Oireachtas Joint and Select Committees
Thursday, 4 May 2023
Public Accounts Committee
Appropriation Accounts 2021
Vote 30 - Agriculture, Food and the Marine
Department of Agriculture, Food and the Marine - 2021 Financial Statements
Fishery Harbour Centres
9:30 am
Brian Stanley (Laois-Offaly, Sinn Fein)
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I welcome everyone to the meeting. If attending the meeting from within the committee room, members and witnesses are asked to exercise personal responsibility to protect themselves and others from the risk of contracting Covid-19. Members of the committee attending remotely must do so from within the precincts of the Parliament. This is due to the constitutional requirement that, to participate in public meetings, members must be physically present within the confines of the place where Parliament has chosen to sit.
The Comptroller and Auditor General, Mr. Seamus McCarthy, is a permanent witness to the committee. He is accompanied this morning by Mr. Paul Southern, deputy director of audit at the Office of the Comptroller and Auditor General.
This morning, we will engage with officials from the Department of Agriculture, Food and the Marine to examine the following matters: Appropriation Accounts 2021, Vote 30 - Agriculture, Food and the Marine; and the 2021 Financial Statements for fishery harbour centres. We are joined by the following officials from the Department of Agriculture, Food and the Marine, which has a full team: Mr. Brendan Gleeson, Secretary General; Mr. Bill Callanan, assistant secretary; Mr. Colm Hayes, assistant secretary; Ms June Fanning, deputy Chief Veterinary Officer; Ms Roni Hawe, principal officer; and Ms Caroline Ball, principal officer.
We are also joined from the Department of the Environment, Climate and Communications by Mr. Marc Kierans, principal officer, and Mr. Gerry Glabby, principal officer; and from the Department of Public Expenditure, National Development Plan Delivery and Reform by Ms Georgina Hughes–Elders, principal officer. They are all very welcome. I remind all those in attendance to ensure their mobile phones are switched off or on silent mode.
Before we start, I wish to explain some limitations to parliamentary privilege and the practice of the Houses as regards reference witnesses may make to other persons in their evidence. The evidence of witnesses physically present or who give evidence from within the parliamentary precincts is protected, pursuant to both the Constitution and statute, by absolute privilege.
As witnesses are within the precincts of Leinster House, they are protected by absolute privilege in respect of the presentations they make to the committee. This means that they have an absolute defence against any defamation action for anything they say at the meeting. However, witnesses are expected not to abuse this privilege and it is my duty as Cathaoirleach to ensure that this privilege is not abused. Therefore, if their statements are potentially defamatory in relation to an identifiable person or entity, they will be directed to discontinue your remarks. It is imperative that they comply with that direction.
Members are reminded of the provisions within Standing Order 218 that the committee shall refrain from enquiring into the merits of a policy or policies of the Government, or a Minister of the Government, or the merits of the objectives of such policies. Members are also reminded of the long-standing parliamentary practice that they should not comment on, criticise, or make charges against a person outside the Houses or an official either by name or in such a way as to make him or her identifiable.
Before we move to opening statements, Mr. Gleeson is welcome back to the committee. He was here last year on 21 April as I recall it. In preparation for this meeting, the committee requested information from him, as Accounting Officer for the Department of Agriculture, Food and Marine, with regard to value for money. This was so the committee can assess whether he can demonstrate that value for money has been achieved in the accounts under his responsibility.
The committee’s request sets out eight questions, but Mr. Gleeson's initial response only provided answers to questions nos. 1 to 4, and further briefing with additional information was only received late yesterday afternoon after 4 p.m. Furthermore, the committee requested an update with regard to this committee’s recommendations in its report, Examination of the 2019 Appropriation Account for Vote 30 – Agriculture, Food and the Marine, and Related Financial Matters. This information was requested to be submitted last Friday but was only received yesterday afternoon. As Mr. Gleeson can appreciate, the late submission of briefing material leaves us little time to analyse it and prepare for today’s engagement. I note that he was advised by the secretariat of the committee’s intention to engage with him today. A note went out to him on 29 March and a formal invitation and request for information on value for money and previous recommendations was issued on 3 April. That is reasonable and sufficient notice. I would be grateful if he could explain to us what happened and why there was a late submission of the value for money and additional information we requested.
Mr. Brendan Gleeson:
I thank the Chairman and wish members a good morning. The Chairman is absolutely right. I fully appreciate that the committee needs time to consider these things before we have the session. I can only apologise for that. The deadline for the submission for the value for money stuff was last Friday. I received a document on Friday, which was not quite complete. It listed all the value for money studies, but it did not say what proportion of the Vote was taken up by each of those. It may not have fully elaborated the actions we took on foot of those value for money studies. On balance, I felt it was better to get that partial information to the committee within the deadline and, therefore, we sent over that incomplete document as it was, but at least it showed that value for money studies are something we take seriously. We do at least two of them per year in significant expenditure areas. It is a process overseen by the Department of Public Expenditure, National Development Plan Delivery and Reform and it is something we take very seriously. However, there is no excuse for not getting it to the committee on time. We should have sent the completed documents on Friday. I fully apologise for that.
Brian Stanley (Laois-Offaly, Sinn Fein)
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Mr. Gleeson will understand that as a committee-----
Brian Stanley (Laois-Offaly, Sinn Fein)
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-----we have to wade through a lot of material, and it is important that we get it in time in order that we can prepare properly. I thank him for the explanation.
I will now bring in the Comptroller and Auditor General, Mr. Seamus McCarthy, for his opening statement.
Mr. Seamus McCarthy:
The appropriation account for Vote 30 - Agriculture, Food and the Marine records gross expenditure of €1.69 billion in 2021. The expenditure was divided across four expenditure programmes. The programme of farm sector schemes and controls accounted for just under half of the spending.
On the receipts side, the Department had appropriations in aid totalling €387 million in 2021. The bulk of these receipts comprised transfers from the EU. Net expenditure under the Vote in 2021 was €188 million less than the amount provided for the year. With the agreement of the Minister for Public Expenditure, National Development Plan Delivery and Reform, €29.9 million in unspent capital allocations across a number of subheads was carried over for spending in 2022. The remainder of the surplus for the year, €158 million, was liable for surrender to the Exchequer.
I issued a clear audit opinion with regard to the appropriation account. However, I drew attention to disclosures in the statement on internal financial control of non-compliance with procurement rules that occurred in respect of contracts that operated in 2021 to the value of €3.8 million.
The statement on internal financial control also discloses significant financial risks faced by the Department of Agriculture, Food and the Marine as well as the steps taken to address those risks.
A number of the schemes provided for in Vote 30 are co-funded by the EU. That EU funding is brought to account in the Vote as appropriations-in-aid. Separately, the Department is also the accredited paying agency in Ireland for EU payment schemes that are not co-funded by Ireland. Such EU payments, including the single farm payment to farmers, are accounted for separately from the Vote. A summary of the EU-related transactions is disclosed in note 6.1 of the appropriation account. In total, the EU direct payments and payments into the Vote amounted to just over €1.5 billion for 2021.
The Department is also directly responsible for the management of the six designated fishery harbour centres, which are important economic infrastructure distributed around the coastline. While the harbours are organisationally part of the Department, the relevant legislation requires the Department to produce separate financial statements for the transactions and activities located there. The day-to-day operations of the centres are funded through harbour dues and user charges set by law, and rents from the occupiers of State-owned properties located there. The financial statements for 2021 indicate that operational receipts of the harbours totalled €6.1 million, while operating payments were €5.5 million. In addition, significant annual capital grant funding is made available from the Exchequer, via the Vote, for the development and maintenance of harbour facilities. Capital payments in 2021 totalled €23.2 million, mainly in respect of capital projects undertaken in Castletownbere and Howth. I issued a clear audit opinion on the fishery harbour centres financial statements for 2021.
Mr. Brendan Gleeson:
I thank the Chairman for giving me the opportunity to address the committee. I am pleased to assist the committee in its examination of the Department's appropriation account for 2021. My colleagues and I look forward to discussing the expenditure and activities of the Department in 2021 with the committee.
The Department's gross estimate for 2021 was €1.8 billion. This included a carryover of capital savings of €31.6 million from 2020. In all, this represented an overall increase of €81 million over the corresponding Estimates figure for 2020. The gross outturn in 2021 was €1.69 billion. During 2021, the Department availed of a technical Supplementary Estimate, which facilitated the transfer of funds within the Vote to deal with emerging priorities. These included a Brexit-related temporary tie-up scheme for the fisheries sector and to pay part of our commitment to the World Food Programme early.
The Department also receives appropriations-in-aid, which were significant in the overall 2021 financial outcome. These principally comprise EU receipts in respect of rural development, seafood development and animal disease programmes. In 2021, these receipts amounted to €386 million.
Turning back to expenditure, 2021 was a challenging year for the Department, with the ongoing impacts of Brexit and the Covid-19 pandemic impacting on outturn. The Department's Vote is divided into four programmes, each representing a key policy priority. Programme A relates to the food safety, animal health and welfare and plant health programmes that underpin our agrifood sector. These include disease eradication programmes, such as those relating to TB, tests for residues in food products, on farm controls and plant protection. Programme expenditure under this heading, excluding staff and administration costs, amounted to €122 million in 2021. Staff costs constitute approximately 40% of the expenditure on this programme, which accounts for more than half of the Department's total 2021 payroll. This reflects the skills and expertise of our staff, who are the foundation of the food safety regime on which our agrifood sector is dependent.
Programme B covers our national funded and EU co-funded farm support schemes. The Vote does not include the basic payments scheme and associated schemes, which is entirely EU funded. These schemes are designed to encourage sustainable agricultural practices, and most of them, apart from the forestry programme, receive co-funding from the EU under the rural development programme, RDP. The final allocation for these schemes in 2021, following the Supplementary Estimate, came to €847 million. The eventual outturn for this programme was €823 million. The 2021 allocation for the results-based environmental agri pilot, REAP, for example, was €20 million, but payments totalling €10.8 million issued by year-end. A higher than expected number of participants withdrew or were rejected due to non-submission of field score claims. Part of reduced spend can be attributed to the COVID-19 restrictions, which had an impact on projects that would have been funded by targeted agricultural modernisation scheme, TAMS, and reduced spending on forestry, which we can discuss in greater detail later on.
As part of the EU recovery instrument, EURI, the Department received €189 million in funding. That is 100% funded by the EU and is programmed through the rural development programme in 2021 and 2022, with commitments and expenditure possible up to the end of 2025. EURI funding focuses on addressing the biodiversity, climate and environment challenges in the context of economic recovery from Covid-19 through green and digital investments on farm and in rural communities, including through the LEADER programme. There was an EURI allocation of €56 million in the vote for 2021. However, this required an amendment to RDP, and due to the time it took to get approval for this amendment, there was a very limited window to spend these funds in 2021.
Programme C, policy and strategy, includes expenditure on research and development, grants to State agencies, including those funded by the horse and greyhound fund, donations to the World Food Programme and funding to prime loan schemes to assist farmers and food businesses. In 2021, the Department continued to use funding under its competitive research programmes to enable Irish researchers to participate in collaborative international partnerships. In 2021, Bord Bia received an additional €4.2 million, for example, to assist with the incorporation of Brexit and Covid-19 related activities into their suite of existing programmes, market diversification and business assists for Irish food and drink businesses. Bord Bia also supported quality assured Irish produce through promotion campaigns here in the home market and in some European Union countries.
The Supplementary Estimate was availed of to transfer savings that emerged in various parts of the Vote to respond to a request from the World Food Programme for early payment of our 2022 commitment under the strategic partnership agreement 2022 to 2024. This resulted in a payment of €25 million to the World Food Programme in 2021. Overall, the programme C outturn of €402.8 million was €25.7 million less than the Vote allocation after Supplementary Estimate.
Programme D relates to the seafood sector. Total expenditure under the programme in 2021 amounted to €164 million. Savings in the capital development budget arose due to delays to on ongoing projects and to delays to the start of new projects, primarily due to the Covid-19 pandemic. The programme also includes spending under the seafood development programme and grants to the Marine Institute, Bord Iascaigh Mhara, BIM, and the Sea-Fisheries Protection Authority, SFPA. In 2021, BIM received additional funding of €11 million in the Supplementary Estimate. This funded a Brexit temporary tie-up scheme from the Brexit adjustment reserve.
The past couple of years have presented unprecedented challenges in how the Department operates. Staff in the Department have risen to these challenges and I would like to take this opportunity to thank them for their continued commitment and professionalism.
I thank the Chairman and the members for their attention and I welcome any questions.
Colm Burke (Cork North Central, Fine Gael)
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I thank Mr. Gleeson for the presentation. I will focus on expenditure on the bovine TB eradication programme. My understanding is that between 2021 and 2030, it is expected the programme will cost around €1 billion in real terms, not totally from the Department but between the contribution from farmers and the Department. This is a scheme that is in place for more than 60 years at this stage. Why are we not able to make real progress on it? What is the plan over the next five years to try to make further progress? A substantial sum is being spent each year and we are still not getting anywhere near total eradication of the problem.
Mr. Brendan Gleeson:
I thank the Deputy for the question. I have a feeling we had a conversation about this the last time I was in and it may have been with him. I was looking at some statistics for this programme going all the way back to the 1960s. There is kind of a common narrative out there that the programme has not achieved anything. However, back in the 1960s, in one year, we had 156,000 cases of bovine TB. The reality is now we have got it down to a low level. The numbers are much smaller than that – in the 20,000s. It is just more difficult now. We have a persistent low-level disease and it is very difficult to get rid of it. We need an eradication plan because we could not trade without it and we have to work with farmers to pursue that.
Colm Burke (Cork North Central, Fine Gael)
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One of the problems is that farming units have got bigger. Where previously farmers might have had 45 or 50 cows, they could now have between 200 and 500 animals. Given that we are talking about locking up an entire herd, there are huge additional costs for the people affected. Therefore, we need to see how we can progress it further because it is having a detrimental effect.
Mr. Brendan Gleeson:
That is certainly a factor in the persistence of the disease and the slight increase in recent years. We are working with farmers. One of the things we are trying to do is work more closely with these chronically infected herds, giving farmers advice and applying the appropriate controls as well.
Colm Burke (Cork North Central, Fine Gael)
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We seemed to have had a lower rate in the late 1980s and early 1990s but it has come back up again. Is there a particular reason for that?
Dr. June Fanning:
There have been a number of slight increases lately although as the Secretary General has said, our levels are very low relative to historical levels. The programme has been a success in that regard. The expansion of the dairy herd post-2015 has meant larger herds and fragmented herds and these feed into a higher risk for TB breakdown. We have specific measures that are targeting those herds. It is a very complex disease in that it is multifactorial, with a number of different risk factors. Obviously wildlife plays a role. There is also residual infection because the test is not 100% effective. It is not like the Covid PCR test-----
Colm Burke (Cork North Central, Fine Gael)
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There have been changes in that area as well. When this was raised with me I looked into it and I discovered that there is an issue in relation to genomic testing. If one does the analysis on breeding bulls, for instance, one can actually decide to take certain bulls out because the calves from those bulls can have a higher likelihood of getting TB if it enters the herd. What progress can be made, from a scientific point of view, on this?
Dr. June Fanning:
All of our measures are based on scientific evidence. As the Deputy has mentioned, there has been correlation between TB resistance in offspring and bulls. There is now a rating for both dairy and beef animals which allows people to determine the likelihood of offspring being more or less resistant to TB.
Colm Burke (Cork North Central, Fine Gael)
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Does Dr. Fanning think we can fast-track that and do a lot more work on it in order to improve the situation? We have been talking about TB for 60 years at this stage. If one takes brucellosis, for example, we seem to have been able to deal with it far more effectively. It was a huge challenge for the Department and the veterinary profession but it was dealt with effectively. We do not seem to have the same ongoing problem with brucellosis that we have with TB.
Dr. June Fanning:
As I have said, the issue is the fact that it is a more complex disease and it involves a wildlife element. In 1974, TB was detected in badgers and while their role at that stage was not fully understood, there has been a lot of research since. Badgers have been shown to be important as maintenance hosts and also in the transmission badger to badger, and also badger to cattle. We now have a badger TB programme as well. In 2019 there was a large scale roll-out of the vaccine in badgers. We have gone from fewer than 2,000 badgers vaccinated to over 7,000 last year and we are about 1,000 ahead of where we were this time last year with badger vaccination. Where TB breakdowns have been associated with wildlife, we obviously have to address that as well and that complicates things. The brucellosis situation was different because there was not a wildlife species involved as well.
Colm Burke (Cork North Central, Fine Gael)
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In terms of planning, we had fires in the Killarney lakes area. As a result, deer travelled east and then there was a huge increase in TB in that stretch from Killarney to Macroom. What action did the Department take once that issue was identified? What did the Department do to try to control that?
Colm Burke (Cork North Central, Fine Gael)
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There is clear evidence in this stretch from Killarney, through Millstreet, to Macroom. There has been a huge increase as a result of more deer coming into that area. The view is that the deer moved because of the damage done by fires around the Killarney lakes area. What action did the Department take to deal with that issue? We now have a whole lot of farms locked up as a result of it.
Dr. June Fanning:
Whether the deer were directly responsible in that area is not clear. Each of those outbreaks will have been investigated by one of our veterinary inspectors. On the wider point about deer, the over-population of deer causes a lot of problems, apart from the TB issue. Our evidence has shown that in Wicklow the TB prevalence in deer is about 16% but it is much lower, at around 2%, in deer elsewhere in the country. The over-population and the increase in deer numbers leads to a problem whereby they become a spillover host. They can become infected because there are so many deer.
The other major problem with deer relates to biodiversity loss and forestry loss. The Minister has set up, in conjunction with the National Parks and Wildlife Service, NPWS, a deer management strategy group. A public consultation was opened from December to February and over 1,500 submissions were received from a number of different stakeholders. A meeting was held last week between the deer management strategy group and key stakeholders to discuss what can be done to develop a sustainable deer management plan.
Colm Burke (Cork North Central, Fine Gael)
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I want to go back to the TB issue and the progress that can be made over the next decade. Almost €1 billion will be spent between 2021 and 2030. What can we do to make better progress? Is there a clear plan set out by the Department to improve testing and address the issue of genomics and other relevant issues? On the basis of the scientific evidence that is now there, what is the Department proposing to do to reduce expenditure in this area?
Dr. June Fanning:
The Department is working very closely with stakeholders. We set up the TB forum and we developed a TB strategy for 2021 to 2030. One of the previous findings was that stakeholders were not as involved as they needed to be. A lot of difficult decisions need to be made if we are to eradicate this disease, so we need to bring the stakeholders with us.
Colm Burke (Cork North Central, Fine Gael)
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Let us say the Department is back here in four years. Does Dr. Fanning believe we will have made progress on this issue? Will we have reduced the number of farms that have to be locked up on a year-to-year basis? Does Dr. Fanning honestly believe that we will have made progress on that in a four- or five-year period?
Dr. June Fanning:
Yes, I do. We have the right structure now in the TB forum, with the scientific working group, the implementation working group and the financial working group. Great strides have been made. The African proverb, "If you want to go fast, go alone; if you want to go far, go together", is relevant. We have that structure now, to enable us to go with the stakeholders.
Colm Burke (Cork North Central, Fine Gael)
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I want to move on to forestry and the difficulties we have had in the sector. In 2021, for example, less than half of the target area was planted. What changes have we made in this area? We have significant targets to reach. What can we do to deal with the issues? There were large numbers of objections, right across the board, to applications for planting, felling licences, road-opening licences and so on. Where are we with that now?
Mr. Brendan Gleeson:
These difficulties have been well ventilated in other forums. In 2018 we had a court case, the result of which was that we had to move from putting 3% of applications through appropriate assessment for environmental reasons to 80%. The reality is that the Department just was not set up to do that. Since then, we have greatly increased the resources in that area. We have taken on, at various times, up to 37 ecologists to go through those applications and to do the appropriate assessments.
Separately, we had a system of appeals which became logjammed because, for a period, every single Coillte licence was being appealed. We have revised our appeals system and that appeals backlog is now gone.
The Minister established Project Woodland to work with the sector and to work through all of these issues, and quite a number of things were done in that context. The principal thing is that we recognised there are competing land uses in forestry and that we would have to provide very generous incentives to people to engage in forestry and to ensure we had a licensing system that was functional.
Colm Burke (Cork North Central, Fine Gael)
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In relation to the targets set for planting, does Mr. Gleeson believe that, over the next five years, we can achieve those targets in view of the delays that have occurred over the last five years? We have a lot of catching up to do.
Mr. Brendan Gleeson:
I do, but the proof of the pudding will be in the eating, that is, when we launch the new programme and we make the funding available to people. We have increased premia by between 40% and 60% in the context of the new programme, and we are awaiting state aid approval for that. I think that what we have now is a very generous incentive to people.
Colm Burke (Cork North Central, Fine Gael)
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One of the things that has arisen and that has landed in my office is the situation where someone has received a felling licence but they cannot get a road opening licence, and even though they have a right of way to the land, they are being refused the road opening licence. They invested in this 20 to 25 years ago - it was a pension fund - but they now find they are landlocked. There has been a change in policy in quite a number of areas and as a result, because of the uncertainty created, people are moving away from investing in this area. How can the Department set out a policy now that it knows will be implemented in 20 years' time? This is exactly what has happened in this case. Something that was in place 25 years ago has now been totally changed.
Mr. Brendan Gleeson:
I do not know the specifics of the case the Deputy is talking about. At the moment, we have no backlog in felling licences and I do not believe we have a backlog in roads licences, so we are issuing those. We have to provide certainty to people when they apply for a licence that within a defined period, they will have a licence.
Colm Burke (Cork North Central, Fine Gael)
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They are saying the environmental issues have changed. They have been told that where the road would go in is too close to a stream, but that was not identified 25 years ago when they got the planting licence. What I am saying to Mr. Gleeson is that all of these need to be flagged up if people are investing money. They are now in a situation where they are landlocked as a result, and they get one licence but cannot get the other. This is not the only one I have come across.
Mr. Brendan Gleeson:
I would be a brave man if I said I knew exactly what the regulatory regime will be in 25 or 30 years. What I can say is that there is an evolution in environmental policy, that the courts have made a determination as to what is required, that we are doing what is required in the context of European Union and national law and that we are providing a framework of incentives which is very generous to incentivise people to do this. I think it is-----
Colm Burke (Cork North Central, Fine Gael)
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To go back to the planting issue, in 2021, we only achieved half of the target. To take 2023 and 2024, will the targets set for those years be achieved right across the board, from the felling of timber to planting and the opening up of new investment?
Mr. Brendan Gleeson:
To take the problems we had in 2021 and 2020, we had this appeals problem, and that is fixed; we had a huge backlog in licensing, and that is dealt with to a significant extent; we had process issues and resource issues within the Department, and we have dealt with those; and we had an incentive system which was on the cusp of change. It is often the case that when you are about to enter into a new programme, people will press the pause button because they are waiting for something better to come along. Once we get the state aid approval, we will have that in place. I believe we will have a very much more successful forestry programme once we get these new incentives in place.
Colm Burke (Cork North Central, Fine Gael)
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Will the targets be reached?
Colm Burke (Cork North Central, Fine Gael)
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Is that this year or next year?
Colm Burke (Cork North Central, Fine Gael)
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Will we achieve it in 2024 or 2025?
Mr. Brendan Gleeson:
I believe we will have a very much increased level of afforestation in 2024 and 2025. It is not for me to resile from Government targets. We will be putting a very generous set of incentives in place and I believe they will be sufficient to significantly increase the level of planting.
On harvesting and roads, one of the things that affects harvesting is the price of timber globally, so, again, it is a multifactorial issue. What I can say is that the licensing system in the Department will not be a barrier to harvesting. There is plenty of timber in sawmills now and we have resolved the licensing issues on that. However, the demand for timber and the demand for harvesting are multifactorial things. The price of timber has dropped this year, for example.
Cormac Devlin (Dún Laoghaire, Fianna Fail)
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I welcome Mr. Gleeson and his officials. The nature and large presence of the officials present shows the breadth of the Department. They are very welcome and it is good to engage with them again.
To stay with the forestry issue, since its introduction, what kind of impact has the Forestry (Miscellaneous Provisions) Act 2020 had on licensing applications within the Department?
Mr. Colm Hayes:
The Forestry (Miscellaneous Provisions) Act 2020 was to better regulate and improve the appeals system. As the Secretary General said, we had the bones of 1,000 appeals on hand coming into 2021. The appeals committee is independent of the Department but it was recognised that it was not functioning as it should and some changes were made in the Act, for example, to provide for sub-committees of the main appeals committee. A fee was also introduced, which really just brought the appeals system in line with the planning system in terms of the cost associated with submitting an appeal. That has been very effective. The Forestry Appeals Committee has on hand maybe between 20 and 30 appeals on forestry licences, which is down from somewhere close to 1,000 in 2021.
Cormac Devlin (Dún Laoghaire, Fianna Fail)
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Is there an average timeframe for dealing with an appeal?
Mr. Colm Hayes:
From memory, coming into 2021, that timeline would have been a lot longer because the backlog had developed. Now, generally speaking, because the appeals committee has a consistent level of between 20 and 40 appeals, I think it deals with them in a fairly timely manner. It really comes down to the detail of the appeal because some can be appealed on very specific grounds, which can require very specific expertise to advise the committee. However, as I said, the committee is independent of the Department, and that is the right and proper way it should be.
I will get the timelines. I suspect that, on foot of the introduction of the legislation, the introduction of the fee and, as I said, a more efficient working system within the appeals committee, it is all around a much improved system, both for the appellants and the applicants, in that there is a bit more certainty around it. I suspect the exact timeline is somewhere between three months and five months, but I will get that for the Deputy.
Cormac Devlin (Dún Laoghaire, Fianna Fail)
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That would be great. Mr. Hayes mentioned the independence of those appeals officers, rightly so. How are they chosen?
Mr. Colm Hayes:
There is a particular skill set that we identified as necessary for the efficient conduct of a forestry appeal. It requires expertise in understanding environmental law, expertise in forestry and silvicultural matters and also some expertise in the planning system to understand the wider implications. An appeals committee is generally three individuals. There will almost always be a silvicultural expert, a planning expert and an environmental expert. As I said, they are not bound by their membership if a very specific issue arises, and from time to time they have called in ornithologists, plant botanists and so on. They are not bound by their own expertise in terms of who they bring in.
Cormac Devlin (Dún Laoghaire, Fianna Fail)
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How are they actually selected?
Cormac Devlin (Dún Laoghaire, Fianna Fail)
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By the Department.
Cormac Devlin (Dún Laoghaire, Fianna Fail)
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The members are independent of the Department.
Cormac Devlin (Dún Laoghaire, Fianna Fail)
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Once they are chosen and selected, they are independent.
Mr. Colm Hayes:
They are appointed by the Minister. Their functions are completely independent. They have no reporting obligations to the Department other than that the Forestry (Miscellaneous Provisions) Act 2020 obliges them to produce an annual report, although that is for public dissemination as much as it is for submission to the Minister.
Cormac Devlin (Dún Laoghaire, Fianna Fail)
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I thank Mr. Hayes. To move on, in terms of the emissions targets, obviously, that has put a different focus on the Department and its targets. Is it set to meet its targets by 2025?
Mr. Brendan Gleeson:
They are extraordinarily ambitious. We have a variety of tools to do that and we are trying to work through some other issues. We have a CAP strategic plan which can deliver 1.3 megatonnes of abatement by 2030 but it is not going to deliver it all. We have a combination of that. We have a combination of regulations through the nitrates directive, for example, which will help to reduce emissions.
We are introducing regulations to reduce the use of nitrogen. We have targets to be determined in respect of land use. Afforestation is an important part of that, as is reduced intensity management of farmland. We are putting actions in place to achieve those targets. The Minister established two committees under the Food Vision process for the dairy and beef scheme. The committees came up with a list of recommendations and we are working our way through the recommendations and trying to implement them. The target for 2025 is extraordinarily ambitious and we are two years away from it but the important thing is to build momentum and get on the road.
Cormac Devlin (Dún Laoghaire, Fianna Fail)
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Very good. I will focus on a number of the programme headings. In the context of programme A, Mr. Gleeson referred to food safety and animal health and welfare. An interdepartmental committee to consider the control of dogs was established and there are recommendations coming down the tracks in that regard. Does that fall under programme A?
Cormac Devlin (Dún Laoghaire, Fianna Fail)
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Not yet.
Mr. Brendan Gleeson:
-----on the committee at this point. A criticism of the control of dogs through the years is that it is between several posts. It is a reasonable point. The key thing about the establishment of the committee, which includes our Department, the Department of Rural and Community Development, An Garda Síochána and local authorities, is that it coheres all those efforts and has come up with a strategy for controlling. I may ask Ms Fanning to say a little more on this issue. The most important part of it is encouraging responsible dog ownership. I have seen horrifying reports of attacks on sheep, for example. In very few, if any, of those cases was a dog found. One can do all one likes about control, increasing penalties and identification-----
Cormac Devlin (Dún Laoghaire, Fianna Fail)
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It is the responsibility of the owner.
Mr. Brendan Gleeson:
-----but if the dog is not there, it does not help. We need to create a culture of responsible dog ownership and overlayer that with the control elements, including bigger fines for dogs being out of control and better identification systems. There is now a specific plan and timeline in that regard. Ms Fanning is more qualified to-----
Cormac Devlin (Dún Laoghaire, Fianna Fail)
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I presume the Department will seek to increase its anticipated expenditure under this heading. Additional penalties, observation, control or monitoring of situations - Mr. Gleeson mentioned local authorities, for example - will involve expenditure. I presume that will be considered.
Mr. Brendan Gleeson:
I do not expect a significant increase in the Department's Vote. There are various agencies involved in this respect. It is not for me to make commitments on behalf of other Departments or Ministers but one of the recommendations of the group was the recruitment of additional dog wardens for control purposes. There were 58 of them, approximately. That does not fall to be met by our Department, however, and I do not wish to suggest it is a done deal.
Cormac Devlin (Dún Laoghaire, Fianna Fail)
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Mr. Gleeson has enough on his plate.
Cormac Devlin (Dún Laoghaire, Fianna Fail)
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I am limited on time. My apologies. We might come back to the issue if we have time.
With regard to programme C and the World Food Programme, WFP, in his opening statement Mr. Gleeson made the point that there were additional moneys. The programme asked for an advance earlier in 2022. I ask him to outline the contribution of the State in that regard. It has increased year on year.
Mr. Brendan Gleeson:
This is part of the State's overseas development aid, ODA, contribution. We have obligations in that regard. Our association with the WFP is close and has been so for a long time. We are the Department with responsibility for food, not just for agriculture. It is important to us. We have a three-year contract or agreement with the WFP. We give it untied funds that it can use freely in the poorest regions. It reports to us afterwards on what it uses the funding for. We also fund a number of specific programmes. The current term of the agreement is that we will provide €75 million over three years. I have seen the report from the committee on the way we do this. The reality is that it is not arbitrary. We make these contributions on the basis of a plan. The planned contribution of €25 million was in 2022 but in 2021 we had savings and the WFP asked us for funding, so we made the funding available to it. When this three-year programme finishes, there will be a new programme. We will have an annual plan programmed into the Estimates but I cannot say the WFP will not come to us in 2023 or 2024 seeking the contribution of €25 million early. If we have the funding available, we might make it available to the WFP. I know it is an issue that has exercised the committee a bit.
Cormac Devlin (Dún Laoghaire, Fianna Fail)
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Full marks to the Department on its engagement with the programme. Obviously, it is an essential programme across the globe and we need to play our part in it.
Brian Stanley (Laois-Offaly, Sinn Fein)
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I ask the Deputy to be brief. There will be a second round of questions.
Cormac Devlin (Dún Laoghaire, Fianna Fail)
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The briefing notes state that €161 million was invested in capital works in six fisheries harbours from 2010 through to 2021. I ask Mr. Gleeson to comment on that.
The asset management unit should be highlighted. It is dealt with in the briefing note. It was formed in January 2017 and completed its work in 2021. There were issues in respect of an asset register. I pay tribute to all involved in that because it was a big issue in its day but is now complete, as is highlighted in the note. Well done in that regard.
Mr. Brendan Gleeson:
We have six fisheries harbours. They were vested in the Minister through the Fishery Harbour Centres Act. The proposition was that the State should invest in harbours for the development of the fisheries sector. If I am not mistaken, 80% of fish landed in Ireland are landed through those six fisheries harbours. The investment programme was based on a strategic plan. It was not arbitrary. It provides for things like additional landing space, dredging and all the things that are relevant in the context of allowing vessels to land and process their catch in an efficient way. Ms Hawe may wish to add to that.
Ms Roni Hawe:
Programme D does not just cover the six fishery harbour centres. Of the expenditure in 2021, more than €20 million was invested in the strategic development of those harbours. As Mr. Gleeson stated, there were a couple of projects relating to additional quayside space. There are larger trawlers coming in to land now. We are trying to attract additional landings not just from the Irish fleet but also from the fleets of other member states and elsewhere to attract more raw material for the processing sector and to drive the downstream and ancillary jobs in those coastal locations. More than 80% of fish landings in the country are coming in through those six front doors. They are doing a very effective job at what they were set up to do.
Cormac Devlin (Dún Laoghaire, Fianna Fail)
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I thank the witnesses.
Verona Murphy (Wexford, Independent)
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I thank the witnesses for coming in. I have so many questions, I could probably use up all the time by myself. I will have to leave the meeting at 10.30 a.m. but I will return. Who sets targets for the forestry programme?
Verona Murphy (Wexford, Independent)
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Is that based on advice from the Department?
Verona Murphy (Wexford, Independent)
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Is it primarily based on the advice of the Department? I mean no disrespect to Ministers but I am sure that, primarily, most of them do not have a clue about forestry. They get appointed to a ministry and fit into the role. Who is responsible for setting the targets?
Mr. Brendan Gleeson:
The targets are set by the Government. They are based on the advice of the Department. The Department develops them in consultation with stakeholders. It does not do so in a vacuum. It is clear that we have not met those targets in recent years, for reasons we have already discussed. It would be a mistake to resile from them, however, because we need to have that ambition.
Verona Murphy (Wexford, Independent)
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What happens in terms of monetary fines if the targets are not met? Are there such fines?
Verona Murphy (Wexford, Independent)
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They are nothing to do with EU targets.
Verona Murphy (Wexford, Independent)
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In the event that the targets are not met, there is a significant shortfall in carbon emission reductions. Is that correct?
Mr. Brendan Gleeson:
There are two functions forestry can play in the context of carbon emissions. One is that in the context of our agriculture target, it is an alternative to the use of land for livestock. It can have a displacement effect on livestock numbers and could serve to reduce emissions in that context.
Verona Murphy (Wexford, Independent)
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I am looking for answers in plain English. Is Mr. Gleeson saying that if we do not meet forestry targets, the cattle herd will take up the slack and those numbers will be further reduced to compensate for not meeting-----
Verona Murphy (Wexford, Independent)
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When you say there is a requirement, to whom-----
Verona Murphy (Wexford, Independent)
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Okay.
Mr. Brendan Gleeson:
Okay. Forestry plays a role in that because it provides a potential alternative income for livestock farmers. That is the first thing. The second thing is that we have emissions from land use. Our net emissions from land use in 2018 were about 4.8 megatonnes. We have not set a target for reducing emissions from land use yet because it is complicated and the science is evolving and changing. Forestry is one of the measures that can be used to reduce emissions from land use. It is true to say that if we do not succeed in meeting our forestry targets, it will have an impact on our ability to meet our land use emissions reduction targets when they emerge.
Verona Murphy (Wexford, Independent)
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How is carbon sequestering measured?
Verona Murphy (Wexford, Independent)
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I ask him to be as brief as he can.
Mr. Bill Callanan:
Emissions from animals, etc. are measured by equipment and various standards are used. It is very technical. On the land side, there is a paucity of knowledge and information as to what is happening regarding emissions in our soils. We have initiated an extensive research programme to answer that question.
For forestry, it is based around modelling on how much carbon trees take in and how much they store. I do not have the exact data on it but it is basically a factor of the pace of growth, the amount of carbon that is locked up in the trees as a consequence and the size and volumetric production of forestry. All of those elements translate into a number that relates to what is translated into the inventory. There are three levels of inventory, generally. Level 1 consists of broad international factors that are used, and then increasingly, as our local knowledge grows, we can increase our tier standard. In other words, using local factors for what we know through research funding establishes an appropriate inventory factor that is scientifically justified. The EPA is then responsible for the computation and calculation of the overall contribution.
Verona Murphy (Wexford, Independent)
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How is it measured in value in monetary value?
Mr. Bill Callanan:
I am not sure. I would like to point out one thing regarding that question. Carbon is valued by a number of standards, one is which is its emissions trading scheme, ETS, value, which is carbon for compliance. That is currently up to €100 per tonne and that creates a value market to encourage actions to reduce carbon emissions. However, forestry is not within that structure.
Verona Murphy (Wexford, Independent)
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Let us just say all sequestration, not just forestry. There are many ways to sequester carbon besides forestry. What do we have the biggest yield of sequestering from currently?
Verona Murphy (Wexford, Independent)
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Is there any offset in relation to peat soils and what we are sequestering and then the importation of wood chip from Brazil in vast quantities? Is there any offset? Does anybody take into consideration where we stop one line - for instance in peat, never mind the wood chip? When we are importing peat to replace what we have stopped harvesting, is there a correlation within the Department as to what footprint is garnered by importing it versus harvesting it locally?
Verona Murphy (Wexford, Independent)
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Are we winning in that regard? Would it be beneficial to us? Would we be seeing benefits by virtue of importing peat now and not harvesting our own? Is there a benefit for the country?
Verona Murphy (Wexford, Independent)
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I am just talking about peat.
Mr. Bill Callanan:
Our wetlands are currently a net emitter of approximately 2 megatonnes. That level is lower than it is with agricultural land use. Anything we do to reverse that, such as Ireland's national commitments under the climate Act to rehabilitate 33,000 ha of Bord na Móna land, is positive for that balance sheet.
Verona Murphy (Wexford, Independent)
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To go back to sequestration, who gets the benefit of the carbon sequestered by the farmer?
Verona Murphy (Wexford, Independent)
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We know there is a court case going on as to who owns the carbon. Leaving that to one side, who currently gets the benefit financially?
Mr. Bill Callanan:
There is no financial benefit accruing to the State but there is a requirement on the State from an inventory point of view to report fully on all emissions, including forestry and peat soils. That is an overall State requirement but identifying a financial benefit from it is difficult, or it is not available to create a financial benefit out of it.
Verona Murphy (Wexford, Independent)
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In that case, what is it used for?
Verona Murphy (Wexford, Independent)
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Then there has to be a benefit. If we are producing NOx emissions over and above what the EPA determines to be allowable under the EU rules, at Dublin Port for instance, we pay a massive fine for exceeding them. There has to be a monetary value on sequestering carbon to somebody. I am seeking to determine who is getting that monetary value.
Mr. Brendan Gleeson:
I am not an expert but I will try to explain as best I can. We pay for activities that help to reduce the emissions from land use and one of those activities is forestry. Another is reducing the intensification of management of grassland and some rewetting. We pay people to do those things. The benefit of the emissions reduction from that has to be countable in the national inventory. Otherwise there is no benefit to the State and we would not do it. It has to be countable in the national inventory. That is how it works right now. Separately, there is an effort under way at present to build some kind of a carbon farming model at European Union level. This model would provide a framework to enable farmers or landowners, for example, to benefit in some financial way from the reduction of emissions at farm level. It is currently at an embryonic stage. It is difficult because a certification system and a framework for consistent measurement right across the European Union needs to be created. The intention at European Union level is to have the framework in place for 2030. Now we are not quite-----
Verona Murphy (Wexford, Independent)
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I would not even waste my last 30 seconds on that.
Verona Murphy (Wexford, Independent)
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I am sure you are not.
Verona Murphy (Wexford, Independent)
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I have one other question before I go. Is it a question of being short-staffed?
Verona Murphy (Wexford, Independent)
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Is there a lack of staff in certain Departments? Is there somewhere that sticks out? I have an appeal in since September 2022 for an oral hearing and eight months later we still have not been given a date.
Verona Murphy (Wexford, Independent)
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Does that sound like an outrageous length of time to wait?
Verona Murphy (Wexford, Independent)
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I have let you know.
Verona Murphy (Wexford, Independent)
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I checked yesterday whether I sent it to An Bord Pleanála or the Department of Agriculture, Food and the Marine. I am not sure if the delays would be any different.
Verona Murphy (Wexford, Independent)
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Please check that for me. Mr. Gleeson has the information and it has been a long time. It involves a young farmer.
Verona Murphy (Wexford, Independent)
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He is a very young farmer and he is depending on the payment. We need that appeal to proceed. I will come back in.
Brian Stanley (Laois-Offaly, Sinn Fein)
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Thanks, Deputy. We will get you back in later on.
Alan Kelly (Tipperary, Labour)
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I thank the officials for attending today. I had some questions on forestry but I think they have been dealt with exhaustively. I share some of the concerns of previous speakers. I have been chasing various different licences on behalf of constituents for so long it is just insane. I believe there is a process issue and a staffing issue, to be honest. This should not be going on as long as it has been. There is a process issue somewhere here. If Mr. Gleeson says that there are enough staff, there has to be a process issue.
Alan Kelly (Tipperary, Labour)
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I am glad to hear Mr. Gleeson say that.
Mr. Brendan Gleeson:
Of course it is not but there were reasons for what happened. We have dramatically increased the number of staff available. If I have to do it again, I will.
We have done it through a combination of permanent staff and contract staff. For example, we have taken on a lot of contract ecologists to try to speed up the processing of the applications. We have also done a full process review, which is ongoing. We are making improvements to the process all the time, including our IT systems. However, it is never going to be a flick-a-switch process to issue a forestry licence because in 80% of cases, we have to complete a full environmental appropriate assessment, and that is a complex process. We have to go through two periods of consultation of 30 days in the middle of the process. I think-----
Alan Kelly (Tipperary, Labour)
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Is there any way that can be shortened? I have heard of the timelines, but if this needs to go up to come back down to be shortened, surely, collectively we can do that. It seems ridiculous.
Alan Kelly (Tipperary, Labour)
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We are here to change the law if it needs changing.
Alan Kelly (Tipperary, Labour)
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It would be a good idea if, as an Oireachtas, we looked it again. That is all I am suggesting.
Brian Stanley (Laois-Offaly, Sinn Fein)
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We have representatives here from the Department of the Environment, Climate and Communications. Perhaps the Deputy wants to put the question to them.
Alan Kelly (Tipperary, Labour)
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I will let Mr. Gleeson finish first.
Mr. Brendan Gleeson:
I will make one quick point. First of all, this is a contested sector, and people have different views about forestry. Some people want us to plant trees, and some people do not. Some people want a commercial sector, and some people do not. Everybody has a legitimate interest in this, and a legitimate perspective. There were all kinds of suggestions flying around about what we could and could not do, including whether we could drop the licensing requirement for roads or the licensing requirement for harvesting. After all, it seems ludicrous that we would allow people to plant the trees and then require a licence for harvesting. In principle, perhaps that does seem ludicrous, but it is not permissible under the law. The environmental conditions might have changed in the meantime, 30 years on. One of the things we did was to get an independent regulatory review done to identify what was possible and what was not possible. That came up with a series of recommendations, and we have an action plan to work through them and try to deal with them. Some of them might simplify some of this process, but it is complex legal stuff. What got us into the position that we are in now was a court judgment in 2018 that said we were non-compliant. We operated in good faith, and as far as we were concerned we were doing the right thing. When an application came in, we judged the need for an appropriate assessment against taking the mitigating actions in the application into account. In other words, we knew about appropriate assessment, but if the application provided for mitigating actions to mitigate the environmental risk, we took that into account when we screened it for appropriate assessment. However, the court judgment held that the mitigating actions cannot be taken into account. I do not want to plunge into some system now that will see us ending up in court in five years' time, and having a client base which is plunged into uncertainty again. I want to be absolutely certain and clear with people that we need to have a regulatory framework that is robust and will stand up to scrutiny and judicial review. I can tell the committee that it will be contested.
Alan Kelly (Tipperary, Labour)
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I am with Mr. Gleeson on that. The Department has to make sure it is going to be robust enough to achieve that. Is there anything the officials from the Department of the Environment, Climate and Communications want to add?
Alan Kelly (Tipperary, Labour)
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I was thinking that. I have a few quick questions. I have a clarifying question from a marine point of view. I know it is not the Department's jurisdiction, but I am a huge believer in the idea that we have to move at an exponential rate in relation to offshore wind. I think that if we do not, it is madness. It is our biggest resource. It is incredibly stupid that we have not gone further than we have to date. The Maritime Area Regulatory Authority, MARA, has been established. I know that it is not under the jurisdiction of the Department of the Environment, Climate and Communications; it is under the jurisdiction of the Department of Housing, Local Government and Heritage. The process of setting up MARA has taken too long. The CEO has not been appointed. It was all meant to be set up by the first quarter of this year in order to be taking applications by the second or third quarter. I expect that this is not going to happen. What is the Department's relationship, given the marine side of it, with MARA? I take a huge interest in the ports. I take a huge interest in where we are going with Shannon Foynes Port. It is one of the greatest assets we have in this country. It is the second deep-water port in Europe. I also have an interest in where we are going with floating offshore wind and the targets we have to achieve. As regards the infrastructure at port level, whose responsibility is that?
Alan Kelly (Tipperary, Labour)
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There is a cross-over here between the Department of Agriculture, Food and the Marine; the Department of Transport; the Department of the Environment, Climate and Communications; and probably the Department of Housing, Local Government and Heritage.
Alan Kelly (Tipperary, Labour)
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That is what I am asking, because there is an overlap.
Alan Kelly (Tipperary, Labour)
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Okay. Let us get this right. I am glad Mr. Gleeson is clarifying this. I know there are officials from the other Departments here. There is an interdepartmental committee that has been set up through the Department of Transport. Offshore wind comes under the Department of the Environment, Climate and Communications. There is a licensing process that is overseen by the Department of Housing, Local Government and Heritage. The infrastructure for the harbours, which is absolutely endemic and necessary, is the responsibility of the Department of Transport. There could be an overlap with the Department of Agriculture, Food and the Marine in some cases. Is that accurate?
Alan Kelly (Tipperary, Labour)
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To me, that will cause unknown timeline problems.
Alan Kelly (Tipperary, Labour)
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I understand that, but here could be overlap in some areas of responsibility.
Ms Roni Hawe:
It has been set up centrally and is being led overall by the Department of the Environment, Climate and Communications. Our colleagues are here and they might comment on that aspect of it. There are a number of workstreams in that task force. It is a cross-departmental task force. One of the workstreams is looking at ports and ports' readiness and capacity to support offshore wind.
Alan Kelly (Tipperary, Labour)
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They are starting from scratch.
Alan Kelly (Tipperary, Labour)
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I saw that.
Ms Roni Hawe:
We do not know, right now, the extent to which twill hey be required to support offshore renewable energy projects for a variety of reasons. The Irish Maritime Development Office, IMDO, is currently undertaking a ports capacity study and assessment. It is due to report on that soon, as we understand it. That study is looking at the overall network of port assets, and what will be needed to help to deliver the offshore wind targets. Obviously, there is-----
Alan Kelly (Tipperary, Labour)
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What are the timelines for that?
Alan Kelly (Tipperary, Labour)
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What is the timeline for the IMDO to do its assessment?
Alan Kelly (Tipperary, Labour)
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I know that, but does the IMDO not have to produce a report on the implementation?
Alan Kelly (Tipperary, Labour)
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When is it going to report?
Alan Kelly (Tipperary, Labour)
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I am not sure if anyone else wants to add to that. I have three final questions that I will throw out.
Brian Stanley (Laois-Offaly, Sinn Fein)
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There will be a second round, Deputy.
Alan Kelly (Tipperary, Labour)
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First, where are we with protected destinations of origin, PDOs, and protected geographical indications, PGIs, as regards food? I raised the issue a long time ago when I was a Member of the European Parliament. We were way behind other European countries on that. The witnesses might give us an update on that.
Second, what is being done, and how much communication is there with Greyhound Racing Ireland, GRI, or the greyhound board as I know it, in relation to welfare?
Finally, where are we at as regards the disclosure of the salary of the CEO of the Irish Horseracing Regulatory Board, IHRB, and the process by which transparency as regards salaries in the organisation is ensured? Those are my three quick questions.
Brian Stanley (Laois-Offaly, Sinn Fein)
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Briefly.
Alan Kelly (Tipperary, Labour)
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The first question is on PDOs and PGIs. Where are we at, how many have we and how does that compare with other countries?
Alan Kelly (Tipperary, Labour)
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That would be a great achievement.
Mr. Brendan Gleeson:
I think it would be. One of the complications was that Northern Ireland expressed an interest in being included. Now that it is no longer an EU member state, things have been complicated further. It is a legitimate expectation from them. I think we are well advanced now. I would expect that process to conclude in the next few months. I am reasonably confident of that.
On the greyhound issue, there is a requirement at the moment that at least 10% of the GRI grant goes on welfare.
Alan Kelly (Tipperary, Labour)
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Should that be increased?
Mr. Brendan Gleeson:
Perhaps, but it has a limited fund and things to do with it. It also uses a proportion of its sponsorship money and private income on welfare. Every time we have a governance meeting with GRI - such meetings take place a couple of times a year - we raise welfare issues.
They are putting a lot of effort into welfare initiatives. Again, it is one of these contested sectors. This is difficult and the sector is coming from a background where it had great difficulties a few years ago. We all know that. They are taking it seriously.
On the question of the IHRB CEO, as I understand it, that was done in September 2021. I certainly did not know anything about it. It was brought to my attention. The defence from IHRB is essentially that this top-up in the pension fund did not involve public money but its own resources, but it is all a bit circular.
Alan Kelly (Tipperary, Labour)
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That is the big debate. It all goes into the one pot and the taxpayer is paying for it-----
Alan Kelly (Tipperary, Labour)
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-----as the Comptroller and Auditor General pointed out previously.
Alan Kelly (Tipperary, Labour)
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It reminds me of some of the universities that get funding from us and then state they raised other funding, through setting up companies and doing commercial work, which they do not have to include, but they do.
Mr. Brendan Gleeson:
I do not want to comment on the university situation, but I think if a body gets most of its funds from the public sector, it is a bit of a circular argument. I absolutely accept that. We have asked HRI to look at the legal situation around this and to consider what can be done about it from a legal perspective. We are also going to review our governance arrangements. I know the Chairman is very concerned about this. We have to have a look at it. We do not want to impede the independence of the IHRB because it is specifically established to independently make and apply the rules of racing. Our intrusion into its affairs has to be limited but in the context of those broader issues, such as the pension and pay arrangements, maybe that is something we should look at. We have not done so in the past.
Alan Dillon (Mayo, Fine Gael)
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I welcome the witnesses. I will raise the matter of the Department's receipt of substantial funding from the EU on an annual basis. In 2021, the Department recorded that it managed more than €1.5 billion in EU supports across the various sectors for which it is responsible. Programme B, farm sector support and controls, states "a charge to the Vote ... for EU Funding which has been disallowed due to conformity clearance decisions and ... late payments." Will the Accounting Officer explain why €5.7 million of EU funding was disallowed?
Alan Dillon (Mayo, Fine Gael)
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That is correct.
Mr. Brendan Gleeson:
Apart from being an Accounting Officer, I am head of the paying agency at EU level. We get funding directly from the EU of €1.2 billion a year that goes into direct payments. We have our account audited by an independent auditor and we are accountable to the EU for that expenditure. There was a time we had a composite account that helped to fold that independently. This is not funding voted by the Oireachtas so it does not come before this House for approval, but there was a time when we had a composite account that showed how it was spent. A couple of years ago, and the Comptroller and Auditor General did a very good report on it, we concluded we would deal with it by way of a note. These funds are audited every year.
Alan Dillon (Mayo, Fine Gael)
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I am specifically talking about the €5.7 million that was disallowed relating to a fund under programme B for farm sector support.
Mr. Brendan Gleeson:
I hope I get this right but I will confirm it. I think that was an entitlements audit. We had a young farmer scheme that involved the payment of additional payments that were a top-up to the basic payment for young farmers. That is funded by a cut in everybody else's payment in the national reserve. When we were managing that fund, we applied an upper limit to the number of hectares - I think it was 90 ha - that we would cover in this payment. We thought that was a sensible thing to do. We were doing a linear cut on everybody else and providing this bonus for young farmers, but we wanted to distribute it on a rational basis so we applied an upper limit. I will come back to the Deputy on this, but I think in that particular instance the Commission stated we had no legal basis for applying that upper limit. That was the basis for that particular disallowance.
We spend €1.3 billion a year overall. I would say there is a disallowance every year. I am not in any way complacent about that but we-----
Alan Dillon (Mayo, Fine Gael)
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Has the issue been rectified?
Alan Dillon (Mayo, Fine Gael)
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Are there any similar disallowances of EU funding in 2022?
Mr. Brendan Gleeson:
In 2022, I am certain that there are. I am certain there will be contingent liabilities because there are every year. In the context of the EU, however, we traditionally had an objective to be in the bottom quartile of disallowances across the EU. I am certain we meet that objective. I would say we are well below it. The last time I looked at this, I think we were the second lowest in the EU in terms of disallowances. That is not an indication of complacency.
Alan Dillon (Mayo, Fine Gael)
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On the Department's key performance indicators, how does it manage the EU fund within its divisions? Is there a certain standard?
Mr. Brendan Gleeson:
We are an accredited paying agency. Accredited means we had to pass tests and meet standards. Every division has a set of written procedures. We have an internal audit unit that audits this stuff on a regular basis. We report to the Commission and we have this external audit body that looks at us. We have an accreditation review group. I periodically chair a group that makes sure we follow up on audit findings from the EU. In a systematic way, once a quarter, we go through every audit finding we have and make sure every division is following up on those audit findings. We have a very robust governance structure. I would be a foolish man if I said we will have no disallowances next year because there are audits every year, but our objective is to have no disallowances.
In the context of a disallowance, there is quite a complex procedure at EU level. We can make our views known to the Commission, it may or may not agree with us, and there is then a conciliation procedure. We bring our case to the conciliation body. Frequently, and I am certain it was the case in this instance, the Commission will propose a much higher disallowance than the net result and we negotiate it down.
Alan Dillon (Mayo, Fine Gael)
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Has Ireland's status as an EU contributor had any impact on the overall ability to draw down EU funding? Has it had an impact?
Mr. Brendan Gleeson:
No, I do not think so. In terms of my own function, I am accountable for this expenditure. There is a particular risk with these EU funds because they have a system of flat rate disallowances. For example, if the EU concluded that we were operating not in accordance with the rules, a 2%, 5% or 10% correction could be applied right across the entire fund. In theory, you could come up with a 10% correction that exceeded €100 million. We have avoided that. Our net contributor status does not affect the governance of this. It does not affect the systems in the Department or my concern about the very high risk here because there is a high risk.
Alan Dillon (Mayo, Fine Gael)
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I will move on. The Department provides significant funding to Teagasc every year for farm advisory support, etc. With the new cap for 2023 to 2027 and its alignment with the EU Green Deal, it is very much envisaged that many farmers will need additional support. What is the current expenditure that the Department provides to Teagasc for it to deliver its programme and commitments? Does the Department intend to increase any supports relating to both Teagasc's farm advisory division and research?
Mr. Brendan Gleeson:
I am looking at the figures for 2021. In 2021, €141 million given to Teagasc through its grant. It is more than that now. It gets some other funding from research programmes and things like that. It will have a role to play in the context of all these new rural development schemes.
The Deputy will know that they are more complex than previous schemes and they require advisor assistance to farmers in a way that is more significant than previously. The private sector also has a role to play.
Alan Dillon (Mayo, Fine Gael)
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Has Mr. Gleeson received business cases regarding additional needs from Teagasc regarding its farm advisory role?
Alan Dillon (Mayo, Fine Gael)
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How many have been approved by the Department recently?
Alan Dillon (Mayo, Fine Gael)
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Is expenditure expected to increase in supporting farm advisory services on the ground? Many farmers probably do not have the expertise in this area. The expense of having one's own planner adds much more complexity to delivering green schemes.
Mr. Colm Hayes:
I do not have the overall picture in regard to Teagasc staffing levels. However, I can give the Deputy the experience of some of the CAP strategic plan, CSP, schemes that have come along so far, and non-SCP schemes. Teagasc has made the case, for example, in respect of the opening of the agri-climate rural environment scheme, ACRES at the end of last year, that it needed additional advisers on the ground to service the level of requests it expected from farmers. It got approval at the time for the temporary appointment of 60 advisers. My understanding is that since then it has rolled some of those over to other work on a temporary basis again, such as the opening of the derogation scheme in quarter 1 of this year. It is on a case-by-case basis. This is not the full picture in regard to the overall staffing need. However, to answer the Deputy's first question, as he raised the issue on whether the CSP or the CAP and its schemes place additional pressure on the advisory services. We are responsive to that when the case is made on that scheme-by-scheme basis.
Alan Dillon (Mayo, Fine Gael)
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Does the Department intend to approve any future business cases coming before it in regard to additional resources?
Mr. Brendan Gleeson:
That is probably a question for me. There is a healthy tension between State bodies looking for more resources and the Department. That is as it should be. They make a business case. Teagasc has a significant case in at the moment which we are looking at. However, I have to manage a Vote within the parameters laid down by the Department of Public Expenditure, National Development Plan Delivery and Reform. I am quite sure that when it comes to the Estimates 2024 that there will be a limit of 4% or 5% in line with public expenditure expectations and, therefore I cannot say with certainty what will be approved in the context of the Teagasc business case. However, Mr. Hayes has made it clear that we have been helpful to it and we have approved additional staff when necessary. Will we approve exactly what it looks for? Possibly not.
Alan Dillon (Mayo, Fine Gael)
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I make the case for County Mayo anyway for next year.
Brian Stanley (Laois-Offaly, Sinn Fein)
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The next committee member to contribute is Deputy Catherine Murphy.
Catherine Murphy (Kildare North, Social Democrats)
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Good morning, everyone. I want to focus on the Horse and Greyhound Racing Fund. There are no performance indicators. I know the information comes from the Department of Finance but it is very difficult to figure out the Exchequer component of the fund and when it kicks in. Mr. Gleeson might give us some sort of overview of that.
Mr. Brendan Gleeson:
In a way, the horse and greyhound fund is a bit of a misnomer. Up to 2009, there were hypothecated taxes from betting tax, and they were given to the horse and greyhound sector proportionately according to the provisions in the legislation, which require an 80:20 split. Really, the situation now is that there is a Vote allocation for horses and greyhounds every year. It just so happens that it pretty much matches the receipts from betting tax. In a way, "incidental" is the wrong word to use about that, but that is the way it is. There is a submission every year from the relevant bodies. The Estimates process is entered in the normal way and we come out with a payment. I think the grant is now slightly less than the receipts from betting tax. That is where we are now with it.
Catherine Murphy (Kildare North, Social Democrats)
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Mr. Gleeson does not get information directly from the Department on the value of the Exchequer take.
Catherine Murphy (Kildare North, Social Democrats)
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Yes.
Catherine Murphy (Kildare North, Social Democrats)
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Yes.
Mr. Brendan Gleeson:
Obviously, we have information on the betting tax, which was around €90 million last year. The Department of Finance increased the rate of betting tax – the 2% – a number of years ago, and this significantly increased the tax take. We do have information from the body. It got an independent report published by Deloitte in 2017, I think, and it is now repeating that exercise. It is an evaluation of the economic contribution of the horse racing industry.
Catherine Murphy (Kildare North, Social Democrats)
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Will that consider the horse and greyhound industries separately?
Catherine Murphy (Kildare North, Social Democrats)
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That was done for the sector as opposed-----
Catherine Murphy (Kildare North, Social Democrats)
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Is there a value-for-money component to that, or is there a value-for-money consideration within the Department in relation to that?
Mr. Brendan Gleeson:
I do not think we have done an expenditure review on this, but I know there is an exercise under way and that Deloitte is looking at this. I have some of the figures from it. As I understand it – these figures will be published shortly – the value of horse racing to the Irish economy is €2.44 billion, which is up from €1.84 billion in 2017. There are over 30,000 people employed, directly and indirectly.
Catherine Murphy (Kildare North, Social Democrats)
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Most of that relates to horse racing.
Mr. Brendan Gleeson:
All of it relates to horse racing. I am just talking about horse racing right now. It attracts significant inward investment. With regard to horse ownership in Ireland, 1,988 horses are owned by 1,600 non-Irish owners, with fees and expenditure just from those horses amounting to €28 million. That is all going into the rural economy.
There was a similar exercise undertaken on greyhounds. I will come back to the Deputy with the year. The figures were more modest. I think there were 4,000 people depending on the sector for employment.
Catherine Murphy (Kildare North, Social Democrats)
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Is that part time?
Mr. Brendan Gleeson:
I now have the Jim Power report figures to hand. The report is for 2019. It was produced in 2021, actually, but refers to figures from 2019. The industry supported 4,000 full-time and part-time jobs in the economy. In addition, there were 6,000 active greyhound owners. The total number of people deriving an economic benefit from the sector was estimated at 10,000.
Catherine Murphy (Kildare North, Social Democrats)
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That can be a part economic benefit rather than-----
Catherine Murphy (Kildare North, Social Democrats)
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The committee has had Rásaíocht Con Éireann, RCÉ, before it and this has been an issue over the years. There have been issues, for example, with animal welfare, how much the RCÉ allocates to welfare, overbreeding and so on, which are probably matters for a sectoral committee. Nonetheless, welfare is an important issue. Only two tracks were found to be economically viable and if we were to remove the prize money, none of them stood up with regard to paying their way without State intervention. I would have thought those kind of issues would scream a mile regarding value for money.
I had intended asking questions on this matter in any event but then a report concerning another sport came out last week and was reported on in the newspapers. It was done for the Football Association of Ireland, FAI. There is no doubt that if one looks at this just from the point of view of excise duty, online betting would not have been a feature when this fund was established initially. A huge amount of betting takes place online on a whole range of sports. I expect soccer is one of the significant ones, if not the most significant other one. Yet, there has been no change in the fund. I presume legislation would be required to change that.
We are conscious of what is allocated to other sports but the amount allocated to horse and greyhound racing is unique. There is a lot of competition from Sport Ireland with regard to the amount of funds they can allocate. Was that aspect considered at any point in relation to the change in the nature of how that excise duty is derived?
Mr. Brendan Gleeson:
The Deputy mentioned two things. One was about the viability of stadiums and the sector. One could argue that if it did not need public support for those reasons, it would not get public support. These are policy questions for Government. They are legally provided for, so I do not have any latitude regarding what I can and cannot do here.
Regarding the viability issues, one of the things we have asked of RCÉ is to do a new strategic plan. We have asked it to look at rationalisation in the context of making stadiums more viable and consolidating the footprint of the industry to make it more viable. It is looking at that. We have not seen it yet. I can absolutely assure the Deputy that if RCÉ comes out with a plan like that, it will be hotly contested in this House and everywhere else.
Catherine Murphy (Kildare North, Social Democrats)
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It will be public, however.
Mr. Brendan Gleeson:
Yes. These things are difficult.
Regarding the fund, if I was the FAI I would probably do a report like that as well. The fact is the State and successive Governments have felt that these sectors deserve support for a variety of reasons, including the economic benefit derived in rural communities from these sports.
Catherine Murphy (Kildare North, Social Democrats)
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A similar argument could be made about the social benefits of the most-played sport, some of it at hobby level. However, I understand this is a policy issue, and I am looking at value for money and what reports are there. Mr. Gleeson has given me a response on that.
I will move on to Horse Sport Ireland. There was a controversy around a proposed facility which did not go ahead. One of the issues that emerged was that an allocation was made and there were governance issues. Following that controversy, has there been any specific engagement on the matter? It threw up some issues regarding the control the Department has over that grant when it is paid. Horse Sport Ireland appears to have quite a lot of latitude.
Mr. Brendan Gleeson:
Horse Sport Ireland is a very atypical body. It is a company limited by guarantee and a kind of a public-private partnership, if one likes. It is the national body for sport horses but it is not a State body in the usual way. It does have some of the characteristics of a State body. The Deputy is right about that controversy. The facility did not go ahead. At the time, we wrote to the chairman and asked him to ensure that whatever he was doing was consistent with public procurement guidelines. There was a doubt about that because leasing property is generally not covered by public procurement. There was a little bit of uncertainty about that but it did not go ahead anyway.
Some of the funding we give Horse Sport Ireland is for administration and some of it is for breeding programmes. I understood at the time that our funding was not going into that proposal. It was not part of it. Horse Sport Ireland also gets funding from the Department of Tourism, Culture, Arts, Gaeltacht, Sport and Media for its sporting activities. We fund the breeding elements - the development of breed - and the Department of Tourism, Culture, Arts, Gaeltacht, Sport and Media funds what used to be the Equestrian Federation of Ireland, that part of it. There is a new board in there, so the Deputy will be aware there was also a controversy about the resignation of the board. The Minister for Agriculture, Food and the Marine has powers now, under an agreement with Horse Sport Ireland, to appoint a chairman and up to four members. We have done that and we selected people with deep experience, particularly governance experience. They are in there now.
This is something we have to reflect on because I think it is a very good idea to have these partnerships with the sector. Horse Sport Ireland is an important body for the support of the sector, but there are issues we will have to consider in the context of governance because of how atypical it is.
Catherine Murphy (Kildare North, Social Democrats)
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I acknowledge that it is a diverse organisation, with everything from pony clubs to elite sport involved. I accept that, and it requires proper governance.
Mr. Brendan Gleeson:
One of the things that happened a number of years ago was that we got representations from the sector seeking more support. We said we could have a look at it. There was a cross-sectoral agreement on a strategy called Reaching New Heights. We then said, "Fine, if you want more support, we want to look at the governance." We then got Indecon to go in and do a governance report, and it made recommendations about the shape of the board and how people would be represented. At the time, there was a 19- or 20-member board. It was enormous. That was important because people wanted to be represented. However, it was not how one would shape a board, really, if one was trying to have a functional board. The solution we came up with was to have a smaller board but to have a series of sub-committees on which all of the stakeholders and affiliates would be represented. That is the way it is now.
I acknowledge the controversy. It had to do with more than just that specific incident. However, we have put ministerial nominees in there now, and the intention is to consolidate the position of the organisation. We will have a look at it then.
Catherine Murphy (Kildare North, Social Democrats)
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I thank Mr. Gleeson.
Brian Stanley (Laois-Offaly, Sinn Fein)
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Does the Deputy have any further questions?
Catherine Murphy (Kildare North, Social Democrats)
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Yes, I will come back with more.
Brian Stanley (Laois-Offaly, Sinn Fein)
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Mr. Gleeson answered a question about the source of funding for the horse and greyhound fund. The betting tax fills its coffers, with 100% of its funding coming from the betting tax. That has always been a question. There are no performance metrics provided for that fund in the Revised Estimates for Vote 30? Why is that?
Mr. Brendan Gleeson:
If that is a deficiency in the format of the Vote, we can fix that. However, from the point of view of assessing the performance of the sector, we certainly ask it to do that. It is involved in an exercise right now to assess the economic performance of the sector. It regularly produces a statistical bulletin which shows the number of owners and trainers, and there is a series of performance metrics in that. We ask it, in the context of our oversight, to produce those figures for us. However, they are publicly available figures and we can certainly make them available to the committee if members wish.
Brian Stanley (Laois-Offaly, Sinn Fein)
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Some members of the committee were taken aback by the amount of public funding allocated for prize money. It would seem to be a significant part of that pot. What has that figure been in the last three years?
I refer to when you divide the 80% with respect to horse racing. What is it when you take the 80% that is allocated to the horse racing under the horse and greyhound fund and when you look at what the prize money would be?
Mr. Brendan Gleeson:
By way of an initial comment, I can see how the contribution of the funding to prize money might play out in the public. However, the people who are in the best position to determine what is best for the sector are the people who are developing the sector. This is Horse Racing Ireland, HRI. Obviously, when we establish an upper limit on prize money, it is in consultation with HRI. Its point is that this is the critical issue. It is a competitive sector. We are competing with France, the UK, Australia and the US. It is the prize money that brings in trainers and owners. It is those high-quality horses that are being brought in for training that will have that filter-down effect in the economy. That is the basis for the investment into prize money. I am not in the best position to determine whether or not that is the right thing to do. However, the body that has statutory responsibility for developing the sector considers it to be. I have the figures for 2021. I do not have them for subsequent years, but I can give them to the Cathaoirleach. The contribution to prize money from HRI in 2021 was €43.1 million. The prize money from owners and sponsors in the same year was €19.464 million.
Brian Stanley (Laois-Offaly, Sinn Fein)
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What was the overall allocation to HRI that year?
Brian Stanley (Laois-Offaly, Sinn Fein)
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The figure in my head is 60%.
Brian Stanley (Laois-Offaly, Sinn Fein)
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It is significant.
Brian Stanley (Laois-Offaly, Sinn Fein)
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There is that argument. There is also the argument from people in the sector that a very small number of stables and owners benefit from that. They say there is a very small concentration in how that pans out in the scheme of things over the year. It might end up in very few hands.
Mr. Brendan Gleeson:
I have figures on that. The distribution is wider than I had thought it was. I refer to the HRI fact book for 2021, which I also referred to when we were talking about metrics. There were 394 fixtures, with 8,700 individual runners and 25% of these horses winning at least one race. Over 6,000 of the individual runners won prize money at some stage. This equates to approximately 69% of individual runners. Of approximately 3,000 individual races, 2,600 have prize money of under €25,000, with 72 having prize money of a sum greater than €100,000. One of the things they have done in recent years - and I hope I am right about this - is they have extended the prize money to the first six across the line. They have broadened the availability of prize money to people.
I can see why the Cathaoirleach would want to look at this. It is a perfectly legitimate question.
Brian Stanley (Laois-Offaly, Sinn Fein)
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I will ask another question on that. There are also complaints from various race tracks regarding how some race tracks do not benefit to the same extent from the prize money and funding. What does the Department do there? Mr. Gleeson spoke earlier about the need to consolidate the footprint of the industry. Many people in the sector are looking at that. Attendance at race meetings is not what it used to be. People do not have as much time to go to the races as they used to have. There are not as many publicans in the country as there used to be. People cannot take a day off and head off to the races as easily as they used to do. Also, with technology, people do not have to be there because they can bet online etc. A case has been made by some of the smaller or less popular tracks around the country that they do not benefit to the same extent. What is happening there? Basically, they are becoming economically unviable and that is contributing to it.
Mr. Brendan Gleeson:
To clear up one issue, when I spoke about the strategic plan, that was in relation to RCE and was for greyhounds. It was not for horses. I do not know the process for determining prize money. Obviously, there are flagship races around the country that need high levels of prize money to attract runners who will attract media attention, crowds etc. However, I am not sure of the process to determine what each tracks gets. I imagine it would have to do with the quality of races etc. It is a legitimate question. The HRI has offered to publish more information on the distribution of prize money in its annual report in the future. At least there will be transparency around the distribution. Then, that might provoke another discussion. There may be tracks that still feel they are being disadvantaged. However, at least it will be transparent.
Brian Stanley (Laois-Offaly, Sinn Fein)
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There was a bit of transparency in the figures that were given. They may have been given in the past, but that was the first time I came across that.
Brian Stanley (Laois-Offaly, Sinn Fein)
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In relation to the governance of the industry by the Department, which is the significant funder, what is the extent of the Department's supervisory role regarding the IHRB and the HRI?
Mr. Brendan Gleeson:
First, there is a legal basis for the establishment of these bodies. The Department had a role in establishing that legal basis in the Oireachtas back in 2016. They have a chairman and a board. They all have fiduciary duties to the organisation and statutory functions. That is the first point. Second, we made them accountable to the Comptroller and Auditor General at that time. I do not think they had been prior to that. Third, we have a parameters letter that says, with very broad limitations, how they can spend the money they are given. There is also a letter of shareholder expectation that articulates details about the governance, what their obligations are as a board and the role of the chairman. If dividends to the State are to be considered, there is a policy around that. Fourth, we have a process regarding when they look for money. We look for cash flow statements and we want to be sure that they need the funding they are given when we give it to them. Finally, we have governance meetings with them on a reasonably regular basis. There is an Assistant Secretary who is in charge of that sector who meets with these bodies regularly. I try to meet with them at least once a year.
Brian Stanley (Laois-Offaly, Sinn Fein)
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I will go back to the issue of prize money in the horse racing industry. The Department may allocate, for example, €80 million to that, although the horse and greyhound fund will probably be €100 million this year. Is that the case?
Brian Stanley (Laois-Offaly, Sinn Fein)
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Let us say the figure is €80 million. I think the Department meets with them a few times per year. Would there then be a discussion around the portion of that fund that goes to prize money being kept within a certain amount?
Mr. Brendan Gleeson:
In our parameters letter, we tell them that they cannot spend more than 80% of the fund on prize money. They spend less than that on it. That is on the basis of discussions we have had, as well as their deliberations on the best bang for the buck in terms of generating that economic-----
Brian Stanley (Laois-Offaly, Sinn Fein)
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So they could spend €63 million or €64 million on it.
Brian Stanley (Laois-Offaly, Sinn Fein)
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In relation to private owners and the private sector, it provides 20%.
Brian Stanley (Laois-Offaly, Sinn Fein)
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Many of the people who would be expected to contribute to that are some of the people who are benefiting most from this. I know one does not want to strangle the goose that laid the golden egg, but would they not be in a position to pony up a bit more?
Brian Stanley (Laois-Offaly, Sinn Fein)
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Are there discussions around that? If the State put in €40 million and the private sector put in €20 million, many people who are not tied to the industry would be surprised at that. They may have been of the opinion that all the funding came from within the sector and not from the taxpayer.
Brian Stanley (Laois-Offaly, Sinn Fein)
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But has the Department ever raised it with the board when it meets with it?
Brian Stanley (Laois-Offaly, Sinn Fein)
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Yet, the Department is providing it on behalf of the State.
Mr. Brendan Gleeson:
We accept the proposition that spending money on prize money is a good thing. When I look at this, I look at how the industry is doing. By and large, its contribution to the economy is increasing. Its contribution to employment creation is increasing. Those things, therefore, look right.
This is a sector in which many of these people do not have to be in Ireland. They could be in France, the UK or anywhere. What attracts them to Ireland is the combination of the culture here, the reputation we have for producing top quality bloodstock, the reputation we have for training facilities and having the best trainers in the world, and the State infrastructure for supporting the sector. The critical question from a public investment point of view is whether all of this would happen without public investment. I do not believe it would in the same way.
Brian Stanley (Laois-Offaly, Sinn Fein)
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I am not arguing against public investment. I am probing this because there are legitimate questions coming from outside the sector and from some people in the sector.
Mr. Brendan Gleeson:
There are two things I should have mentioned earlier. One is transparency and we will get that into the annual report. HRI will put it in its annual report. There is no resistance to this from HRI and I want to be clear about this. The second thing is that we have agreed, in the context of the letter the committee sent us, to have a look at this with HRI and to report back to the committee on it. We will do this.
Brian Stanley (Laois-Offaly, Sinn Fein)
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People used to say one time that it is because of the amount of limestone underneath County Kildare. I do not know whether that has anything to do with it. Ms Fanning might know more about it than I do. I do not know whether there is anything to it.
Brian Stanley (Laois-Offaly, Sinn Fein)
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It was the reason always given that the horse industry was more based in Kildare than in the midlands. They used to say it was because of the different soil structure.
Marc Ó Cathasaigh (Waterford, Green Party)
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I was briefly away elsewhere. I apologise if there is a small bit of duplication with regard to what has been covered by Deputy Catherine Murphy and the Cathaoirleach. I want to get through a range of issues but I will start with the horse and greyhound racing fund. The 80:20 split is set in law as I understand it. Is there any flexibility in it? Let us say one of them is performing in a way the State is quite happy with and the other is not. During Covid we saw a situation where Horse Racing Ireland needed additional subvention. Because we were locked into this rigid 80:20 split we then had to top up Greyhound Racing Ireland to the same amount. Is there any flexibility in the legislation or is it 80:20 regardless of how either of the institutions is behaving?
Marc Ó Cathasaigh (Waterford, Green Party)
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Has this been looked at? I understand it is a single line in legislation that outlines the 80:20 split.
Mr. Brendan Gleeson:
Something I have been asked in the context of the report is whether I would look at this. I have a difficulty with that because it is Government policy and I cannot report to the committee on Government policy. What I can say is this issue was pretty well ventilated at the Oireachtas Committee on Agriculture, Food and the Marine a while ago. In a way it does not require a report. The advantages are clear in that it provides certainty around the funding of the greyhound sector and horseracing sector in a way that successive Governments have felt to be appropriate. The disadvantage is what has been mentioned by Deputy Ó Cathasaigh in that they both get-----
Marc Ó Cathasaigh (Waterford, Green Party)
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It is extraordinary that there is no accountability to go along with the funding in either of the sectors.
Mr. Brendan Gleeson:
I do not think it is true to say there is no accountability. Both of these bodies are accountable to the Oireachtas. I have oversight arrangements. All of the normal accountability arrangements are in place but the funding arrangements are set in law. It is always possible to change the law. I am precluded from commenting on the merits or demerits of Government policy and I know Deputy Ó Cathasaigh knows this.
Marc Ó Cathasaigh (Waterford, Green Party)
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Yes. It does seem extraordinary to me. I suppose I can comment on it. The fund is financed through excise duty collected from a tax on betting. Legitimate points were made during the week that online betting has changed where betting is happening. It is only these two sports, as I understand it, that benefit from this fundraising mechanism. Whether this is right, just or correct is a separate issue. If a deficit arises it is topped up by Exchequer funding. How often is it topped up by Exchequer funding? How often is the full amount made up from this excise duty?
Mr. Brendan Gleeson:
I touched on this earlier. I said the term "fund" is a bit of a misnomer. There was a hypothecated tax up to 2009 but the reality is that what happens now is a negotiation in the context of the normal Estimates process every year and funding is made available through the Estimates. Part of the justification for this is that the full cost of the Estimate is more or less covered by the betting tax. There is a tenuous link between the funding provided now and the betting tax. In other words this betting tax is not taken out of one account and put into another for the benefit of these bodies. It is not hypothecated in this way. This is the way it has operated since 2009.
Marc Ó Cathasaigh (Waterford, Green Party)
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In the specific context for 2021 it was €96 million overall. Mr. Gleeson is saying it is not strictly hypothecated and I understand what he is saying on this. Do we know what was the revenue from the excise tax on betting in 2021? Was it of the order of €96 million? It is certainly presented in the public eye-----
Marc Ó Cathasaigh (Waterford, Green Party)
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-----that the money from the betting covers the outlay here. This is absolutely understood in the eye of the public.
Mr. Brendan Gleeson:
To a large extent this is true. There is a betting tax and the betting tax was certainly of the amount of the mid €90 millions in 2022. This is correct. It covers or close to matches the cost of this but it is not a strict process of hypothecation. It is part of the policy picture that supports the investment in these sectors.
Marc Ó Cathasaigh (Waterford, Green Party)
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It is a difficult one to accept. I know what Mr. Gleeson is saying. The Department of Public Expenditure, National Development Plan Delivery and Reform does not like the idea of hypothecation but it certainly exists in the public eye. The documentation we have states that if there is a shortfall it is topped up by Exchequer funding. What Mr. Gleeson is saying is this is not the case and the full amount is made available through Exchequer funding and through the Vote.
Marc Ó Cathasaigh (Waterford, Green Party)
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It would be fair for us to expect to be able to have clear sight of how much is coming in, albeit not strictly hypothecated, versus how much goes out.
Mr. Brendan Gleeson:
What we have clear sight on is how much betting tax is coming in. Before coming to this meeting I tried to get some figures on what came from where in terms of various sectors. I am not sure Revenue has it. I could not get it anyway. We have sight of what is coming in and we have sight of what is going out through the Estimates process, and we have a say every year in this context. There is then a specific issue that under the legal provisions we have to get the fund approved separately to the Estimates process. We have to go to the Oireachtas Committee on Agriculture, Food and the Marine every year and get the amount in the fund approved. It goes through a further process in the Oireachtas beyond what normal Estimates go through.
Marc Ó Cathasaigh (Waterford, Green Party)
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I am keeping an eye on the clock. I want to come back to the issue on the Irish Horseracing Regulatory Board. The Department asked for information on remuneration and staff salary bands in 2021. Was is forthcoming?
Marc Ó Cathasaigh (Waterford, Green Party)
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I know what has been said about it being an independent body but it derives a lot of funding from the taxpayer. In May 2021 it stated the maximum early retirement payment to any individual would not exceed 104 weeks of salary and-or equivalent redundancy calculations and there would be no exception to this. Subsequently in June it paid the CEO €142,000, or 58%, more than the amount payable if the scheme conditions had been applied as stated. Surely the Committee of Public Accounts and the Secretary General of the Department have a view on public money being spent in this way against the organisation's own advice.
Mr. Brendan Gleeson:
Yes, I agree. That happened in September 2021. I certainly was not aware of it. I do not believe HRI was aware of it at the time. It did not sanction it. The IHRB's position was that the top-up did not derive from public funds but from its own private funding. This is a little bit of a circular argument.
Marc Ó Cathasaigh (Waterford, Green Party)
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It is.
Mr. Brendan Gleeson:
I absolutely accept that. We have asked HRI to look at this from a legal perspective to see what can be done about it. In the context of our own governance of the organisations we have agreed to conduct a governance review. The rules on this should be clear. In the context of State agencies there is a circular that states what CEOs should be paid and this determines their pension arrangements. This is not exactly a State agency. It is a private organisation. In the context of the horseracing Acts it provides a statutory function as a regulatory body. It is one of these atypical bodies. When we introduced the legislation in 2016 we were anxious to improve governance without compromising the independence of the organisation and without compromising the traditions of the sector.
This is a body that is made up of the Irish national hunt club and the Turf Club, with a long history of tradition in providing very good service to the racing sector. There are things we have to look at and we have committed to look into them 100%.
Marc Ó Cathasaigh (Waterford, Green Party)
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We need accountability for public money. That is our role here, certainly. I want to talk quickly about the TB eradication programme, which Deputy Colm Burke went into in a great deal of detail in the first contribution. It is a lot of money. Are we analysing it for value for money? I absolutely want to qualify that by saying, and Mr. Gleeson said it at the start, that there has been great progress. I absolutely know and understand the stress people come under when one of their herd goes down on the reactor. The pressure that applies to a farm family is absolutely massive. I am in no way downplaying that. We are setting this goal of eradication. Is that an achievable goal? I was looking at the spatial distribution of the TB restrictions in Ireland. There is a real concentration around the Border counties or at least there was in 2019. Is that still the picture? How are we judging value for money for this? I understand the importance of the programme, but can we get to a position of eradication? Is that a realistic and attainable goal? We are being asked to justify total expenditure of up to €1 billion between now and 2030.
Marc Ó Cathasaigh (Waterford, Green Party)
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I am sorry; in an international context, I know places like Spain and Portugal have a completely different climate and agricultural system. This is in terms of Wales, Scotland and England and the international context. I know exactly what Mr. Gleeson is saying. To trade on our beef and all the rest of it, we have to say that eradication is where we are going.
Marc Ó Cathasaigh (Waterford, Green Party)
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Can Mr. Gleeson show me an international comparison that is an actual comparison as opposed to a hotter, drier climate with fewer head of beef etc? Is this achievable? Have we seen this achieved in a similar context elsewhere?
Mr. Brendan Gleeson:
Before I ask Dr. Fanning to come in, because she is the expert, we had a similar issue with brucellosis a number of years ago, which seemed equally intractable and was going on for decades. We now have brucellosis-free status. Therefore, it is possible to do these things, but it is not easy. Some of the things we might have to do may be unpopular and some may be costly. Our approach now, however, because I do not think it can be done any other way, is to try to work with farmers through a TB forum to try to agree on measures. If we try to impose measures on the people who are affected by this disease without consultation, it tends not to work very effectively. Sometimes, we might be able to eradicate this disease by taking extreme measures, for example, which would not wash politically with farmers or farm bodies. There is a degree of fairness involved. We have to work with farm bodies on what is possible.
I will ask Dr. Fanning to comment on the international comparison if it is not imposing too much of a burden on her.
Dr. June Fanning:
With regard to international comparison, the wildlife component is the difficult piece in relation to TB. It has been eradicated elsewhere in the world, such as Australia, for example, but they were able to deal with the wildlife host or species that was involved in a different way than we can with the badger. The badger is a protected species. While we cull badgers as part of the TB eradication programme, we recognise that it is not a sustainable solution long-term. That is why we have rolled this out after extensive research has shown that badger vaccination is no worse than culling from a disease control point of view. The wildlife piece does complicate the eradication but as the Secretary General said, we have the right tools now in the TB forum to address it with stakeholders from the farming bodies to private veterinary practitioners to meat processors and all the stakeholders involved across the chain. As the Deputy pointed out, it is a serious financial and emotional difficulty to anyone who is locked up with TB.
From our point of view, it is a multifactorial disease, and the spread happens in a number of different ways. A lot of stuff has been introduced through the forum and through our approach to it in the Department to tackle the individual outbreaks so that the source of infection is identified with an outbreak. While the outbreaks are hovering around the early 20,000 for reactor numbers, the herd incident for 2021 or 2022 had decreased slightly, which is good. We are seeing less herds go down but larger outbreaks within those herds. As I touched on earlier, that is with regard to dairy expansion, larger herds, fragmented herds or herds that buy in more animals. Part of the problem there is that they are at higher risk because of the number of movements. It is, therefore, a very complex disease but we are addressing it across a number of areas and with stakeholders, which will ultimately lead to eradication.
Marc Ó Cathasaigh (Waterford, Green Party)
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On the badgers-----
Brian Stanley (Laois-Offaly, Sinn Fein)
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Deputy Ó Cathasaigh might be brief. I will bring him back in later.
Marc Ó Cathasaigh (Waterford, Green Party)
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On culling versus vaccination, I have all sorts of reasons why I do not like badger culling from my own political background. I also understood it to be fantastically expensive per badger culled, however. Are we phasing that out as a practice entirely? Are we moving towards vaccination? Where does the balance lay currently? What is the current state of play?
Dr. June Fanning:
The balance currently, if we take 2022, for example, is that just over 12,000 badgers were involved in the wildlife programme. Just over 7,000 of them would have been vaccinated and 5,000 would have been culled. That is a serious shift from what we would have had at the start in 2019 when we rolled out vaccination. It would have been less than 2,000 and we still would have been dealing with similar numbers of badgers. It is something we are phasing out.
Brian Stanley (Laois-Offaly, Sinn Fein)
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We will have a second round of questions. Deputy Verona Murphy has seven minutes, and we will see how we go.
Verona Murphy (Wexford, Independent)
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To come back to that issue, is 12,000 the total recorded population of badgers for 2022?
Verona Murphy (Wexford, Independent)
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Yes, in the country.
Dr. June Fanning:
Okay. Obviously, as a secretive and nocturnal species, it is hard enough to get an accurate measure on the population. The most recent study was carried out by University College Dublin, UCD, in 2021 and estimated the badger population to be approximately just over 90,000. That is lower than previous studies sometime prior to that, which would have shown that-----
Verona Murphy (Wexford, Independent)
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That is okay; I am on the clock.
Verona Murphy (Wexford, Independent)
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The reason I am asking is that I have never, and I am half a century old, seen as many badgers dead on the roadside as I travel the roads. I do quite a bit of travelling but I am actually quite concerned. The reason is that hitting a badger is like hitting a cement block. It can cause extensive damage and probably a very serious accident. Other animals that do that kind of damage are contained in some shape or form. I appreciate there are animal welfare risks. Primarily, our concern is definitely the eradication of TB. However, if we do not continue with culling and we have an overrun of the badger population, they will pose an extreme road safety risk just like our deer. We have deer in herds in County Wexford in places where we have never seen deer before. I am concerned. I deal with farmers every day of the week with regard to TB. They are not happy that they are getting value for money for their input into the scheme. I am not aiming this at Dr. Fanning. I am saying in general that the consensus is that the scheme is not working to its potential. They have a significant financial input of just short of €400 million if I am not mistaken. Is that correct? Is that over the lifetime of the scheme?
Verona Murphy (Wexford, Independent)
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Each year, their contribution is growing. It is in the double million figures. It is a very significant event for any family farm to end up with TB. There is a stigma attached to it even still. We must look at this in the round. It is not just about animal welfare or TB eradication. We are now going to see it become a road safety concern. As Dr. Fanning said, badgers are nocturnal creatures. Anybody who is honest about this sees them dead on the side of the road frequently now.
I live in the countryside near beaches. I do not recall ever seeing this as frequently as now. I do not expect an answer to it but I am concerned about the direction it is going. I am concerned that we are not listening to the farming community, or that we think farmers are moaning because they have to deal with it or pay for it. We need to involve them more and we need to take this issue of deer and badgers more seriously. I am aware that we have talked enough about it now but I will be coming back on it. I know too many people who are facing too many hardships. As someone who has hit a badger I understand the damage it can do. It was not from a speed perspective; it was just the fact that a badger is a particularly hard animal on the road.
I will return to forestry. Mr. Gleeson said that, in effect, when there is a change in proposed schemes, applications slow down. Is this the reason no applications went into the Department in February? I looked at the forestry dashboard with regard to felling licences and so on. From the perspective of the afforestation licence dashboard, in the first four months of 2023, 15 km of forest road licences was issued. This is compared with nearly four times that amount in 2022. Is there a reason behind that? The same applies with regard to felling licences, where there has been a 100% drop in the issuing of such licences.
Verona Murphy (Wexford, Independent)
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Is that on the ash dieback?
Verona Murphy (Wexford, Independent)
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But the Department has not been accepting applications for the ash dieback scheme since January. Is that correct?
Mr. Colm Hayes:
We have not been accepting applications for any grant-aided activity since 1 January because there is no forestry programme under which an applicant may apply. We have absolutely been accepting applications for felling licences. Felling is completely unaffected. We have had more than 1,000 felling applications since 1 January and we have issued more than 1,000 felling licences in the same period.
Verona Murphy (Wexford, Independent)
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So who compiles forestry dashboard?
Verona Murphy (Wexford, Independent)
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Will Mr. Hayes tell me that again? Is it 1,000 licences for felling?
Mr. Colm Hayes:
That is applications received. As of last Friday's dashboard, there were 1,058 applications and 1,022 licences were issued. It is also important to understand the context of road felling licences. The past two years have been record years for the number of felling licences issued in the State. It was 10 million m³ and 9 million m³, respectively, in each of those years.
Verona Murphy (Wexford, Independent)
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Were they predominantly issued to Coillte? Were the majority of them - or the higher percentage - issued to Coillte?
Verona Murphy (Wexford, Independent)
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Why was the Minister's current application to the EU delayed for two and half years? Why was he two and a half years late in making that request?
Verona Murphy (Wexford, Independent)
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How many trees were planted in those two years?
Verona Murphy (Wexford, Independent)
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It would not be significant considering that our targets have been revised downwards and we are now at 8,000.
Mr. Brendan Gleeson:
There are multiple reasons for that. Some are the licensing difficulties that we have, which we have acknowledged and are resolving. Certainly last year some of it was the anticipation of a new programme with much more attractive rates. People tend to press the pause button when they know there is something better coming along.
Verona Murphy (Wexford, Independent)
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I heard Mr. Gleeson saying this earlier.
Mr. Brendan Gleeson:
We sent in the details of the forestry programme and we engaged in a significant public consultation before we did this. There is lots of work to do before an application is submitted. We submitted documentation to the Commission in November and we have been engaged in a very detailed conversation with the Commission since then. They have their job to do. They must make sure it is consistent with environmental law and consistent with competition law. It is a complex process.
I will make the point, however, that what we are going to have after this is a programme that will provide support for people for 20 years. It will provide extraordinarily generous incentives for people to do that.
Verona Murphy (Wexford, Independent)
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It is going to take some convincing.
Verona Murphy (Wexford, Independent)
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It is like anything; Mr. Gleeson will be here this time next year and I will be asking how it is going. I suppose we will see how it goes.
I have a question for Mr. Callanan. With regard to the measuring of emissions, are CO2 and methane measured in the same way?
Verona Murphy (Wexford, Independent)
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Does that make sense? Methane, as we know, is less harmful. It stays in the atmosphere a lot less, for ten years effectively when it is dispersed, whereas CO2 is accumulated. How does it make sense to convert methane emissions into CO2?
Mr. Bill Callanan:
There are a couple of levels to that question. The first point is the international one. Internationally, the scientific community has been trying to generate mechanisms to allow the whole debate and the policy formed, to progress in relation to doing it. They proposed the relativity in the CO2 across all gasses. There are approximately six.
Verona Murphy (Wexford, Independent)
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Let us consider the farmer in this country who is producing methane, and then consider some body that is operating vehicles, for example, Irish Rail with trains that are not carbon efficient, if methane is gone within ten years and is less harmful why do we concentrate so heavily on the farmer when there is another sector producing lots of carbon emissions? Why do we concentrate so heavily, and continually penalise, the agricultural sector to meet their targets?
Verona Murphy (Wexford, Independent)
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Mr. Gleeson is the first Secretary General I have heard to say he was not an expert. We have recorded it.
Mr. Brendan Gleeson:
Good, yes, write it down. On the methane argument, methane is a flow gas; it flows into the atmosphere and ten or 11 years later it flows out. That is a double-edged argument for agriculture. I believe it has been articulated in a particular way by stakeholders but it is a double-edged argument. I believe it means that if one increases the volume of methane in the atmosphere, it has a much more dramatic warming effect than CO2. In the short term it has a much more dramatic warming effect but if we want to stop methane contributing to global warming, it must be stabilised and reduced slightly. Then the overall volume of methane in the atmosphere is not increasing and the warming effect of methane will have been stabilised.
Verona Murphy (Wexford, Independent)
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At what rate does CO2 heat in comparison to methane? Mr. Gleeson said he is not an expert but that very much sounded like an expert opinion on methane.
Mr. Brendan Gleeson:
There is one other strand to methane, if the Deputy does not mind me saying. Some environmentalists would argue that if we dramatically cut the volume of methane in the atmosphere, it will lead to cooling. With the arguments around accounting for methane, anybody can use them to suit themselves. Mr. Callanan referred to the international standards. If anything I say here is heresy, perhaps Mr. Callanan will correct me. Under international standards, there is a system of turning everything into CO2 equivalents, but there is no magic bullet in the way methane is accounted for.
Verona Murphy (Wexford, Independent)
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What does reducing CO2 do?
Verona Murphy (Wexford, Independent)
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Equating it to what Mr. Gleeson just said, if we know how much reducing methane reduces warming, what does CO2 reduction do in comparison?
Mr. Bill Callanan:
It is 28 times for methane as compared with CO2. I think we are straying into a bit of policy here. There are two things to be conscious of. Both the climate Act and the programme for Government recognise the distinct biogenic characteristics of methane and, therefore, the policy emanating from the House and from Government recognises the differential between methane and CO2 in terms of establishing targets, etc., consequent on that. Within the overall framework at national level, there are targets; we have to hit 51%. The disaggregation of that was decided by Government. We have-----
Verona Murphy (Wexford, Independent)
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Based on the Department's advice.
Verona Murphy (Wexford, Independent)
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Based on whose advice?
Verona Murphy (Wexford, Independent)
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I understand Government------
Verona Murphy (Wexford, Independent)
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Before Mr. Callanan finishes, I just want to ask him the question.
Brian Stanley (Laois-Offaly, Sinn Fein)
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Briefly.
Verona Murphy (Wexford, Independent)
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To my knowledge nobody in government is an expert on climate, not in our Government anyway. Who gives Government the advice to set the targets?
Verona Murphy (Wexford, Independent)
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Does the Department of Agriculture, Food and Marine have somebody sitting on that?
Mr. Bill Callanan:
The CCAC is independent in its working. Within the overall structure, Teagasc has a seat on that. The director sits as part of the CCAC process, as does the director of the Environmental Protection Agency, EPA. There are a number of nominated positions within the CCAC. It worked out the budget for 2025 and 2030 and an indicative 2035 budget. Government has effectively adopted that as its policy position. From the Department of Agriculture, Food and Marine's point of view, that was disaggregated down into a 25% reduction in emissions for our sector and similarly a land use, land-use change and forestry, LULUCF, target to be agreed and a process to establish that within 18 months of the decision of Government, which was the middle of last year.
Catherine Murphy (Kildare North, Social Democrats)
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I wish to ask about the subsidising of the racing industry. I live in County Kildare and I represent Kildare North. I am acutely people get a lot of enjoyment from racing, particularly horse racing. How does the industry in Ireland compare with other countries? Mr. Gleeson referenced the UK and France. Has a recent comparative analysis been done?
Ms Caroline Ball:
There is some information provided by HRI on this. As the Secretary General said, in other major racing jurisdictions horse racing is funded by government both directly and indirectly. I have some statistics for some countries. In France, betting returns from the state-owned tote guarantees that 8% of turnover goes towards funding the French racing industry. That amounts to around €400 million in government support per annum. In Britain, racing is funded by a government levy on betting. In the US, it differs from state to state, but generally the state-owned totes, supplemented by casino revenue, fund racing. In Hong Kong, the state-owned tote commits 3.2% of turnover to racing. That figure is in excess of €800 million per annum. Those are just some of the statistics.
Catherine Murphy (Kildare North, Social Democrats)
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It would be quite useful to get a comparison. We are a very small country in comparison to France or the UK from the point of view of our population.
I tabled a parliamentary question about influencers some time ago and how much was being spent. I was really surprised that the reply stated that HRI paid an influencer to promote Cheltenham. I understand why we promote our own industry, but why would we be promoting that? I know there is a significant return in terms of wins and things like that. Why would we spend any money promoting that? Does any of that come from public funds? I know that other money was spent on online activities with the same influencer. However, I was very surprised to see that.
Mr. Brendan Gleeson:
I did not know that. I did not see the Deputy's question. We in the Department do not pay any influencers, apart from ourselves. I imagine that Cheltenham was a huge showcase for Irish bloodstock and for Irish racing. It is a significant promotional opportunity for the Irish sector. It takes place during the week of St. Patrick's Day. It is a hub of international activity and Irish horse racing is right at the centre of it.
Catherine Murphy (Kildare North, Social Democrats)
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We would not expect the British to promote Punchestown, would we?
Catherine Murphy (Kildare North, Social Democrats)
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I was very surprised to see it.
Regarding any caveats relating to the funding, there are issues with harmful gambling and the welfare of animals. I refer to retired dogs as opposed to ones that are overbred and never make it to a racetrack. They would be the bulk of that. Are there any caveats when the funding is being allocated?
Mr. Brendan Gleeson:
The regulation of gambling is a matter for the Department of Justice and not for us so I am not sure we do it. Certainly, in the context of the funding we give to greyhounds, we insist that at least 10% of it is spent on welfare and integrity. In terms of the activities in Rásaíocht Con Éireann, RCE, 50% of sponsorships, 10% of admissions and 5% of net total profits are spent on greyhound care funds. They have opened a couple of greyhound care centres. A total of 2,234 greyhounds were re-homed in 2022. There is a panel for foster care; a greyhound support scheme to assist injured greyhounds; a confidential phone line now; more inspections of greyhound establishments; and a much better traceability system.
The Deputy and I had a chat about this before. Things are not perfect but I think the traceability system is much better than it was when we spoke before. RCE is moving into phase 2, involving whole-of-life traceability for dogs including birth, registration, their racing career, changes of ownership and location, microchip scanning project, the capture of bet data, the capture of medicine records, booster inoculations, health checks, sampling history and adverse analytical findings. All that will go into phase 2 of the traceability system.
It is not perfect but, if I might say so, maybe RCE does not get praise often enough. I think it has done a really good job in terms of improving the traceability system. It needs to be given credit for the good things it is doing. That does not mean that more is not needed. We impose that kind of parameter on the funding we give it. We insist that at least 10% goes on welfare and integrity. I think that de factoit puts more of it into welfare than that.
Catherine Murphy (Kildare North, Social Democrats)
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That relates to racing dogs, not the ones that are bred and do not make it, which makes up the bulk of them.
Catherine Murphy (Kildare North, Social Democrats)
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Mr. Gleeson referred to the economic impact study that was done by Jim Power. That would be very different from a value-for-money study. Is a separate value-for-money study being done specifically on greyhounds?
Mr. Brendan Gleeson:
I do not think it is on our list. We submitted a list of expenditure reviews that we have conducted. I do not think greyhounds were on it. There is a Government policy here that requires us to fund greyhound racing and horse racing. We would not have this requirement for funding if the sectors did not need it. If the judgment is based solely on economic value, I think the case is made, certainly in the context of the combination of these two things. They are significant contributors to employment creation and economic development in rural areas.
Do we understand the economic contribution these sectors are making? We do. We need to monitor it regularly.
Catherine Murphy (Kildare North, Social Democrats)
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For example, €97 million was provided to horse racing and greyhound racing. We are a sports mad country, and I am interested in sport myself, right across the spectrum. It was €157 million to Sport Ireland for all the other sports. A sum of €97 million is a large amount of money relative to other sports that have a big social value. I wanted to make that point. When we have events in the Aviva Stadium, Croke Park, Páirc Uí Chaoimh or wherever else, there is an economic benefit to them. It is useful to see where the value for money is across the sporting sector and where the money should go. That is a valid point to make.
Mr. Brendan Gleeson:
I am a GAA fan. That is probably a reasonable question. If I was a member of other sporting organisations, I would be doing the best I could to get State funding. This is Government policy. It is provided for in legislation. There is a good basis for it. There is a good economic return on this investment.
Catherine Murphy (Kildare North, Social Democrats)
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How many protected disclosures has the Department received, if any, in recent years? What has been the profile?
Brian Stanley (Laois-Offaly, Sinn Fein)
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I will revert to forestry. There was an underspend of €34 million on forestry in 2021 and that was attributed to the licensing process, the volume of appeals and so on. Has the implementation of the 2020 Act sped up the licensing process significantly? What is the processing time now?
Mr. Brendan Gleeson:
It has sped it up. Mr. Hayes gave statistics earlier. He stated we had 1,000 in the system at one stage and we are down to 24 or 25 now. It is important that we have an appeals system. People have a right to appeal but the previous system was being clogged up. As regards the waiting time, I said at the start of the Project Woodland process that the important issue is that people should know how long it will take to get a licence. That is far more important than whether we say we will do it in six months or eight months. It is important they know that if they apply, all things being equal they will get their licence within a fixed period, which we accurately identify.
Brian Stanley (Laois-Offaly, Sinn Fein)
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What period is the Department aiming for?
Brian Stanley (Laois-Offaly, Sinn Fein)
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What about a road licence?
Brian Stanley (Laois-Offaly, Sinn Fein)
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Six and eight months, respectively.
Brian Stanley (Laois-Offaly, Sinn Fein)
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What are the numbers in the system waiting?
Brian Stanley (Laois-Offaly, Sinn Fein)
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How many were there this time two years ago, the last time the Department was before the committee?
Brian Stanley (Laois-Offaly, Sinn Fein)
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The figure is less than one third of what it was.
What role does the Department have at senior level in the Gresham House deal? Did it get encouragement for that deal? Did it point Coillte in that direction?
Mr. Colm Hayes:
In overall terms, the Government policy is clear that the more the State fixes ambitious environmental targets, the stronger the case is for the State forestry company to involve itself. The most recent policy or direction is set down in the shareholder letter of expectation that was issued in June 2022.
Brian Stanley (Laois-Offaly, Sinn Fein)
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I know that. I am asking a different question. It is a specific and new venture to use the Irish Strategic Investment Fund, ISIF, to fund a company to involve itself in a significant way in the forestry sector. Until now, the State company, Coillte, and individual farmers were involved. What role did senior officials in the Department play in pointing Coillte in this direction?
Mr. Colm Hayes:
I will go back to the shareholder letter of expectation because it informs the instruction or direction from the shareholding Ministers or Departments to Coillte. It asks Coillte "to develop initiatives to support and realise the planting of such forests to a meaningful scale in the years ahead, whether as part of its core business or as a participant in a subsidiary or partnership enterprise". Coillte's responded to that through its strategy which outlined three broad ways in which it would achieve it. Those were partnership with other public bodies that are landowners, such as Bord na Móna; the establishment of a native woodland trust, which is a not-for-profit initiative to plant native woodlands; and the investment fund, which was the third activity it decided on. The Department did not give any specific direct instruction and did not have any specific view on how Coillte should do it. We trust the board of Coillte and ask it to deliver those-----
Brian Stanley (Laois-Offaly, Sinn Fein)
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There was an issue with state aid rules that stopped Coillte from doing it directly, as I understand it. That issue is not settled yet. From an answer the witnesses gave this morning, I understand the issue of state aid rules and funding of forestry is not yet settled at EU level. Was it not jumping the gun that this deal happened in the way it did? The public finds it unusual, as do I as a public representative, that the ISIF, which is public money, is now funding a project for an international investment fund, Gresham House. It will be competing with farmers. There will not be any competition because a farmer in Laois, Offaly, Leitrim or wherever else will simply not be able to compete as regards price per acre to buy land to plant.
Brian Stanley (Laois-Offaly, Sinn Fein)
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I understand that. I am asking a direct question. Why did this happen before the issue of state aid was fully ruled on at European level?
Brian Stanley (Laois-Offaly, Sinn Fein)
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That is correct.
Brian Stanley (Laois-Offaly, Sinn Fein)
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I am not saying this specifically about forestry, but other EU countries are better than we are at examining these matters, finding ways of dealing with them and working within the frameworks while keeping within European law and directives.
Brian Stanley (Laois-Offaly, Sinn Fein)
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They are more creative.
Brian Stanley (Laois-Offaly, Sinn Fein)
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As regards procurement etc., they are far more creative than we are.
Mr. Colm Hayes:
The basis on which we had to work to answer the question as to whether Coillte could receive premiums was that European case law was clear in stating that it could not receive them until this change in the state aid rules. They may or may not permit Coillte to do so now but we are answering that question as quickly as we can.
Brian Stanley (Laois-Offaly, Sinn Fein)
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Meanwhile this happens.
I want to know how this will work because it relates to public money. If Gresham House comes in and buys 100 ha in Cavan, for example, who plants the land? There were some answers given on this issue but I do not know how accurate they are. Who prepares the ground? Who drains it? Who puts in the roads? Who plants the land? Does Coillte do so?
Mr. Colm Hayes:
The fund is owned by the investors. The relationship with Coillte is that Coillte has a commercial contract with Gresham House to provide certain services, such as acquisition of the land or the management or planting of the forest in some cases. My understanding of how Coillte operates when it does any sort of planting at scale is that it often outsources that to the private forestry sector on a contract basis. It is very much on a case-by-case basis.
Brian Stanley (Laois-Offaly, Sinn Fein)
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I understand that Coillte does it. I know people working in the area who take contracts from Coillte. When the land is bought, it has to be developed, with roads, drainage and planting. Is Coillte doing that?
Brian Stanley (Laois-Offaly, Sinn Fein)
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Who pays for it?
Brian Stanley (Laois-Offaly, Sinn Fein)
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Who pays for it? Will Coillte pay for it?
Brian Stanley (Laois-Offaly, Sinn Fein)
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Is there a cost to Coillte, which is a public body?
Brian Stanley (Laois-Offaly, Sinn Fein)
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Obviously, when it is harvested, the ISIF will get money back. Is there a benefit to Coillte or the public purse in any other way out of that, however?
Brian Stanley (Laois-Offaly, Sinn Fein)
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There are figures available with regard to what is projected in the context of Gresham House. Who will own the carbon credits that will be assessed on each hectare of that land? Carbon credits are worth money.
Brian Stanley (Laois-Offaly, Sinn Fein)
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There could be, however. Bord na Móna is getting involved in carbon sequestration, for example. That is a good thing. It will be able to sell the benefits of that. It is turning it into a funding stream to the benefit of communities and the State. Who will own the carbon credits in the context of Coillte and Gresham House? It is clear that it will accrue economically. Who will benefit from that? Will it be Gresham House or the Irish public?
Brian Stanley (Laois-Offaly, Sinn Fein)
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I know that.
Mr. Brendan Gleeson:
Coillte does not do it. When we looked at our national targets, we said that Coillte has to get back in the game and supplement the private planting from other private landowners if we are to meet our targets. It looked at this as a way of attracting private investment into the forestry sector. It came up with this proposal. Many people did not like it. It was an imaginative way of combining loan funds from the Exchequer with private investment funds.
Brian Stanley (Laois-Offaly, Sinn Fein)
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I know all that. Coillte needed to get back into the game a decade ago. It is late coming back into it. I am asking a specific question. In the context of Gresham House coming in and purchasing land, the role of Coillte and the benefit or liabilities to the taxpayer, how will this work? Will there be a lien on the public purse? What happens with carbon credits? Anybody who says that carbon credits will not be worth money in 20 years' time is going around with a blindfold on. There is a big team here from Mr. Gleeson's Department and there are representatives of the Department of the Environment, Climate and Communications. As Cathaoirleach of the Committee of Public Accounts, I am asking who will have the carbon credits from these sites. Who will benefit from that?
Brian Stanley (Laois-Offaly, Sinn Fein)
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Overall, that is correct.
Brian Stanley (Laois-Offaly, Sinn Fein)
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That is true for all marketplaces.
Mr. Bill Callanan:
Ultimately, the marketplace in terms of compliance on carbon is driven by the Commission's emissions trading system, ETS, which covers big industry and so on. Specific policy in Europe, however, is to preclude the use of carbon generated in forestry or similar areas in that market. In effect, it is not available to trade carbon from forestry into the ETS market, which is where the high value is in terms of carbon currently. That is not the case globally. In New Zealand, for example, the current ETS provides for carbon associated with forestry to be offset into the ETS system. The policy in Europe is particularly focused to avoid a situation where it is possible to use forestry to offset emissions. It is a policy decision that has been taken in Europe to preclude that transferability. That means we will be required to report in respect of emissions because they are not in the ETS. We have LULUCF targets in that regard. It will not preclude a voluntary carbon market where somebody wants to show or claim carbon neutrality for reasons of corporate social responsibility, for example. We offer such an opportunity through the woodland environmental fund. It is not and cannot be done from a compliance perspective in any shape or form, however.
The other thing that is developing at European level is the effort to develop a carbon market. That work has been commenced in terms of how to structure a carbon market into the longer term. As Mr. Gleeson outlined at the beginning, that is post 2030. There are a couple of caveats in that regard, however. One is that it will consider emission removals but, importantly, there is an additionality element associated with it. In other words, a carbon value cannot be generated unless it is additional to the existing commitments within the state. The objective there is that a climate-neutral Europe 2050 will have residual emissions, such as from aviation, and there are two options in terms of offsetting, namely, carbon capture and storage or through land use. The EU is trying to create a policy environment that might support availability or additional finance into that land use market, but only if it is beyond the existing commitments in terms of national targets.
Brian Stanley (Laois-Offaly, Sinn Fein)
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There is the value of it. Are we going to meet our targets and commitments? That is the question. Are other countries going to do so? States that do not meet them can buy credits, as can companies. It can change. That is the point I am making.
Deputy Verona Murphy wishes to come in.
Verona Murphy (Wexford, Independent)
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The Department had 64 contracts with non-compliance issues in the context of procurement for 2021, to the value of €3.8 million. Has that been rectified?
Verona Murphy (Wexford, Independent)
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Has it been rectified?
Mr. Bill Callanan:
It is being rectified. We have a procurement unit in the Department to advise in that regard. On the most recent occasion we appeared before the committee, we had a problem with our laboratories. Laboratories are sometimes locked into procurement arrangements with suppliers of reagents and so on. We set up a specific procurement officer in the laboratories who has dramatically driven down the extent of non-compliance.
Verona Murphy (Wexford, Independent)
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Does Mr. Gleeson have a figure for 2022?
Verona Murphy (Wexford, Independent)
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Is the figure significantly reduced?
Mr. Brendan Gleeson:
I would expect it to be reduced. I will give an example of what can happen. People ask me how this happens. It may sometimes be that a particular procurement process is used because the expected expenditure is under a certain threshold. The offers that come in may then exceed that level. It is not that there has not been a competitive process. It is that it was the wrong competitive process for the price. That has happened on a number of occasions. One of the things we now have in place, as well as the issue I have already mentioned, is a training module. We have a specialised procurement unit. Someone is now handing me a note for the best of reasons. I am told that we sent the committee the Circular 40/02 return for 2022 in January. The committee has it but I do not have it in front of me. I apologise.
Verona Murphy (Wexford, Independent)
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We will check that. On what basis has the Department come to the conclusion that sheep farmers should not be included in the Brexit adjustment reserve, BAR, fund?
Mr. Brendan Gleeson:
The BAR fund is there to support sectors that were directly impacted by Brexit. In some instances, for example in the fisheries sector, it was crystal clear. I know the Deputy is close to that sector and she will know that fishers' quotas were reduced and there was an immediate hit to their income.
Verona Murphy (Wexford, Independent)
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As someone who drew lambs for 20 years, I am also fairly close to the sheep sector.
Mr. Brendan Gleeson:
The sheep sector gets support from a whole load of areas right across the Department. There are targeted supports under the rural development programme. Sheep people will be significant beneficiaries of supports such as the agri-climate rural environment scheme, ACRES, and the organic farming scheme.
Verona Murphy (Wexford, Independent)
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Is Mr. Gleeson telling me that because sheep farmers are supported under other schemes, and despite being affected by Brexit, they are not eligible for the BAR?
Verona Murphy (Wexford, Independent)
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It is not difficult to make that argument if one is a sheep farmer. The reduction that sheep farmers are looking at based on the flooding of markets, particularly when sterling weakened, would have seen them receive approximately €50 less per head in some instances.
Verona Murphy (Wexford, Independent)
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That is not the point. Mr. Gleeson is probably right in that but the point is that sheep from the UK flooded the market on which we are dependent, that is, the French market, at a time when sterling weakened, thereby devaluing our lamb. That is the issue. It is not that we are dependent on the UK market. I can see that. I am a farmer's daughter. I drew sheep for 20 years as a haulier. I am very close to the sheep sector and sheep farmers are very aggrieved. Mr. Gleeson understands what I have said. Does he disagree?
Verona Murphy (Wexford, Independent)
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Is that a "Yes" or a "No"?
Verona Murphy (Wexford, Independent)
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Would Mr. Gleeson consider a review for that sector? No matter what we do, it is a dwindling sector. I understand it is only worth €500 million in the economy but it provides a significant livelihood for many farmers. We are in a position where we are importing lambs, legitimately, it appears, to slaughter in our factories. I understand the commercial reality and there are times of the year when we do not have enough stock of our own and we have to import in order to safeguard jobs. People have a difficulty with that because in their minds it is competition but the reality is that we often do not have the stock. For the survival of our own sector, I am asking Mr. Gleeson if he would consider a review. I am not asking about the outcome. I am asking him to review the exclusion of sheep farmers on the basis of the case I have put to him. We are not dependent on English markets and never have been. However, the English lamb sector interfered with the markets on which we are dependent, that is, the French and Belgian markets. Will Mr. Gleeson consider reviewing the eligibility of sheep farmers to access the BAR on that basis?
Verona Murphy (Wexford, Independent)
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No, I am only asking-----
Mr. Brendan Gleeson:
-----and plunge the Minister into some kind of a commitment that I have made on his behalf. I am not going to do that. However, I can say it is really about determining what expenditures we undertake at the moment could potentially be eligible for the BAR. That is what we have to do.
Verona Murphy (Wexford, Independent)
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Is that a "No"? Do I need to ask the Minister?
Verona Murphy (Wexford, Independent)
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Do I need to ask the Minister?
Verona Murphy (Wexford, Independent)
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I have a quick but important question about the trade control and expert system, TRACES. Has the Department undertaken any reviews into its operation since Brexit occurred and the inception of TRACES?
Verona Murphy (Wexford, Independent)
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I am absolutely not.
Verona Murphy (Wexford, Independent)
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I will give Dr. Fanning the basis of my question. There seems to be an awful lot of friction in particular areas between Revenue and the Department of Agriculture, Food and the Marine when it comes to recognising who should be inspecting goods. There does not seem to be a lot of communication between them, and I am blaming nobody for that, but the consequence is time delay, which costs money and ultimately results in an added cost to the consumer. It also affects small indigenous haulage operations. It is probably now time to do a review and involve the stakeholders because Revenue, since its representatives were most recently before the committee, has conducted a review. It has involved the stakeholders. It knows where the significant time delays are. It is important for the Department of Agriculture, Food and the Marine to undertake the same process to ensure we are not on any anti-competitive footing, given Brexit and how it has affected us. If I had the option, I would have a free port in Rosslare. That would curb all delays but it does not curb TRACES. We need to look at it from the perspective that it has been inflicted on us and we need to support our indigenous industries.
Verona Murphy (Wexford, Independent)
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I do not disagree and I am not looking to admonish anybody. There are complaints, all the same.
Verona Murphy (Wexford, Independent)
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A superb facility has been built in Rosslare and it is under-utilised. I wish the Office of Public Works, OPW, would consider it for parking but that is another day's work and nothing to do with our witnesses.
Brian Stanley (Laois-Offaly, Sinn Fein)
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I would not be an expert on any area of Brexit. However, the general feeling on the ground is that there was enormous anxiety and worry across the transport and farming sectors in respect of food safety and all of that. I acknowledge that the Department seems to have done a good job. It was in uncertain territory. When one is dealing with people who change their minds even after they have negotiated something, it could have gone very differently. The State, agriculture and especially the agrifood sector could have been badly hit. Mr. Gleeson has a better overview than I have but it has taken up a huge amount of the time and resources of the Department over the past six years to try to manage and corral the fallout, and try to ensure the pieces of the jigsaw fit in. I acknowledge that. That is the message I am hearing. We always tell people what is wrong. People come to us when they see problems. Over the past year or so, things seem to be bedding in.
Mr. Brendan Gleeson:
I thank the Chairman for saying that because I know it will mean a lot to people who have put in tremendous effort in recent years. We now have an extra 250 people at ports and airports who are doing things we never did before. All kinds of infrastructure have been built, as Deputy Verona Murphy mentioned. It has been a monumental task. It is not over yet because until now, the UK has not applied any controls on the way into the UK. There have been three false dawns in that regard and we have worked closely with sectors to tell them what is required and to warn them there will be new friction in trade with Great Britain. Three times, the UK has pulled the plug and decided not to proceed with controls.
It has now published the new certification rules and we are trying to evaluate them at the moment. They are to apply from October. My understanding is that from October, the UK will not be checking certificates on the way in but from April next year, it will start doing checks on Irish produce coming in. We are working through the UK proposals at the moment.
Brian Stanley (Laois-Offaly, Sinn Fein)
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What happens in Belfast and Larne in regard to food safety and animal health? How is that panning out? That is always the question. There was an attempt to stop any posts being erected or checks taking place. Staff were ordered away from the ports. All sorts of game-playing was going on. Are there any implications now or is it working satisfactorily?
Mr. Brendan Gleeson:
It is funny, but there was a briefing yesterday on the Windsor Framework agreement, which I missed because I was trying to read over some of this stuff. However, I did ask our main man in that area what was the net impact of Windsor House and, for the present, it is none. We have to rely on the Northern Irish authorities doing their job correctly. Any other assumption would have all kinds of implications that none of us want.
Brian Stanley (Laois-Offaly, Sinn Fein)
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Is there a high level of co-operation there? If we go back to the incidence of foot-and-mouth disease, the 32-county approach saved the country. I remember the outbreak as a child in the late 1960s when we had to put our feet into a bath of water with disinfectant. We have the advantage of being an island and everyone gets the logic of having the checks at the ports, bar anyone who does not want to get it. That is where it has to happen. Can we satisfy ourselves that the checks that are happening this week will protect this State in terms of food safety and animal health? There is movement back and forwards across the Border, rightly so. Effectively, it is a single economy now – an all-Ireland economy. Are the checks effective enough?
Mr. Brendan Gleeson:
The first part of the question was whether there is co-operation. We have really close co-operation with the people in the Department for Environment, Food & Rural Affairs, DEFRA, in London, and the Department of Agriculture, Environment and Rural Affairs, DAERA, in London and in Northern Ireland. We have regular meetings with them. We talk through all the controls with them and we try to iron out any practical issues that we see arising from their proposals. We do not have any say in what they propose, but we certainly engage with them in detail.
In the context of Northern Ireland, there is the Windsor Framework now which provides certain dispensations for product going into Northern Ireland and not going beyond that. Rules will be agreed with the European Union about what those controls are to be and they have to be applied. We must have confidence that the Northern Irish authorities will apply them because if we did not have confidence in that, for example, there could be all kinds of other consequences that flow from that. They have agreed a framework. They are professional people.
Brian Stanley (Laois-Offaly, Sinn Fein)
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One of the big consequences is that this State is part of the Single Market and it would put all of that in jeopardy.
Mr. Brendan Gleeson:
Yes, that is one consequence but the consequences could be worse if we did not have a protocol or the Windsor Framework. I do not believe the position of this State in the Single Market is under threat at all because we now have a framework of agreement which determines with clarity what the Northern Irish authorities are supposed to do and what we are supposed to do. In the same way as we rely on competent authorities in every member state to do their job, we must rely on the competent authorities in Northern Ireland to do their job. We have regular contact with them. I would say the relationship is very good.
Brian Stanley (Laois-Offaly, Sinn Fein)
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It is good to hear that because obviously with the fact that there is no government in the North we are relying on officials. As there is no political oversight, there is a bit of anxiety around that.
Verona Murphy (Wexford, Independent)
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There has been a huge impact on small indigenous sectors which have had to comply with the effect of Brexit, while our counterparts, who effectively caused the problem, have got away scot-free to date. Regulatory authorities and organisations must understand that and be somewhat sympathetic when it comes to the suffering of our indigenous sectors. I refer to agriculture, fisheries and haulage, which have gone through huge change, and that continues. They are all sectors involving small family businesses which cannot afford it. I know there have been supports but they have not been significant enough from the mental aspect, never mind anything else, to deal with the changes that we have had to endure. There are huge costs attached even to circumnavigating the UK to get to the EU. The land bridge is effectively gone because of what it entails in delays in paperwork, traces and all of that, but if we go direct, it is double the cost. Brexit has had a massive impact.
Brian Stanley (Laois-Offaly, Sinn Fein)
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I suppose we could say that Britain's loss is Wexford's gain in terms of Rosslare.
Verona Murphy (Wexford, Independent)
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Not according to our Government.
Brian Stanley (Laois-Offaly, Sinn Fein)
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We have given the issues a good thrash around. I thank the witnesses and staff from the Department of Agriculture, Food and the Marine, the Department of the Environment, Climate and Communications and the representative from the Department of Public Expenditure, National Development Plan Delivery and Reform for their work in preparation for this morning's meeting. The discussion this morning has been broad-ranging and a lot of answers were given.
I also thank the Comptroller and Auditor General, Mr. McCarthy and Mr. Southern, and their staff for assisting the committee today. Is it agreed that the clerk will seek any follow-up information and carry out any agreed actions arising from this morning's meeting? Agreed. Is it also agreed that we note and publish the opening statements and briefing statements for today’s meeting? Agreed.
I will suspend the meeting until 1.30 p.m. when we will resume in public session to address correspondence and any other business.