlock and Edward O'Keeffe we have the facility at Moorepark, which is recognised as a centre of excellence, particularly for its dairy research. We also have the Ashtown centre just outside Dublin. All of them are carrying out excellent research. For instance one project, pro-safe beef, was proposed by Teagasc researchers and funding for the entire programme was drawn from Europe. The level of research carried out at Moorepark is recognised internationally. I know that Deputy Edward O'Keeffe met many of the international dairy companies abroad. All of those with a presence in Ireland always talk about the excellence of Moorepark and the contribution it made to those major international companies deciding to locate here. I travelled to the United States with representatives of Enterprise Ireland last November. All the representatives of the dairy companies we met spoke in glowing terms about the excellent research and development projects in Moorepark. Most of our major dairy companies, both co-operatives and plcs, have a presence in Moorepark and have individual research projects undertaken by their own staff and by the Moorepark staff. In recent years we have been fortunate to have been able to invest heavily in research and development. Of course it is not research and development for the sake of it. The process must be continued so that products, jobs and exports are created and revenue is generated for the Irish economy. Every Government programme is subject to review after a number of years. The return on taxpayers' investment is examined.

Deputy Seán Sherlock

I would like to respond to the last point the Minister made, which related to the need to secure value for money when reviews and forms of research are undertaken. I take the point he made about Moorepark. We are all very proud of Moorepark. The Minister is stating the obvious in that regard. I say that with respect to the Minister's position. How much money is the taxpayer spending on agricultural research? What is the rate of return on that investment? It might not be possible to answer that question today. The scientific community can respond to calls for proposals and can benefit from funding streams from sources like the European Union, private equity, the co-operative movement and industry. How much money does the Irish taxpayer spend on funding that research? What is the return on that investment to the Irish taxpayer? I appreciate that the Minister might not be able to answer that specific question today. Perhaps he can provide that information at a future meeting of this committee. He may be able to arrange for me to get a briefing on the matter. I want to get a sense of it.

Deputy Brendan Smith

More than €34 million is being spent on research and training this year, some €25 million of which relates to research and development. The €571 million figure I mentioned relates to the 2007-13 programme. Research programmes, by their nature, are not organised on an annual basis. Many of them last for three or four years. It is only in recent years that stimulus programmes like the Food Institutional Research Measure, FIRM, have been available to us. FIRM has promoted centres of excellence in food research and improved Irish access to EU programmes. It has put in place a resource — a network of expertise — from which food companies can draw when they need to access research on food safety. FIRM has been instrumental in developing products that meet specific health needs, such as gluten-free bread. Current research projects on reduced-salt foods will help Ireland to deliver on the EU and WHO "no-salt" strategies. A value for money report on FIRM was completed in 2008. Following the 2008 round of awards, and on foot of the recommendations made in the value for money report, the Department decided to place an increased emphasis on the need to maximise its contribution to, and the commercial opportunities arising from, FIRM projects. As I said earlier, nobody is in favour of research on its own. We want research to lead to investment and job creation.

Deputy Seán Sherlock

That is my point.

Deputy Brendan Smith

Absolutely.

Deputy Seán Sherlock

It must have commercial value.

Deputy Brendan Smith

I am working closely with the knowledge transfer service for the FIRM project. The service in question, which is known as Relay, conveys the knowledge that results from the research projects to the commercial sector. Enterprise Ireland is deeply involved in the technology transfer offices of the third level institutions. The Department is trying to ensure that researchers who are funded by firms are able to commercialise their research outputs, where appropriate. The research that is done for the public good is put into the public domain. Research that is carried out in conjunction with a particular company is, naturally, used by that company in the development of its own products. That has been happening on the dairy side as well as on the beef side. Research projects, by their very nature, are time-consuming. They may run for longer than one or two years. Deputy Sherlock made the important point that we need to commercialise the output of the research in this area. This country should benefit from that research, for example through the development of new products. It is obvious that this country's research capacity is helping to attract major enterprises here.

Deputy Edward O’Keeffe

I welcome the Minister and his dedicated staff. They do great work for Irish farmers and for the development of Irish agriculture. As the figures in the accounts that have been presented to the committee reflect the historical situation, I will not deal too much with them.

I am concerned about the proposals for office rationalisation, however. Co-location has been mentioned. I support the idea that Teagasc and the Department's offices should be located together. The single payment and grant aid systems are now being run by the advisory and farm development services. Many developers are keeping on eye on the offices that need to be replaced. As I see it, the new buildings will cost much more than the existing buildings. Certain developers have many buildings on their hands. I would like us to have our own buildings so that we do not get involved in rescuing those who made significant mistakes in recent years. I am well aware of what is happening in my own county. Two major centres in County Cork — Moorepark and Clonakilty — would be ideal for Teagasc. They should be considered when rationalisation is being pursued in County Cork. I am aware of Teagasc offices that have shifted from one building to another at a substantial cost. It is not on.

I support the point made by Deputy Creed about temporary vets. I do not understand why vets are asked to undertake the herd-testing of cattle. That should be the job of technicians in this modern age. They are well qualified to do it. I appreciate that there are industrial relations problems, etc. This issue is increasing the costs of the Department and the farming community. Someone has to pay the bill at the end of the day. Many herd tests have to be paid for by farmers. Huge costs are also associated with factory slaughters. There is room for change in this regard. We have to move into the modern world. It is just not on to get people with degrees from Trinity College and other institutions to come out and do that kind of work. Any ordinary guy could test an animal for tuberculosis and brucellosis and then arrange to have the test read in a laboratory. There is no need for high-powered people to be doing it. I do not understand it. I have raised this issue with vets who have come to my yard.

The single farm payment is up for review in the context of the CAP healthcheck. What are the chances of getting the single payment that applies in Ireland doubled by 2013? This is an issue. As a native of Munster, which is this country's leading dairy region, I am concerned about the milk business. The dairy herd is not only the economic driver of Munster, but also the basis of much of our beef industry. There is no point in telling me that the dairy industry is not at a crossroads. Farmers who are milking cows are in dire trouble. It is no good to say they had a good year last year or the year before. Workers in the agriculture industry live from day to day. There is a real issue here.

I would like people to stop talking about New Zealand. I have been to New Zealand twice or three times. I have been there with the Department and in a private capacity. Given that New Zealand is in the south Pacific, whereas Ireland is in the north Atlantic, it is clear that we have differing weather conditions and climates. We need to tell those who talk about New Zealand, including many farmers, to stop doing so. When I studied agriculture in the 1950s and 1960s — I did not study much of it — Ireland was identified with Denmark, which has roughly the same level of quota as Ireland, although it may be slightly higher. At that time, Ireland studied the Danish model for all its agricultural activities. We now seem to be looking towards the south Pacific. If things were so good in New Zealand, it would be able to focus on the strong markets in places like China and Malaysia rather than having to worry about the WTO or come to Europe to sell its produce. New Zealand does not have a very diversified industry. We had a very diverse industry, but it was killed off.

We face a big job if we are to save the Irish dairy industry. Like the Minister, I deal with farmers all the time. The Minister represents his constituency just as I represent mine. Real action needs to be taken. I know farmers who are milking 50 or 60 cows. They are in desperate situations because they have borrowed little bits of money. The family farm structure continues to be the base of the Irish dairy industry. It is not a question of those with 200 or 300 cows, about whom we hear a great deal. They will not be there anyway because they will not pay the wages to milk the cows. I do not want to see every dairy farm being turned into a wind farm. I recently met a Scottish dairy farmer who told me it is not worth staying in farming. He has amalgamated his business with a neighbouring dairy farmer and they are now building a wind farm. There is an issue here. While I do not want to get too emotional about this, it should be taken seriously. I do not suggest that the Minister is not taking it seriously, but I know what is happening. The rationalisation of the agriculture industry that has taken place to date has not paid off very well. We have not seen very much out of it. There is not very much in my pocket as a result of it.

It suits people to advocate the New Zealand model, but I emphasise that it is not an appropriate model for Ireland. Let us be straight about it — Fonterra has not been a success. I have been to New Zealand. People are queuing up to join two or three small dairy industries in New Zealand. They are waiting to be called, even though they might never be called. I do not want to be misled. I am familiar with the business. Why, given the controversy, have we not considered a food agency for the food industry? Enterprise Ireland's approach to the food sector is contradictory. It does not mind if we import food from foreign countries provided it creates jobs, which is not in the interests of Irish food producers. Under its model, which is not the correct one, this will create a large number of jobs, whether in Shillelagh or Ballymagash. We need a food agency which will support Irish farmers and the food industry. While jobs are important, there is no point creating employment at the expense of Irish farmers and the food industry.

On exotic diseases, although the regional laboratories provide an excellent service, they are a Jack of all trades. Athlone is probably the only specialist laboratory for ovines, that is, sheep. Other laboratories in Kilkenny, Cork, Limerick and Sligo must become more specialist if we are to tackle diseases of this nature. A regional laboratory is needed in the southern region to address the issue because a Jack of all trades does not get far in the modern world.

Diseases such as IBR and BVD which affect our export industry are not being properly tackled. Work in the area of vaccinations at farm level is piecemeal. A farmer who vaccinates in one year will often believe he or she will get away with not vaccinating the following year only to find that the disease breaks out again. More action and assistance are required. It would not be expensive and should be supervised by the Department. Farmers should pay for the vaccination costs and an assistance programme should be introduced because we cannot cover all costs.

BVD has done considerable damage to the dairy industry and dairy herd in terms of production. IBR and other diseases are also having an impact. Discipline would be much greater in this area if we had a regional laboratory to address the problem in a more sophisticated and specialist manner. Why do we not have a specialist regional laboratory for counties Limerick and Cork? It could be located at the centre of the region and have a large veterinary staff. This is the direction in which the world is moving. If we do not address exotic diseases, farm income and exports will be affected.

I welcome the Minister and his dedicated staff, some of whom I know from having worked with them. Agriculture is an important industry which has returned to the forefront of Irish life since the recession. It is the job driver of the economy. Having toured the Munster constituency for the European elections, I am aware I did not receive many votes from farmers. I met farmers from Portumna to Castletownbere. The two most relevant indigenous industries are fishing and farming. We must rescue them and ensure they are given priority.

Deputy Tom Sheahan

On programme 2 in the annual output statement, a sum of €349 million has been allocated for food safety which the Minister described as "the bedrock upon which consumer confidence in the agrifood and fisheries sectors and, in particular, our export trade is built." Having examined the document, there appears to have been considerable tinkering with figures. Why was the €165 million of the pork contamination not taken from the €349 million allocated for food safety rather than moneys allocated for the disadvantaged areas scheme?

The Minister has stated he is keeping the installation aid and early retirement schemes under "active review". I ask him to explain this statement.

Every Department and local authority has been instructed to reduce its payroll costs by at least 3%. The Minister indicated the number of department staff has declined by 500 in recent years and that a significant number of additional staff will retire this year. However, the allocation for salaries and wages has increased by 1%. When one considers that incidental expenses have also been increased by 28%, one sees how money is hidden in accounts. I ask the Minister to explain this large increase and reconcile the reduction in staff with the increase in the allocation for salaries.

Deputy Creed referred to Backweston, a brand new, state-of-the-art facility, for which, we are informed, laboratory equipment cost €6.5 million. The Minister should not misunderstand my comments on food safety which is an integral part of the functions of the joint committee. In the light of developments last year, however, it is difficult to fathom the decision to increase the budget allocated for food safety by 53%. Did the Minister take on board the recommendations issued by the committee following its inquiry into pork contamination, including its recommendation to have a single food safety authority? During the committee's inquiry, we had ten or 11 bodies or quangos before us. How much do all the quangos associated with the Department cost?

It is difficult to reconcile the 5% reduction in the budget for forestry and the 8% cut in payments to farmers. Money is being moved in these accounts, but it is not being defined.

On fisheries, the allocations for the Marine Institute, Bord Iascaigh Mhara and the Sea-Fisheries Protection Authority have been reduced by 11%, 16% and 10%, respectively. Although the allocation for the Aquaculture Licences Appeals Board has been increased by 12%, recent figures which I do not have to hand show a significant number of aquaculture licence appeals have still not been dealt with two years after being submitted and that some of those lodged three or four years ago have not yet been dealt with. A budget of €460,000 has been allocated for a service that is not being provided.

Responsibility for coastal protection has been transferred from the Department. Vote 10 which has been transferred to the Office of Public Works received an allocation of €35,968 in 2008. I understood the budget for coastal protection was approximately €8 million. Have duties other than coastal protection been transferred from the Department to the Office of Public Works?

The fallen animal scheme has been discussed in detail at previous meetings of the joint committee. The allocation for the scheme has been reduced from €6.339 million to €5.7 million. Given the cost being borne by farmers, the figures do not add up. The allocation for feedstuff analysis has been reduced from €219,000 to €215,000, despite the fact that the lack of feedstuff analysis cost the Department €180 million last year. The committee discussed at length the lack of inspections in the area of feedstuffs, specifically at the plant associated with last year's case of pork contamination. Will the Minister explain the difference between the animal carcase disposal and fallen animal schemes? No. 14H relates to animal carcase disposal. We also had the category of fallen animals. Could the Minister join them up or differentiate between them for me please?

The last issue relates to co-funded receipts, funded by the European Union. Aquaculture and fisheries development has been reduced from €11.9 million to €3.3 million. The Minister outlined in his statement what he is doing for the fishing industry and that is the return we are getting back from Europe. The EU conservation and management of fisheries budget has been reduced from €500,000 to zero. I seek clarity on those issues.

In the interests of value for money and cost savings within the Department, from whom does the Department of Agriculture, Fisheries and Food buy its electricity? Have rents been renegotiated?

Deputy Bobby Aylward

I welcome the Minister and his officials. I thank him for presenting the Revised Estimates and the approximately €2 billion in support for farming this year. The early retirement and young farmer installation schemes were suspended. When will they be reintroduced? I accept that when the financial circumstances allow it the Minister will reintroduce the installation and farm retirement schemes. A few people were caught out during the transition period. I appreciate that the Minister is examining those cases. I hope he will look sympathetically at those farmers who have been caught out. If it is two years before the installation aid scheme is reintroduced, will there be a derogation for those young farmers who will then be aged over 35 years? Given that the scheme was suspended, will their cases be favourably considered?

Is there any hope of bringing forward the single farm payments and premia this year, especially due to the price of milk and the pressures on farmers? I heard a rumour that a premium payment will be made in October. Many farmers were involved in REPS 1, 2 and 3 but because of the change in paying REPS 4 at the end of the year rather than the beginning of the year, some farmers have not received any payment for up to two and a half years. Can anything be done for such farmers in the short term?

We are almost brucellosis-free in this country. I had a brucellosis herd test last week. Only one month is given to a farmer to sell his animals after that test. Because the disease is almost eliminated could we not extend the period up to between two and six months because by the time a blood sample is taken, sent away and returned, one has only approximately one week to sell one's animals if one is caught in that situation?

Deputy P. J. Sheehan

I welcome the Ministers and their officials. Difficult circumstances arose during the past 12 months. The Minister indicated that substantial funding would be expended this year on the early retirement and young farmer installation schemes. The committee is aware that the Minister decided to close both of those schemes to new applicants last October. He also outlined that the decision is also a consequence of the current budgetary constraints but the Minister is sympathetic to the problem of those who were caught in a transitional situation. When will the Minister decide on those applications? How many of the applicants were affected by the transition period? Was the European Union subsidising that scheme?

The Minister has been aware of the situation since last October and the people concerned are in limbo. They do not know what to do or whether their applications will be accepted by the Department. I do not expect there is a large number of such applications. When will the Minister make a firm decision on those applications? As the Minister is aware, people in my constituency are affected and they are contacting me day and night by telephone to find out when the Minister will make up his mind. Those people have no income whatsoever because they had made provision to retire on the transfer of their property to a son or daughter. Does the Minister expect there will be a return of both of those schemes? The retirement scheme provided welcome grants for elderly farmers to retire. It was an invitation to such farmers to retire and to allow young, trained farmers to take over from them. The installation grants gave young farmers something to help them get started.

The Minister outlined that the programme includes a range of measures to develop a sustainable consumer-oriented fishing sector. In excess of €12 million has been provided in the second strand of the grant for the Sea-Fisheries Protection Authority. I accept that body is a good one. However, due to the effort to conserve fish stocks, when will the Minister decriminalise those fishermen who are caught with up to six boxes of fish over the quota? Is it possible to introduce a system to allow fishing skippers to have extra fish? When a fisherman shoots his trawl, how can he discern how many fish or what species of fish goes into that trawl? He has to bring them in. Once fish are in the trawl they should be landed and processed because if they are thrown out of the trawl because a fisherman is over the quota those fish are dead. That is not conserving stocks.

A plan should be envisaged whereby the Sea-Fisheries Protection Authority can subtract extra fish that are landed from a fisherman's quota for the next week. Quota should be devised on a weekly basis. That would bring some rhyme or reason to conservation efforts, instead of dumping dead fish over the gunwale of a boat to the detriment of depreciating fish stocks. When does the Minister intend to decriminalise the skippers of those trawlers? Other European countries are doing that. In some cases local district courts impose a fine and the skippers concerned do not get a criminal record. A criminalisation record attaches to the Irish skippers involved. If they were going to America in the morning, they would be turned back at the airport.

In Castletownbere, as the Minister knows, there are between 20 and 26 sea-fisheries protection officials. If a young fellow goes out to fish for mackerel in the summer by line, rod and spinner from a small boat and catches more than six, the officials will confiscate the fish and throw them back in the sea. What form of conservation is that to a young fellow going out to catch a meal of fish? Across the bay at Dinish Island, the Spanish, French and German trawlers are coming in and landing their fish. Not one of the fisheries protection officers will dare go near their boats or check what they are landing, which is incredible. No wonder there is a backlash in the sea-fisheries industry, as mentioned by Deputy O'Keeffe. The Irish are being discriminated against to the benefit of the European trawlers, which make landings at any hour of the night, be it any time from 2 a.m. to 6 a.m. The fish are put into the back of a container truck and whisked to Vigo in Spain where they are put on the market, all within 48 hours. There are no checks at all on the catches brought to Spain from Castletownbere. It is disgraceful that this is happening in Europe. No wonder every fisherman in Ireland voted against the Lisbon treaty as a consequence. Why can the Department not level the playing pitch for each country's fishermen and prevent discriminatory action?

I tabled a question on 20 May 2009 asking the Minister for Agriculture, Fisheries and Food the predicted decreases in planting due to the reduction in the forestry premiums and whether the Minister would make a statement on the matter. The reply stated that maintaining an active afforestation programme is an important consideration in deciding how to make the most effective use of limited resources following the supplementary budget on 7 April. New planting is a key element of the Government's overall strategy for forestry. The reply also stated that funding for 5,500 hectares of new forestry planting in 2009 has been retained and that the Minister is confident that level of planting will be achieved in 2009.

When I left the Dáil in 2002, the rate of planting was between 20,000 and 30,000 hectares per year. This has reduced to 5,500 hectares. As the Minister knows, greenhouse emissions could be counteracted significantly by increasing the acreage planted every year. In spite of this, he reduced the forestry premiums. My information suggests the 20-year premiums, when first introduced, were supposed to be guaranteed to remain no lower than the rate that applied when the applicant entered the scheme. To the applicants' disappointment, premia have been reduced dramatically in the order of 18%. Was it guaranteed that the premium would be paid in good faith to farmers who planted 20, 100 or 500 acres on foot of hiring planting firms to plant the trees? Was the rate of premium guaranteed on the date applicants signed up to the scheme? I hope the Minister will be able to give me some definite information on the scheme and when he will make a final decision.

Deputy Aylward and I referred to a small group of farmers who were caught in a transition period pertaining to the early retirement scheme.

Chairman

I have a few matters to raise concerning the Minister's statement. The Minister referred to a significant decrease in the incidence in TB since 1999. I have asked on numerous occasions whether we are any closer to blood sampling than vaccination. I have been bothered by this for a long time because I feel blood sampling is the route we should be taking, if at all possible.

Farmers who are sending cattle to the slaughterhouse sometimes need to retest because the existing tests are out of date. This imposes an unnecessary cost on farmers across the country. I have been raising this on numerous occasions and it is a pure waste of money because the cattle are being tested in the factories in any case. Therefore, there is no need to impose the extra charge.

Deputy Sheahan raised the issue of the fallen animal scheme. When the subsidy was withdrawn, a charge was imposed on farmers by some of the renderers but the Minister and his officials did a deal with some of the renderers in Northern Ireland resulting in a much lower rate. They should be complimented on this. Does the Minister feel that when incineration is taking place — an incinerator is being constructed in County Meath at present and there are plans for another there, specifically for farm waste – the cost of dealing with fallen animals and meat and bonemeal that must now be exported for incineration will reduce significantly?

Deputy Brendan Smith

The fallen animal scheme, which was mentioned by a number of members, was introduced because of the BSE difficulties that we had a number of years ago. It was never intended that the scheme would continue to be financed fully by the Government. The costs had escalated considerably. Individual Members of the Oireachtas of all parties who spoke to me about this and all the farm organisations recognised that we had to lower costs. I refer to the costs of animal collection, knackery and rendering. We did not have the money to continue to sustain the investment. We are funding the collection of animals aged 48 months and over with a view to preventing disease.

A number of applications were submitted to us with regard to disposing product in Northern Ireland. We facilitated the very quick processing of those applications and, subsequently, their approval. Competition is badly needed in this enterprise and it has now been achieved, as is evident from the lower prices. Applications were also submitted by renderers with regard to the possibility of their being able to collect directly. We have made progress on this issue also. There is no doubt but that we must eliminate costs. They have not been reduced to the level I would like. However, the additional competition and outlets for the disposal of the product are essential. I have engaged with the Ministers for the Environment, Heritage and Local Government, and Communications, Energy and Natural Resources concerning energy production from the incineration of meat and bonemeal. For several years as the Chairman pointed out, Ireland was exporting the product to other countries. That is no longer sustainable. We must deal with environmental issues that affect us in our own country. The Department has engaged with several power plants on the disposal and incineration of meat and bonemeal and is confident of making progress in this regard.

I am anxious to reduce costs in the TB testing system but the move to another system is still under way. The committee may recall the chief veterinary officer, Mr. Paddy Rogan, going into some detail on the development of the new system of TB testing recently. If Ireland achieves brucellosis-free status, which I am confident will happen next month, the testing regulations and criteria will be changed. I have discussed this matter with departmental veterinary officials. We will naturally have to be cautious about how many changes will be implemented and how far they will go. We will engage with Oireachtas Members and the farming organisations on them. I am still somewhat nervous about going too far in relaxing the criteria. As those of us who live near the North of Ireland know, there is still a problem with brucellosis north of the Border. Nonetheless, there will be relaxations in the testing scheme which will save farmers money.

A major review of the regional laboratory network is under way. As in any other area of public service delivery, we cannot have a service in every county. We must ensure the service provided is the best possible. This approach will be applied to the regional laboratory network. There is also the State Laboratory located in Backweston which is an exceptionally good facility.

Deputy Ned O'Keeffe asked about the possibility of the co-location of departmental and Teagasc offices, referring to arrangements in Clonakilty and Moorepark in County Cork. In County Cavan, the Teagasc head office and advisory service is located at Ballyhaise Agricultural College. We cannot afford the luxury of high street offices when accommodation is available at existing departmental properties which can reduce costs. Combining offices in one location and having a critical mass of people together on the one site can reduce overheads. In the current economic climate, we have to do that to live within budgets, achieve efficiencies and deliver the best possible services to farmers.

Deputies Ned O'Keeffe and Aylward spoke of the current pressures on the dairy industry. All committee members have spoken to farmers and their representatives about the industry and I accept it is under much pressure. The credit crunch has also affected many dairy farmers. Regarding Deputy Aylward's query on the single farm payment, we have got agreement from Europe that we will be able to pay out 70% of it as an advance payment on 16 October. Deputy Ned O'Keeffe spoke about the pressures worldwide on the dairy industry. Better efficiencies are needed but we must ensure we do not have a dairy industry that only consists of herds of 400 cows.

Deputy P. J. Sheehan has brought to my attention those applying for the early retirement and young farmer installation schemes who have been caught in the pipeline, as have many other committee members. Departmental officials are analysing some of these applications. I am conscious that many of them had advanced their applications and are now faced with an income problem. I want to move these applicants on as soon as I can.

Unfortunately, as Deputy P. J. Sheehan pointed out, due to the pressure on finances the premium payments for forestry had to be reduced. There was a balance to be made regarding the establishment grant for afforestation programmes. I was conscious of keeping planting going so, unfortunately, the reduction in the grants came in the premium payments for those already in the scheme. Another contributory factor to the decline in afforestation levels was that land prices were expensive over the past several years, making much of it unavailable for forestry programmes. This year funding has been provided for the afforestation of 5,500 hectares.

At the recent fisheries Council meeting and review of the Common Fisheries Policy, I highlighted the necessity to deal with the discards issue as it makes no sense.

The Minister of State, Deputy Tony Killeen, recently met with Deputies Christy O'Sullivan, Jim O'Keeffe, P. J. Sheehan and Senator Donovan in Baltimore regarding issues between the fishing industry and the Sea-Fisheries Protection Authority. The Minister of State is working closely with all involved in tackling the issues raised at these meetings.

In reply to a recent parliamentary question the Minister of State, Deputy Killeen, outlined how the Commission proposed reducing the pressures of administrative sanctions. The European Commission recently introduced the draft new regulation intended to update and reform the EU fisheries control framework. This proposed regulation envisages facilitating a sanctions and penalty points system and allows for the application of administrative action or criminal proceedings of conformity with national law. In this regard, there may be a possibility of introducing administrative sanctions and a penalty points system for Irish vessels under this proposal. Legal advice is being sought to determine whether the current Commission proposal could accommodate their introduction in Ireland. The Minister of State, Deputy Killeen, and Deputy Jim O'Keeffe have published Bills as regards this particular issue. This is one issue that the Minister of State has been working on.

Deputy Tom Sheahan's question referred to the pork difficulties we experienced at the end of last year. The particular Vote that this allocation comes under is covered by the general markets support measure, from recollection. That funding did not come out of the existing Department of Agriculture, Fisheries and Food allocation. It was a totally new allocation from the Department of Finance to deal specifically with the difficulties we encountered. We had to make a decision that the industry needed these market support measures, and the Department has paid out substantial moneys in the meantime under that particular heading to assist the pork industry through the very serious problems that arose at that time. Indeed, this committee facilitated me before Christmas in putting through that particular Estimate.

In reply to Deputy Sheahan, we decided to put that funding into programme 4 as a market support measure, but it could have been in programme 2 on food safety. It was immaterial to us as to which particular programme it came under. However, it did not mean a reduction in funding for any scheme in the Department. It was totally additional funding.

In regard to forestry, the funding for this covers a number of elements — afforestation covers the premia payments and it also covers roads. We had to make choices as regards the envelope money available, on whether to reduce the level of plantation. Unfortunately we had to cut the premia by 8%. Deputy Sheahan also asked a question as regards fishery receipts. That relates to a pattern of the drawdown of EU programme expenditure over a number of years.

As regards the €0.5 million for waste processing facilities, in 2007 grant aid was made available under the scheme for the development of ten on-farm anaerobic digestive facilities with a maximum eligible investment ceiling of €1 million and a grant weight of 40%. The maximum grant was €400,000 and four of the ten projects have received formal approval to proceed. The remainder will receive similar approval when compliance with the Department's by-products regulations have been established. That is the purpose of this particular funding.

The Deputy also mentioned the State agency costs. Some €260 million is provided in Estimates for Bord Bia, Teagasc and Bord Iascaigh Mhara. I do not believe we should refer to any of those as quangos, since they are very good State boards that do excellent work over a whole range of areas. Indeed, there was a transfer of functions between Bord Iascaigh Mhara and Bord Bia in relation to the marketing of food, both domestically and internationally. That is where food marketing should be and Bord Iascaigh Mhara does very valuable work in the whole area of fisheries development.

Deputy Ned O'Keeffe spoke once again about the need for a food development agency. I have heard him both within our party structures and elsewhere over the years talk about this. It is a viewpoint that I never disagreed with and Deputy O'Keeffe would have stated clearly in the past that he thought the food-related functions of Enterprise Ireland should be removed from that body and put into a food development agency resulting from a merger of Bord Bia and other agencies or whatever. Naturally, that is a viewpoint I would not disagree with, and I want to stress this.

As regards his concerns about the single payment, I should like if it were possible to get that doubled, but I do not believe we shall be successful in that regard. However, as he rightly points out, the debate in Europe has commenced as regards the Common Agricultural Policy post-2013. That is going to be a very difficult debate since some countries are opposed to the level of funding being provided for CAP at present. At two Council of Ministers meetings we had discussions on the CAP post-2013 and I trenchantly and vigorously outlined the fact that the Common Agricultural Policy needs to be supported to the best possible extent financially. Other countries backed that position.

Not all 27 would share the same viewpoint as Ireland, as we realise from the position being taken by our near neighbour. We continually make the point that the EU must ensure the food production base in Europe is not diminished or decreased. We have to support our farming communities. Not alone has CAP supported agriculture and farmers, but it has also bolstered rural communities and supported the conservation and protection of the environment as well. We have argued that under no circumstances should Europe become more dependent on food imports from outside. There will be negative environmental consequences if we are going to import food into Europe from faraway continents. It makes no sense for a country such as Ireland, which has the most efficient food production — along with New Zealand — in the world and where, by definition, emissions are minimised. Under no circumstances should we have to curtail our food production base. In the event, the lack of production would have to be compensated for by importing food from faraway continents and countries with less efficient production systems — in some instances those countries would actually be cutting down forests to make way for grass production areas. That would do untold damage to the environment, with less efficient systems and we would be literally hawking food around the world, which would make no sense.

I can assure Deputy Ned O'Keeffe we have laid down very strong markers in relation to the need to support the Common Agricultural Policy post-2013, and under no circumstances should the present level of funding available to it be reduced. Our viewpoint is that it should be increased, but within the EU there are quite a number of countries which argue strongly that the level of funding should be reduced. However, we will defend the Common Agricultural Policy and resist moves to change the system to a regional or other basis.

The same argument is true as regards the single payments scheme. We intend to stoutly defend the very strong attributes of the CAP and its successes to date in relation to efficient systems of food production, both from a health and safety and nutritional viewpoints, and in terms of the general overall support it gives to the protection of the environment and regional development as well.

Chairman

There are a few supplementaries from Deputies Ned O'Keeffe, Tom Sheahan and P. J. Sheehan.

Deputy Edward O’Keeffe

I am very conscious of the concerns of the dairy industry in Ireland. The Minister referred to New Zealand being efficient. If I hear any more about that I shall get sick because we cannot look at New Zealand in an Irish context. I shall just compare the Irish dairy industry to the pig industry in 1974, when it collapsed, during the late Deputy Mark Clinton's time as Minister for Agriculture. The same is happening with the dairy industry, 30 or 40 years later.

I used to buy 1,000 pigs a week in Bandon, as Deputy Sheehan knows, and my son is still doing that with his unit. The point is that pigs were to be found on every farmyard in west Cork, and because there were no supports in place that industry was killed off. The dairy industry is at the crossroads, I want to assure the Minister. I am conscious of the fact that all that is left in rural Ireland and Munster in particular, driving the major towns, is the food industry — and the EU must come to the rescue.

I want to pay tribute to one man who understands the dairy industry, namely, Mr. Jackie Cahill. He has done more than any farmer I have ever seen in this regard and is to the forefront in spelling out what the issues are all about. It is about family farming and saving rural Ireland. That is precisely what he is doing and I support him in his efforts, as I do the Minister as regards his take on the CAP.

However, if something is not done there will be a crisis. I do not want to hear about New Zealand. When I first began to farm I learned only about Denmark. New Zealand was way down somewhere in the south Atlantic. Today we are modelling ourselves on New Zealand and those in the Irish Farmer’s Journal are assholes. I make no apologies about that and their take on New Zealand. Faraway cows have long horns.

Deputy Tom Sheahan

From the outset I never referred to An Bord Iascaigh Mhara and so on as quangos. What I will refer to as a quango is safefood Ireland. It has a budget of €12 million and when we had its officials in here——

Deputy Brendan Smith

That does not come under this Department. It comes under the Department of Health and Children.

Deputy Tom Sheahan

Fair enough. There are quangos associated with the Department——

Deputy Brendan Smith

I was referring to the bodies that are under the aegis of the Department of Agriculture, Fisheries and Food, and none of them is a quango.

Deputy Tom Sheahan

There is a 1% increase on the salary and wages bill, even though the Minister informed us that the Department has 500 fewer staff and many will be retiring this year. In every Department and agency across the State, a 3% cut has been demanded. Will farmers on year 21 of the farm waste management scheme, who signed a legally binding contract with the State, get the 8% ex gratia payment for the forestry scheme?

The Department had a budget of €9.75 million for Sunday work and so on, but this is now down to €8.5 million. Could the Minister consider cutting that out this year? What is the value of the Vote that is being transferred from the Department to the OPW? Is it just related to coastal protection? My understanding was that it was €2 million, but the transfer of the Vote to the OPW is €35.968 million.

Deputy P. J. Sheehan

How much in EU subsidies was the Department getting for the cost of the early retirement and young farmer installation schemes? What percentage was coming from Europe? When will the Minister make up his mind about the people who were caught in transition? These farmers are in limbo. They have no income, so the Minister should give an approximate date on when he will decide on those applications.

Deputy Bobby Aylward

Is there any chance of early payment of REPS 4?

Deputy Brendan Smith

I believe 75% of the 12,000 REPS 4 applicants have been paid at this stage. The remaining 25% will be paid in the next few weeks. There were difficulties with REPS 4 because new systems came in. The EU brought in new criteria that were very restrictive in respect of payment. When an application was received in the past, a payment of 100% could be made in advance of checking and inspections. The EU completely changed the criteria on REPS 4. All applications that were submitted had to be analysed before any payment could be made. Quite a large percentage of the applications for REPS 4 did not pass the relevant criteria on analysis. The Department, which also delayed the process, rightly engaged with planners and individual farmers in trying to clarify some of the deficiencies in the applications that were submitted, so that those applications would not be turned down or rejected. That added to the timescale, but we are very conscious of the need to approve the maximum number of applications, obviously after meeting the relevant criteria. The deficiencies in the applications have been overcome now and we want to get the remaining 25% out in the next few weeks.

Coastal protection was transferred to the OPW and this was worth €1.08 million, as some staff transferred from our Department as well. Deputy Sheahan also referred to Sunday work. The nature of the Department's work means that there are Department personnel at airports, ports, meat factories, dairy processing facilities and marts. This is not all Monday to Friday work. By nature, some work might occur on a weekend when nobody is rostered to work. Due to the nature of the Department's delivery of services, there is a continuous demand on personnel to work outside normal office hours. The Department must call on people to work outside their normal office hours, which is why overtime must be paid. However, the bill to which the Deputy refers is being reduced.

I will speak to Deputy P. J. Sheehan next week about when we hope to have those particular applications analysed and processed. Deputy Ned O'Keeffe spoke about efficiencies in dairy farming. When I spoke about this, I was not talking about the 200 or 300 cow farm. I visited Ballyhaise college recently, and it is located in an area where the land would not be as rich as Moorepark, but both colleges are developing a pilot system on the best management of grass, keeping cattle outdoors and so on. This can lead to lower costs and a better profit margin for the farmer. However, I am not talking about the 200 or 300 cow units.

Denmark has a milk quota that is similar to our own, yet that country has only one quarter the number of dairy farmers that we have. I am open to correction on that, but I remember chatting to the Danish Minister for Agriculture, and I recall that the figure she gave for the number of people in dairy farming was not much more than a quarter of our number. I will check that out and get back to the Deputy on it.

Deputy Edward O’Keeffe

There is a substantially higher yield per cow.

Deputy Brendan Smith

That is correct. All the work in Ballyhaise and Moorepark is important, as is breeding.

Deputy Edward O’Keeffe

I do not care what Ballyhaise or Moorepark do, there is no way we can produce milk at 20 cent per litre. This quota came in at 34 and 35 cent per litre, so the whole thing is up in the air. Jackie Cahill understands the business. He is making the case very clearly and I admire him for that. An increasing quota is going to be a disaster for Irish farmers. I said that to the Minister when he was going to Brussels discussing the quota.

Deputy Brendan Smith

That particular organisation to which the Deputy refers was completely wrong in the advertisements it put in our national newspapers some weeks ago. It must have a lot of money to spend when it could afford to have these advertisements. They were factually incorrect and I take exception to the organisation's claim that the additional milk quota was the cause of our problems this year. We are way under quota, as are most other countries. The decision by the EU to provide additional milk quota from now on has not been a factor in current dairy problems. I do not underestimate the particular problems facing the dairy sector, but I must say that that particular organisation was totally wrong in the content of its advertisements. The additional quota is not the problem at the moment and I take exception to what that organisation did.

Deputy Tom Sheahan

Does the Minister have any information on the 8% ex gratia payment on year 21 for forestry?

Deputy Brendan Smith

The Minister of State, Deputy Killeen, has been engaging with different forestry interests and farm organisations about a proposal like that. He has met them and my recollection is that he is meeting some of the people in the forestry industry again very soon on that issue. The Deputy would need to speak to the Minister of State, Deputy Killeen, about the matter.

Deputy Tom Sheahan

We want to bring confidence back into this area.

Deputy P. J. Sheehan

The Minister has failed to answer my question.

Deputy Brendan Smith

My apologies. The EU funding is 50%. By our suspension of those schemes, we have not lost any money from Europe because it is in our overall rural development programme where we nationally provide more co-funding than is required in order to draw down the maximum from the EU. We have not lost anything by the suspension of those schemes.

Deputy Edward O’Keeffe

Is there any hope we will get a higher level of intervention, export refunds and private storage for the dairy industry? We are now back where we were when we joined the EU with regard to milk prices.

Deputy Brendan Smith

The export refunds were increased last week. We have kept this issue on the agenda. During the healthcheck, I was practically a lone voice arguing trenchantly for the retention of aids to private storage, export refunds and intervention. Fortunately, at the conclusion of those healthcheck negotiations last November, some other countries came in and backed us up. If the healthcheck had gone through and those market management measures or mechanisms were done away with, we would be in horrific trouble today, perhaps as much trouble as the dairy industry is in. The issue of milk is on the agenda again for the next Council of Ministers meeting on about 20 June. We have already been with Commissioner Fischer Boel on a number of occasions arguing not just to use the mechanisms but to use them effectively.

One other issue that concerns me is that when these measures were operational in the past, they only ran into the month of August. We have met the Commissioner in regard to the need to continue using them beyond August and she has indicated she is favourably disposed towards this. The outlook definitely suggests to us that we need them to be used beyond August, and not just used but used effectively. Subsequently, we do not want to put product that has been taken into intervention back on the market in an unregulated way.

Deputy Edward O’Keeffe

The farmer with 50 or 60 cows will stay as long as he can but the 200-cow farmer we were talking about, similar to those in New Zealand, will run because he has a labour element and a management element to his business. The family man will stay, however, and it is him I am interested in. I am not interested in the man with more than 80 cows because he is no good to society. He is an entrepreneurial type of guy who is interested in making money from the business. I am concerned about the family farm in rural Ireland, particularly in the Munster constituency and perhaps in south Leinster also. They are in real trouble, which I want to state clearly here today. This happened to the pig industry in 1974, when every small pig producer was affected. I was involved in buying pigs in Bandon and I finished up. The same thing is happening some 30 or 40 years later and it is a situation we can ill afford not to protect. While I accept the Minister is doing his best for the industry, I want to emphasise this point to him.

Chairman

If there are no further comments on the programmes or subheads, that concludes the select committee's consideration of the output statement and the Revised Estimate. On behalf of the select committee, I thank the Minister and his officials for attending today's meeting.