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Severe Weather Events

Dáil Éireann Debate, Tuesday - 25 September 2012

Tuesday, 25 September 2012

Ceisteanna (48, 49)

John Halligan

Ceist:

48. Deputy John Halligan asked the Minister for Agriculture, Food and the Marine his views on the recent announcement by the Irish Farmers Association that inclement weather may cause yields to be reduced by up to 25% or the loss of 500,00 tons in potential grain production which could potentially leave the sector down an estimated €100 million compared to 2011; his further views on the impact this will have on the agricultural sector as a whole; if he will also confirm if any plans are being considered by him to bridge the gap and mitigate the losses which will undoubtedly adversely affect the agricultural community; and if he will make a statement on the matter. [40618/12]

Amharc ar fhreagra

Éamon Ó Cuív

Ceist:

49. Deputy Éamon Ó Cuív asked the Minister for Agriculture, Food and the Marine the actions taken to date and the proposed actions to assist farmers affected by the bad weather this summer, in view of the effect also of the drought in the USA; and if he will make a statement on the matter. [40491/12]

Amharc ar fhreagra

Freagraí ó Béal (24 píosaí cainte) (Ceist ar Agriculture)

I propose to take Questions Nos. 48 and 49 together.

I thank the Deputies for raising this very significant issue. We have had the worst summer rainfall on record since 1962. Rainfall for most of the country was twice the average for the months of June, July and August. This has caused significant problems and pressures for farmers, even on the most fertile of farms. We have tried to respond as best we can. What I said to farmers was that I would not put a short-term compensation scheme in place and then have to take the money back off them at budget time, as it would not be sensible to do that on any grounds. Instead, we have tried to do what we can do within budget, including, for example, pushing back and giving early notice to farmers of the pushing back of the slurry spreading and chemical fertiliser deadlines in order to extend the grazing season by at least two weeks and allow farmers to take advantage of what was a period of dry weather. This is to try to ease pressures on indoor feeding which will clearly be a problem this winter.

In addition, I met on a bilateral basis the Commissioner to discuss the consequences of the wet summer and made a request to him for an advance payment of 50% of the single farm payment. It is true this has almost become the norm in recent years, but it still needs to be applied for, and Ireland was the first country to apply for it. I am trying to improve cash flow for farmers in the autumn as livestock farmers, in particular, will have to spend more money on feed. We are also ahead of schedule in getting out disadvantaged area payments. As I said, approximately €150 million will go out to farmers this week in disadvantaged area payments. Some of these payments will be made to farmers who are being given a derogation from the new criteria announced last year.

Again, I am conscious that farmers need money in their hands because of the poor summer and because of cash flow problems that some are experiencing at the moment. We are doing what we can and today, on top of that, we are announcing a new AEOS scheme which I hope will be welcomed by farmers across the board.

The Minister is aware that some farmers are now at crisis point. The three issues here are Government cuts, soaring input costs and, of course, the weather, which is profoundly affecting profitability and output at farm level. Not only has the bad weather resulted in a need for farmers to buy more feed for cattle here, but the US drought has resulted in an increase in the price of grain and animal feed internationally. If the current bad weather continues, the IFA estimates that farming incomes could drop by 30%. Some farmers in my constituency in Waterford are fearful that should the disproportionate cuts already imposed on farm schemes continue in the upcoming budget, their livelihood is in real danger of being wiped out completely. I have been told that some farmers are achieving average winter wheat yields of five to seven and a half tonnes per hectare less than last year, while quality issues such as low hectolitre weights have forced merchants to introduce price reductions.

Will the Deputy frame a question please?

Many farmers have told me they will struggle to meet the required quality parameters demanded by the industry. The Government is significantly contributing to their worries. The 17% cuts in farm schemes in 2012 were almost three times the 6% cut applied across the entire agricultural budget and far in excess of the 3.5% taken out across other Departments. An IFA survey conducted at the recent Tullamore Show suggests the weather has negatively impacted on the production of more than 90% of all farmers, with more than 60% estimating a production loss of greater than 10%. Furthermore, 60% of those surveyed have purchased extra feed concentrate at an average additional cost of €3,700.

The Minister spoke about short-term compensation. Farmers, particularly small farmers, have their backs to the wall now. An immediate input of relatively small moneys - maybe a couple of million euro - might stop small farmers from going to the wall and going out of business. They are out of time and do not want to hear the Minister say that if he gives them money now, he might have to take it back later. They need money immediately that cannot be taken back.

They are getting it this week.

The Minister to reply.

Many of those farmers are getting their disadvantaged area payments this week.

I wish to give the House some figures on the schemes, because Deputy Ó Cuív raised the issue earlier and sought such data. Payments worth some €154 million under the disadvantaged areas scheme will begin tomorrow, 26 September. This funding will provide a boost to the rural economy and will benefit all areas of the country. It is too early to estimate, at this stage, the level of total payments which will be made under the scheme in 2012 because of the qualification criteria issue, which is working through the system. REPS payments for 2011 are currently up to date. A total of €64 million has been paid out to date and I envisage that by the end of 2012 a further €121 million will be spent. AEOS payments are well advanced and continue to issue as quickly as possible. To date, €23 million has been paid and a further €34 million will be paid out before the end of 2012.

We are prioritising getting payments out to farmers ahead of schedule and we are currently well ahead of schedule in comparison to last year. I am more than conscious of the pressures that farmers are under. This affects farmers not only in disadvantaged areas but also in places such as east Cork and east Waterford. Farmers who were harvesting spring crops of three tonnes or more per acre last year will be lucky to reach two tonnes per acre this year. There are similar losses for winter crops. There was a significant increase in the amount of land that was put into arable crops this year because last year prices were strong, yields were very strong and it was profitable.

Unfortunately, there has been a significant reduction in yield and quality this year and although approximately 2 million tonnes of grain will be harvested we could do with more than that. As the Deputy is probably aware, this country only produces approximately 50% of its requirements in terms of grain usage so we rely on importing the rest at a high cost at the moment. That is a big problem. In order to try to address the problem we are trying to ease cashflow problems for farmers by supporting schemes at an early stage.

Does the Minister agree that for most farmers this will be an incredibly difficult year but for some farmers it is an utter disaster? Some farmers lost all their silage while others could not make it. Does the Minister not agree that some form of assistance should have been given on an emergency basis for extreme cases? The total cost of emergency assistance would be literally a margin of error within the total Department's budget.

The Minister is making a virtue out of something that happens every year, namely, the 50% first payment of the single farm payment.

I did not make a virtue out of it.

As the Minister said himself, that is more or less a standard approach. The disadvantaged area scheme, DAS, is always paid out around the time of the ploughing championship week. There is nothing new there. Other than what the Minister's colleague did in terms of extending the dates for the spreading of fertiliser and slurry-----

I had nothing to do with it.

I presume the Minister made representations to his colleague. He could confirm that. The Minister, Deputy Coveney, did virtually nothing.

As a result of the significant delay involved in farmers getting their payments, does the Minister intend withdrawing the DAS stocking density requirement on farmers? Will the Minister announce the continuation of the beef suckler cow welfare scheme and the sheep grassland scheme, which are vitally important now because they give money to farmers to buy feed? Has the Minister had discussions with the banks to ensure that low-interest loans are easily available to farmers who need money for stocking and who have a good track record?

Deputy Ó Cuív asked a lot of questions. I totally reject that we have done nothing. It is quite the opposite. I have met all the banks in this country and I met a number of them on more than one occasion. Extra funding has been made available. Ulster Bank, for example, launched a specific food harvest fund. In the past fortnight Bank of Ireland launched with me a €250 million fund specifically targeting agriculture and farmers. That is on top of another €250 million fund that was launched a number of months ago. We have been active in pursuing and pushing banks to specifically tailor funding for the agrifood sector and for farmers, many of whom need to invest at the moment in anticipation of potential growth in the future. We have been very active on the banking front.

Having said that, I would like to see more from the banks, in particular for sectors that are currently in crisis. The pig sector, and to a certain extent the poultry sector, are under severe pressures because of the price of feed. In many cases they need bridging finance to get them through a difficult period. I hope and expect that banks would provide them with the necessary support. I have been speaking to farmers' organisations about that.

No, we are not making any changes to the stocking density requirements. We made changes last year on eligibility in an effort to try to avoid cutting the scheme for everybody. We wanted to try to differentiate between farmers who get the majority of their income from farming and those who are essentially farming for schemes, many of whom do not live in disadvantaged areas but are renting and taking out land in order to draw down schemes. That is not the kind of farmer we have the luxury of supporting at the moment-----

That is a different issue altogether.

-----when we need to support real farmers in disadvantaged areas.

That is why we also have a fair derogation system, which is being applied at present, and will have a fair appeals system with an independent chair, who is currently the chair of Connacht Gold. I say that in case anybody is concerned that the west of Ireland is not being represented - it is.

This has been a very difficult year and for many farmers continues to be so. It is true that farmers will not get the kind of bumper year's harvest they got last year. Farming has peaks and troughs in terms of weather, pressure, pricing and so on. It is my job to get farmers through the tough years and ensure they can benefit to the maximum in the good years. That is what we are trying to do with all the measures we are taking.

Deputies Halligan and Ó Cuív both have questions. I ask them to be brief because they have had a good innings.

Will the Minister rule out, for the record, any further cuts in farm schemes in 2013? Many farmers have asked that question.

Many small farmers I speak to are not getting the service they should be getting from the State-controlled banks; they are not getting money. The Minister might comment further on that. What have the banks said to him regarding farmers who have approached them for medium-term loans to help them out in the crisis?

I understand there are considerable delays in getting stocking loans from the banks so that by the time one gets such a loan one probably will have been forced to sell the stock. What steps are being taken to ensure the banks make decisions speedily? Second, can the Minister confirm the continuation of the beef suckler cow welfare and the sheep grassland schemes? Third, what steps has the Minister taken to ensure competition in the market by increasing live exports to break the power of the factories to doctor prices when there is a glut on the market? For example, hill sheep under a certain weight are not saleable in factories at present because the factories pick and choose as it suits them. What steps has the Minister taken to ensure there will not be a collapse in the market, such as we have seen in recent weeks?

A final reply from the Minister.

I will not start to give assurances one way or the other in regard to schemes for next year because that is a budget debate and I will not make early budget promises. However, I am very conscious of the importance of schemes for farmers' incomes and will try to protect them as best I can. I will not make absolute claims at this stage, however, three months away from the budget.

In regard to what the Deputy termed State-controlled banks, we may own them but we do not entirely control them. Banks make decisions on the basis of business plans and proposals around loans. I am no apologist for banks but I can tell the Deputy I am pushing them as hard as I can to try to prioritise agriculture-----

Across the sector, banks appear to pay no attention to the Minister.

-----and farmers, and the amount of money being spent in terms of the percentage of loans being made. The amount being spent on agriculture, agrifood and farming is considerably above what it would have been in previous years.

In answer to Deputy Ó Cuív's question, we are doing a great deal on live exports. We have opened up an entire series of new markets, the most recent example being Libya, which is now available for live cattle exports, as are other countries. Wherever there is a commercial opportunity to do this we should do so as the role of live cattle exports is very important in terms of keeping factories honest, as farmers would say. I will continue to facilitate that in Government policy.

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