Michael Creed (Cork North West, Fine Gael) | Oireachtas source

I appreciate the opportunity to present this request for a technical Supplementary Estimate for 2018 in which I am seeking the committee's approval to use savings on the Department's Vote to fund other desired expenditure and for approval for additional funds to support the agri-environment schemes and the fodder schemes.

As these proposed transfers and expenditure involve significant changes to the original 2018 voted allocations, I believe that it is important to seek the committee's input and approval. Specifically, this technical Supplementary Estimate will transfer €15 million of savings in certain areas of the Vote to the World Food Programme, WFP, to support its humanitarian work across the world. I am also requesting the committee's approval for funding of a further €23 million for the agri-environmental schemes to ensure that there is sufficient funding available to pay a higher advance payment of 85% funding to all farmers who establish their eligibility under these schemes. Finally, a provision for a further €7 million is requested for provision of payment under the various fodder schemes implemented to assist farmers during the fodder difficulties.

The €15 million current funds required for the WFP would be transferred from various subheads where due to changed circumstances, savings have emerged, most notably in the administrative budget pay subhead, control and other support scheme costs, research, quality and certification, development and promotion of agriculture and food, other services and Bord Iascaigh Mhara. There is a total figure of €3.6 million under the payroll underspend. The saving arises from a lower than estimated pay bill due to recruitment of additional and replacement staff not proceeding as quickly as planned. Also as a result of a large turnover of staff due mainly to career opportunities for staff across the civil and public services, short-term gaps can arise that in turn give rise to savings in the payroll budget.

There is a saving of €2.3 million under the subheading control and other support scheme costs. This has been identified as a result of non-requirement to draw down funds that are set aside as a prudent reserve in case of financial sanctions in our clearance of accounts procedures. There is a saving of €1.4 million under the subheading of other services. This has arisen due to savings in our legal expenses in 2018. There is a saving of €1.7 million under the subheading of research, quality and certification.

The 2018 provision was primarily required to meet funding commitments arising from expenditure incurred on previously awarded projects and for new commitments and advances on Call 2017. Expenditure in 2018 is likely to be some €2 million below the original estimate of €18.6 million. It is hoped, however, that will be a greater response to future calls for further research projects as existing projects come to fruition and are replaced and in order to maintain the constant level of research activity needed to underpin the sector.

There is a saving of €3.6 million under the subheading of development and promotion of agriculture and food - non-farm. The savings are arising as there has been a lower than projected spend on lean reviews by food companies as a result of a lower than expected project completion rate in 2018 from what was initially forecast. It is understood that companies are re-examining projects in light of Brexit. In addition, the artisan food and small producer schemes have a lower than expected number of approvals that require payment in arrears. It is expected that these commitments will be drawn down in 2019.

There has been a saving of €2.4 million under the subheading of Bord Iascaigh Mhara, BIM. BIM has been assisting seafood industry members to get Brexit ready. Industry demand for Brexit assistance via grant schemes is difficult to apportion as the services provided are available in a number of individual sector schemes. These are demand-led schemes that have resulted in a lower than expected outturn compared to what was forecast in 2018, which has resulted in a savings of €2.4 million.

Overall, these current expenditure savings amount to some €15 million. With the committee's approval, this will be transferred to fund the WFP. This additional €15 million provided for WFP in this Supplementary Estimate represents an advance payment of next year's commitment under Ireland's strategic partnership agreement with the WFP. This earlier disbursement is at the request of the WFP's executive director who has written to inform me that this funding will significantly contribute to enhancing the WFP's capability to plan its interventions and better address the several growing humanitarian crises around the world.

The 2018 budgetary allocations for current expenditure under the agri-environmental schemes is €232.8 million. The expenditure projections were based on paying schemes at the 75% advance rate set out in the EU regulatory framework. However, due to the difficult circumstances farmers were finding themselves in, in particular the fodder shortage and the unprecedented weather, I made a request to the European Commission for approval for Ireland to pay higher advance payments of 85% for Pillar II rural development schemes, which is allowed under EU regulations in exceptional circumstances. The additional €23 million sought in this Supplementary Estimate will facilitate this higher payment to farmers, in particular GLAS and the organic farming scheme, and will bring the total spend under agri-environmental schemes to €256 million in 2018. I urge all participants in receipt of correspondence from the Department to submit required documentation to enable issuing of their advance payment in 2018.

In early 2018, I introduced the fodder transport scheme and a fodder import measure. In response to the deteriorating weather conditions and fodder shortages experienced in the sector in recent months, the Department put in place a range of support measures to address the situation. The fodder incentive production scheme was introduced in autumn 2018 with an allocation €2.75 million. This measure provided an incentive of €155 per hectare for tillage growers to grow a temporary crop of short rotation grasses for fodder production over the winter months and €100 per hectare for those growing catch crops. It is expected that somewhere between €1.5 million and €1.8 million will be paid before year end. The fodder import scheme, which was also introduced in autumn 2018 has an original allocation €4.25 million. This measure was introduced to contribute to the transport costs of imported forage, including hay, silage, haylage and alfalfa, from outside the island of Ireland. The closing date of the scheme is 31 December 2018. Importers are currently submitting their applications to allow payment to issue. At this stage, as it is a demand-led scheme, it is difficult to estimate the level of expenditure in this scheme for 2018. It is not expected that the full €4.25 million will be drawn down in 2018. The additional €7 million sought in this Supplementary Estimate will facilitate these payments.

The original allocation in 2018 to the Brexit response loan scheme of €25 million was current funding, as was the allocation for earlier loan schemes. However, due to a technical decision by the Department of Public Expenditure and Reform, the allocation now needs to be reclassified and paid as capital expenditure. No extra expenditure above what was originally provided for in 2018 is involved.

The Department's appropriations-in-aid have been substantially greater in 2018 than provided for in the 2018 Revised Estimates. We seek to offset our additional requests against these receipts. These payments are from the European Commission and are the EU funding component for our co-funded rural development programme schemes, including areas of natural constraints scheme, GLAS, TAMS and the beef data and genomics programme. These are paid in arrears by the Commission, usually on a quarterly basis. The additional receipts reflect the late arrival of a payment in respect of the third quarter of 2017, which was expected to be received by the Department in December 2017 but was not received until early January 2018.

This is a technical Supplementary Estimate. The savings I have outlined will be used to fund the World Food Programme and agri-environmental schemes, in particular GLAS and the fodder schemes. I earnestly recommend the Supplementary Estimate to the committee for support. I am happy to respond to any questions that members may have.