Simon Coveney (Cork South Central, Fine Gael) | Oireachtas source

It is not finalised. One of the differences between this year and last year is that last year we had two meetings while we only have one this year. It was in this meeting last year that the Deputy asked for more information and we got that for him and that was the basis of the second meeting. Perhaps that explains it, but I assure the committee there is no attempt to try to evade questions. We will give the committee any information we have and that it seeks. I cannot give the committee the budget because we have not finalised it yet. Some of the questions the Deputies asked are relevant, however, and I will go through some of them.

The first question relates to the rural development programme for next year. It is true that in the new Common Agricultural Policy, which starts from next year in terms of the multi-annual financial framework, Europe's contribution to Pillar 2 money will be €313 million as opposed to just under €350 million, representing a reduction. This does not necessarily mean that the amount of money spent on farmers in the rural development programme reduces because the co-funding rates are different for different schemes. We have an option of 85% co-funding for several schemes because we are a bailout country at the moment. In the new CAP we will have a 75% co-funding option for environmental schemes, whereas it will be a 53% co-funding option for many of the other schemes. The co-funding rates will determine the amount of money. The Deputy rightly said that what farmers want to know is not the split between Europe and Ireland. They simply want to know how much money they are getting and whether they will get more or less next year.

The expenditure profile for current and capital expenditure is set on the basis of the amount of money that is being spent by the Department. It comes from Europe and from the Exchequer for rural development funding. The expenditure profiles will be set by the Department of Public Expenditure and Reform. We are trying to maintain the actual spend at as high a figure as we can. Obviously, that will impact on the co-funding elements of the decisions. From a finance point of view, in terms of the accounting, some people are keen for us to prioritise spending on rural development that is linked to 85% co-funding. This would mean the Exchequer would make a minimum contribution, but farmers would suffer then. My job is to ensure I represent the farming view and that we try to spend as much money as we can throughout rural Ireland and support the agrifood sector. That is an ongoing debate, but just because there is a reduction in terms of the European contribution does not necessarily mean that next year there will be a significant reduction in rural development. Certainly, over the full period, it means there will be less money spent from a European Union point of view on the overall rural development programme over seven years, but that is a different discussion.

There was a time when Ireland had a good deal of money to spend and we were spending plenty of extra money on top of the rural development fund, well beyond what we had to provide to draw down EU funds, and we could afford to do that at the time. Much of the rural development debate will be around the co-funding levels and the Exchequer contribution in terms of the overall spend. It is an entirely different thing in terms of direct payments because they are set. There is a 3% reduction and that is it. It is €1.2 billion under the new CAP.

Many farmers are coming out of the rural environment protection scheme this year and that is creating natural savings. In some ways it means that fewer cuts on top of that will be required to meet the savings we must realise. This means, I hope, we will not have to reduce the disadvantaged areas payments this year if we can avoid it, because savings have been made in the past two years. If some of the gap in what we have to save can be filled by the natural savings from people coming out of REPS, then we will make some savings there. However, if they are coming out of the REPS, farmers will ask why the Department does not introduce a new agri-environment options scheme, AEOS, to allow them to get some new revenue streams under an environmental scheme. I made one choice in advance of the budget. It does not make sense to introduce a temporary AEOS next year. Last year and the year before, we introduced new schemes for farmers who were primarily coming out of REPS. We prioritised farmers who were coming out of REPS.

If we were to introduce the same next year we would be introducing an AEOS scheme for which farmers would apply by the end of May. They would not get payments on those AEOS schemes until December at the earliest and probably January, by which time there would be a new CAP rural development scheme starting with, hopefully, quite a comprehensive environmental scheme package. Farmers currently in AEOS schemes may be switching into that new scheme. The idea of introducing an entirely new AEOS scheme this year for a five- or six-month period and paying out when a new scheme is kicking in does not make sense. Most farmers probably agree that it does not make much sense. If there are savings to be made from REPS, we do not have to be as proactive in terms of finding savings and cuts in other areas. The combination of the savings we are being asked to make at the moment from the Department of Public Expenditure and Reform on capital and current expenditure is a higher figure than the savings we are making from REPS next year. There is still a gap to be filled unless we can renegotiate some of those figures, particularly on the capital side.