Written Answers Nos. 233-242
233. Deputy Michael Fitzmaurice asked the Minister for Agriculture, Food and the Marine the reason his Department broke an agreement that the Government and eight other countries (details supplied) decided to apply, that is the taxation on the transfer of entitlements without land; and if he will make a statement on the matter. [14302/17]
Amharc ar fhreagraIn accordance with the EU Regulations governing the operation of the Basic Payment Scheme, each Member State has the option to apply ‘clawback’ to the transfer of entitlements without land. Decisions pertaining to the use of such optional provisions are taken by individual Member States and do not require approval of the EU. Furthermore there is no agreement between Ireland and any other Member State in respect of decisions around the application of ‘clawback'.
Ireland has applied such a ‘clawback’ to the sale of entitlements without land and has informed the EU Commission accordingly.
234. Deputy Michael Fitzmaurice asked the Minister for Agriculture, Food and the Marine when Ireland sought the permission from the EU not to impose the percentage clawback as agreed in relation to the transfer of entitlements without land; and if he will make a statement on the matter. [14303/17]
Amharc ar fhreagra235. Deputy Michael Fitzmaurice asked the Minister for Agriculture, Food and the Marine if he received the required approval from the EU Commission in relation to the clawback regarding the transfer of entitlements without land. [14304/17]
Amharc ar fhreagraI propose to take Questions Nos. 234 and 235 together.
In accordance with the EU Regulations governing the operation of the Basic Payment Scheme, each Member State has the option to apply ‘clawback’ to the transfer of entitlements without land. Decisions pertaining to the use of such optional provisions are taken by Member States and do not require approval of the EU. Ireland has applied such a ‘clawback’ to the sale of entitlements without land and has informed the EU Commission accordingly.
236. Deputy Michael Fitzmaurice asked the Minister for Agriculture, Food and the Marine the reason the current leasing entitlements without land clawback exception has been allowed to happen alongside the 50% clawback conditions of sale of entitlements without land, when less than €14,000 was drawn from these clawbacks in 2016; and if he will make a statement on the matter. [14305/17]
Amharc ar fhreagra237. Deputy Michael Fitzmaurice asked the Minister for Agriculture, Food and the Marine his views on the suggestion by an organisation (details supplied) that the same percentage, 20% clawback, be implemented on both sale and leasing of entitlements without land; and if he will make a statement on the matter. [14306/17]
Amharc ar fhreagraI propose to take Questions Nos. 236 and 237 together.
In accordance with the EU Regulations governing the operation of the Basic Payment Scheme, each Member State has the option to apply ‘clawback’ to the transfer of entitlements without land. Ireland opted to apply clawback on the sale of entitlements without land.
EU Regulations state that the application of "clawback" must not present a substantial obstacle or prohibition of the transfer of entitlements in a Member State. Ireland is one of the only Member States in the EU that operate a "conacre" system, and widespread corresponding short term leasing of entitlements. In many cases the only option open to Irish farmers at risk of losing entitlements due to non usage is to lease entitlements without land to a farmer who has "naked" hectares to use them, thereby safeguarding their assets. The introduction of "clawback" on leased entitlements would present a significant obstacle to this option.
The option to lease entitlements without land is critical for many Irish farmers who are unable to obtain sufficient hectares of land to use their entitlements annually. Under the Single Payment scheme the rotation of entitlements safeguarded farmers’ entitlements but this is not available under the Basic Payment Scheme where 100% of farmers’ entitlements must be used at least once every two years. A large number of farmers in Ireland depend on the availability of affordable leased/ rented land to use their entitlements. If farmers are unable to obtain leased/ rented land through unavailability or high price they are at risk of losing their Basic Payment scheme entitlements permanently through non-usage. In many cases the only option open to them is to lease their entitlements without land to a farmer who has naked hectares to use them, thereby safeguarding their assets.
Decisions in relation to Basic payment Scheme entitlements including the National Reserve and ‘clawback’ are made in consultation with the Direct Payments Advisory group which includes members of the main farming bodies and agricultural education and advisory services. Following consultation with this group a decision was made to reduce the level of ‘clawback’ on the sale of entitlements without land from 50% in 2016 to 20% in 2017. The group did not express support for the option to apply ‘clawback’ to the lease of entitlements without land.
238. Deputy Michael Fitzmaurice asked the Minister for Agriculture, Food and the Marine his plans to keep the national reserve refunded in the future to cover all areas currently requiring funding, such as new entrants, forgotten farmers and young farmers; and if he will make a statement on the matter. [14307/17]
Amharc ar fhreagraIn 2015 the National Reserve fund was based on a 3% cut to the Basic Payment Scheme financial ceiling and provided some €24 million in funding. Some 6,250 applicants were allocated entitlements under the 2015 National Reserve. There was no National Reserve in 2016 as all available funding of €24 million had been fully utilised under the 2015 scheme. In 2017 the National Reserve is being funded from a linear cut to all entitlements held under the Basic Payment Scheme.
In line with the Programme for Government commitment Department officials consulted with the EU Commission with regard to funding of ‘specific disadvantage’ categories such as ‘Forgotten farmer’ under the National Reserve in 2017 and future years. The Commission has confirmed that Member States cannot use the proceeds of a linear cut to fund the specific disadvantage categories of the National Reserve. The only funding option for this category is natural replenishment, but only after the 2 priority categories of ‘young farmer’ and ‘new entrant’ have been catered for.
Decisions in relation to the funding and operation of the National Reserve in future years can only be made once the position regarding remaining funding following the 2017 scheme year becomes apparent. Consultation between Department officials and the Direct Payments Advisory Committee comprising members of the main farming organisations, agricultural education and farm advisory bodies takes place annually as part of the decision making process for the National Reserve.
239. Deputy Michael Fitzmaurice asked the Minister for Agriculture, Food and the Marine his plans to put a term limit on the number of years in a row a farmer can lease out entitlements to others, rewarding non-farmers; and if he will make a statement on the matter. [14308/17]
Amharc ar fhreagraThe EU Regulations governing the implementation of the Basic Payment Scheme do not permit Member States to place any limitations on the leasing of entitlements, such as the application of a term limit on the length of leases. In addition any such limitation would be contrary to existing Government policy, such as those contained in the Agri-taxation Review, which provides the granting of tax relief to include entitlements where a farmer leases both his land and entitlements. One of the qualifying criteria for the tax relief is the lease must be for a definite term of five years or more. Applying a limitation to the number of year’s entitlements may be leased, would undermine the extension of the tax relief to cover entitlements and therefore be contrary to existing policies aimed at supporting generational renewal in the agriculture sector.
240. Deputy Michael Fitzmaurice asked the Minister for Agriculture, Food and the Marine if an organisation (details supplied) has been invited to join the direct payment advisory committee; and if he will make a statement on the matter. [14309/17]
Amharc ar fhreagraAn application from the farmers association named has been received by my Department and is currently under consideration.
241. Deputy Kevin O'Keeffe asked the Minister for Agriculture, Food and the Marine if a specific scheme has been over-subscribed (details supplied); and if so, if additional funding will be put in place to meet the demand. [14317/17]
Amharc ar fhreagraThe “Agriculture Cashflow Support Loan Scheme” was developed by my Department in co-operation with the Strategic Banking Corporation of Ireland (SBCI), making €150 million available to farmers at interest rates of 2.95%. One of my priorities has been to address the impact of the change in the sterling exchange rate and lower commodity prices in some agriculture sectors. This Scheme is significant in this regard, providing farmers with a low cost, flexible source of working capital, which will allow them to pay down more expensive forms of short-term debt, ensuring the ongoing financial sustainability of viable farming enterprises.
SBCI uses the €25 million of public funding provided by my Department to leverage the total amount of €150 million and, along with the European Investment Fund’s ‘COSME’ (the EU programme for the Competitiveness of Enterprises and SMEs), is providing the guarantee required to underpin the loan’s flexibility and lower the cost of the loans. The Scheme is administered through AIB, Bank of Ireland and Ulster Bank and they will report on progress to the SBCI on a regular basis, although no official returns have been made to my Department as yet. However all of the banks have confirmed that they have applications up to the amounts available under the Scheme. There may be some residual availability but this will only emerge as applications are processed and loans drawn down.
My Department’s contribution of €25 million includes €11 million from the EU’s ‘exceptional adjustment aid for milk and other livestock farmers’. It was this exceptional aid package which facilitated the Scheme from an EU State Aid perspective, and additional funding is not possible under this particular arrangement. Other sectors, such as tillage and horticulture, were facilitated by national funding under the ‘de minimus’ State Aid rules.
I am very pleased at the very positive reaction by farmers to the Scheme, which has proved that significant demand exists for low cost flexible finance. I hope that the commercial banks will respond positively to this demand by reducing interest rates and providing more flexible terms for cash flow loans in the future. I plan to meet with the Chief Executives of the banks shortly to discuss this and other issues relating access to finance in the agri-food sector.
242. Deputy James Lawless asked the Minister for Agriculture, Food and the Marine further to Parliamentary Question No. 232 of 14 December 2016, in which it is stated that a review of documentation is occurring, if he will provide an update in this regard. [14322/17]
Amharc ar fhreagraAn application under the 2016 Basic Payment Scheme was received in my Department from the person named on 13 May 2016. As I indicated in my reply to the previous PQ mentioned the person named had submitted additional documentation in respect of a dual claimed parcel. This documentation has been reviewed by my officials.
I can confirm that this review is complete, and the original decision on the dual claimed land remains unaltered. As the person named has not farmed the lands in question, it cannot be included as part of his 2016 application which has now been fully processed with respect to the remaining parcels.
