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

The agrifood sector is playing a considerable role in our economic recovery. The sector remains Ireland’s largest indigenous industry and accounts for almost one in nine jobs, mainly in rural and coastal areas where few other employment opportunities exist.

Bord Bia recently confirmed a fifth consecutive year of growth in agrifood exports. The value of Ireland’s food and drink exports grew by some 4% during 2014 and reached almost €10.5 billion, which is another all-time high. This is some €3.2 billion higher than in 2009, an increase of over 45%. In this context I was pleased to secure an increase of almost €42 million in Exchequer funding compared to 2014 to invest in the agrifood sector. The Exchequer contribution to the Vote of my Department will amount to €1,260 million in 2015. This figure is made up of €1,044 million in current expenditure and €216 million in capital spending. This is the first in a series of six budgets where the Exchequer contribution to the agriculture Vote will be increased in order to facilitate the implementation of both the rural development programme, RDP, and the European Maritime and Fisheries Fund, EMFF.

The second element to the financing of the sector for this year and the coming years concerns taxation. Following on from the publication of the agri-taxation review, the Minister for Finance announced, in his 2015 Budget Statement, a suite of taxation measures which are intended to assist in the modernisation of farming, provide for increased land mobility, assist succession and broaden the period over which income averaging relief may be claimed.

These measures are timely and will support the continued development of the sector and our aims under Food Harvest 2020.

In addition to allocated Exchequer funding, Ireland will also receive €1.215 billion in direct funding from the EU for the basic payment scheme, or €7.2 billion over the lifetime of the CAP agreement 2014 to 2019. Furthermore, the rural development programme will deliver an additional €4 billion of EU and national funding in the period up to 2020. My overarching priority for 2015 is to deliver the first part of the Government's commitments to the farming and fishing sectors in the commencement of actions under the new rural development and seafood development programmes. These supports will support the incomes of family farms and prioritise vulnerable sectors, particularly those areas of natural constraints to which I have allocated €195 million in 2015; that is formerly DAS. The rural development programme, or RDP, will be a key support in enhancing the competitiveness of the agrifood sector, achieving more sustainable management of natural resources and ensuring a more balanced development of rural areas. We are awaiting formal approval of the programme from the Commission. In the meantime, I have secured Exchequer funding of €439 million for capital and current expenditure on RDP schemes.

One of the most significant elements of the rural development programme is the continued commitment to agri-environment schemes. In 2015, approximately €120 million is being provided, €52 million of which is effectively to close out REPS, while €70 million will be paid out under AEOS. Almost 17,000 and 15,000 farmers respectively will receive payments under these schemes. I was pleased to launch last week the new green low carbon agri-environment scheme, or GLAS as people now know it. GLAS is intended to build on the success of the earlier programmes and encourage farmers to farm in an environmentally sustainable manner. GLAS will be a five year scheme with a maximum payment of €5,000 per annum, with the potential to qualify for a top-up payment of up to €2,000 per annum. Funding in 2015 provides for the opening of the scheme to some 30,000 entrants and for part-year payments to be made. When fully open, the scheme will support up to 50,000 farmers and require funding of €250 million per year.

A strong and focused on-farm investment scheme remains a priority and in 2015 this will be delivered through TAMS 2, which is the second generation targeted agricultural modernisation scheme. For 2015, I am allocating some €34 million to TAMS, which represents a 100% increase on last year's budget. This will provide for final payments on TAMS 1 as well as a new farm safety scheme for which I am providing once-off funding of €12 million. Tragedy struck too many Irish farm families in 2014. Conscious of the loss of life and injuries sustained on farms in recent years, particularly during 2014, I opened the farm safety scheme in October of last year. The grant rate is 40% up to a maximum eligible investment ceiling of €20,000; that is, the maximum grant is €8,000. Almost 6,300 grant applications have been received in my Department. Over 4,000 of these are already processed and approvals are being issued on a continual basis.

This year is set to be an extraordinary one for the dairy sector. The ending of the milk quota regime next month will free Irish farmers from the shackles of quota. With opportunity, however, comes a requirement for investment. My Department will be inviting applications to avail of grant funding for capital investments in 2015, including a new dairy equipment scheme to support the sector in its expansion plans. As with the beef sector, I am proposing the establishment of discussion groups for the dairy sector in 2015 as part of the rural development programme. Payments under the programme will not be made until 2016, however. The plan is for 5,000 entrants to dairy discussion groups next year. This will serve as an essential learning experience in the post-quota environment.

Ireland is the largest net exporter of beef in the northern hemisphere and this is testament to the efforts of all stakeholders in this vital sector. As a consequence of the importance my Department places on the beef industry, coupled with an acknowledgement of the difficult year experienced in 2014, I have again given particular priority to providing the kind of support that can contribute to restoring confidence to this sector. I am pleased that we were in a position to fund support measures worth in excess of €73 million in 2015. The cornerstone of this support package is a significant increase in the funding allocated to the new beef data and genomics programme, BDGP, from €23 million to €52 million. This 126% increase will place Ireland to the international forefront of genetic improvements in beef and will make an important contribution to improving the carbon efficiency of Irish production. As I announced on budget day, my intention is to have a two-tier payment under the BDGP, that is, €100 for the first ten animals on the farm and €80 thereafter. Obviously these payments are subject to the agreement of the European Commission in the context of the overall scheme and discussions on these issues are ongoing. The payment levels are also of course subject to the overall budget limit of the scheme.

A sum of €9 million will also be paid to approximately 36,000 farmers under the beef data programme, BDP. This programme assists farmers in improving the genetic quality of their livestock while maintaining a flow of crucial data to the Irish Cattle Breeding Federation that will generate further advances in cattle breeding at national level. The estimate also includes provision of €1.6 million for the Irish Cattle Breeding Federation to support continued breed improvement in the beef and dairy sectors and €0.5 million is being provided to compensate for the removal of persistently infected calves under the BVD compensation scheme. I have also allocated an additional €1 million to Bord Bia for the marketing of beef given the challenges that we had last year. The ongoing development of the knowledge base in the sector will continue to be supported. The beef technology adoption programme, BTAP, has been an outstanding success and a further €1 million is provided for such payments in 2015. The new knowledge transfer measure for the beef sector, provided in the RDP, will also open to farmers next year and I expect payments to be made under that programme in 2016.

The sheep sector continues to experience challenges. Consequently, I am providing funding for a continuation of the sheep technology adoption programme, STAP, into a third year. This programme provides for the establishment of discussion groups among sheep farmers, similar to the model used for other groups. Funding of €4 million is provided for the programme in 2015. The number of producers participating and the positive feedback from participants attests to the success of the programme to date. I have also announced, as part of the RDP, that the STAP structure will become a knowledge transfer group for sheep from 2016 onwards with an expected 4,000 participants starting that year. I am also maintaining the provision of some €540,000 for the improvement of breeding in the sheep sector through Sheep Ireland.

TAMS II funding will also be made available for the pig and poultry sectors reflecting the need for investment in these sectors. I am also prioritising innovation as part of the smart agenda through a substantial fund for research, development and training amounting to €28 million under the FIRM, Stimulus and Forestry Funds and Teagasc training courses. I will also be maintaining our focus on food safety and animal health and welfare with a provision of some €82 million overall. Our justifiable reputation for food safety and quality standards has led to the opening of both the American and the Chinese markets to Irish beef in recent months, which is a really good practical example of why high food safety standards are so important. In addition to the specific allocations already mentioned, I have provided €144 million to fund Teagasc and Bord Bia in 2015. These agencies have central roles to play in improving the profitability of the beef sector across the range of their activities.

Taking account of the fact that the Irish bloodstock industry is of enormous economic benefit to this country, I have increased State support to the horse and greyhound industry by €14 million to €68 million.

It has been estimated that the industry provides in excess of 14,000 jobs, approximately €1.1 billion in economic output and is responsible for exports worth in excess of €200 million. That represents money that is pretty well spent.

The greyhound industry employs more than 10,000 people. Since 2002, in excess of more than 10 million people have attended greyhound racing meetings. The industry contributes some €500 million in economic output to local economies around the tracks which have a wide geographical spread. The increase in State support to both industries is in recognition of the significant shortfall in funding going into the horse and greyhound sectors in recent years as a result of the downturn in the economy. With the introduction of the online betting tax, the Government will provide an additional €6 million a year to the horse and greyhound fund.

I am anxious to unlock the significant potential of the marine sector for export growth and employment. I will shortly be launching Ireland’s new seafood development programme for the period up to 2020. Following months of intense lobbying and negotiation, I secured a contribution of €148 million to Ireland’s programme from the new European Maritime and Fisheries Fund, EMFF, for the period 2014 to 2020. It is worth noting that in the previous seven years the figure was €70 million. Therefore, the contribution secured represents more than a doubling of that fund. Together with matching Exchequer funding, this will enable me to launch a €241 million EMFF programme in 2015.

The majority of funding under the new seafood development programme will be focused on the further sustainable development and growth of our seafood industry. Some €142 million of the total fund will be available for this sectoral development, which is more than twice the €66 million available under the previous programme for that same purpose.

The new EMFF programme will also directly fund €46 million in new investments to support our capacity to enforce the Common Fisheries Policy and ensure a level playing field for all fishermen. In addition, €41 million will be provided to improve the science that supports our fisheries management, together with €11 million for implementation of the new EU Integrated Maritime Policy and €1.3 million for storage aid supports.

I am making available €15 million in 2015 to commence investment measures under the new seafood development programme and this will rise significantly in following years as the programme is rolled out. Separately, I am also making available approximately €9 million in 2015 to complete the final year of the current seafood development programme. I have also allocated some €11.5 million of capital expenditure to be invested in fishery harbour works.

Having experienced the positive outcome of the agri-taxation review, my colleague the Minister for Finance and I proposed a similar exercise for the marine sector. Under the Harnessing Our Ocean Wealth strategy, the Government has set a target of doubling the value of Ireland’s blue economy by 2030 and I am keen to ensure there is a supportive financial environment underpinning this target. A working group, led by the Department of Finance and consisting of my Department, the Department of Transport, Tourism and Sport and the Department of Jobs, Enterprise and Innovation will oversee the review and I will liaise with other Government Departments and agencies, including with the Marine Co-ordination Group.

The forestry sector receives the largest share of the public capital programme expenditure of my Department and I have provided some €110 million for this purpose in 2015. The Government recently approved a new forestry programme up to 2020, the objective of which is to support the planting of over 43,000 hectares of new forests. The measures to which I have referred today demonstrate the Government's commitment to the agriculture, marine and forestry sectors. We are now in a position to implement actions under the new rural development and seafood development programmes, which, I hope, will leave a lasting legacy in these sectors, and make a significant contribution to the further development of these important pillars of Irish society and, in particular, to the rural and regional economies.

I will happily answer any question members may have. I apologise for the length of the presentation but there is a good deal happening.