Oireachtas Joint and Select Committees

Tuesday, 2 July 2013

Select Committee on Agriculture, Food and the Marine

Estimates for Public Services 2013
Vote 30 - Agriculture, Food and the Marine (Revised)

2:00 pm

Photo of Andrew DoyleAndrew Doyle (Wicklow, Fine Gael)
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I welcome the Minister for Agriculture, Food and the Marine, Deputy Simon Coveney, and his officials. We are meeting to consider the Estimates for Public Services 2013, Vote 30 - Agriculture, Food and the Marine (Revised). The 2013 Revised Estimate was presented to the Dáil in the new programme-based format. This means that the Estimate, as presented, contains the information for each programme on how it is proposed that the money allocated to that programme is to be expended and the previous year's outturn in each case; the numbers of staff assigned to work connected with the programme and how this compares with the previous year; performance-related information; departmental outputs, with corresponding information for the previous year; termed performance and impact indicators, with the previous year's information; the impact, if any, and the value for money of administrative expenditure.

The Revised Estimate gives the committee an opportunity to review whether the targets set and the distribution across the Vote for 2013 is appropriate in all circumstances and can demonstrate the best use of resources. It also gives the committee an opportunity to explore issues facing the Minister with regard to the 2014 allocation for his Department.

A proposed timetable for the consideration of the Revised Estimate has been circulated to Members. It allows for a brief opening statement by the Minister, followed by a discussion of the 2013 Revised Estimate.

I propose that when the Minister has concluded his remarks, we will take questions on each individual programme. The format will be that we will take questions from each member and then an immediate reply from the Minister. We will commence with programme A and then move through the various other programmes in turn. Members should be as succinct as possible in asking their questions in order that we might adhere to the timetable. I call the Minister to make his opening statement.

2:05 pm

Photo of Simon CoveneySimon Coveney (Minister, Department of Agriculture, the Marine and Food; Cork South Central, Fine Gael)
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I thank the Chair and I take this opportunity to wish him a happy birthday.

I am pleased to present the 2013 Revised Estimate for my Department to the committee. Before we consider my Department, I wish to say a few words on the EU Presidency, the outcome of which is very important to Irish agriculture. We began the Irish Presidency of the EU in January last with ambitious and challenging objectives, namely, to deliver by the end of our Presidency a political agreement between the three EU institutions on reform of the Common Agricultural Policy, CAP, and the Common Fisheries Policy, CFP. I am very pleased that we have achieved both objectives. The agreement reached last week marks an historic moment in the evolution of CAP. This is the first occasion on which a major reform of CAP has been secured with the involvement of the European Parliament and the 27 - now 28 - member states. The agreement was linked to the parallel negotiations taking place on the multi-annual financial framework, MFF, for the next EU budget from 2014 to 2020.

Under the MFF agreement, the expenditure ceiling for heading 2 - CAP - was set at €373 billion. While this represents a reduction of just over €14 billion in comparison with the Commission's original proposal, heading 2 has been protected to a far greater extent than other headings. A decision was taken that direct payments will be more equitably distributed between member states. As a result, all members states whose level of direct payments is currently below 90% of the EU average will see one third of this gap closed by 2020. The method of calculation used in this exercise, which was initially proposed by Ireland and which uses eligible area as the comparator, has largely protected this country's share of direct payments funding. I will be returning to discuss the CAP with the committee in a few weeks so I will not spend much time outlining the detail involved. I have a speaking note in which the main elements of the reform of the CAP are outlined and I can circulate it to members. This matter is relevant to this year's Estimates, particularly in the context of the budgetary negotiations that have taken place at European level.

I will now deal with some of the detail relating to the 2013 Estimate for my Department. This year, the Department's Vote is again being presented on a strategic programme basis consistent with the high level goals set out in its statements of strategy. We are all very much aware that the general economic situation and the position relating to the public finances require the continuation of tight budgetary discipline. None the less, with the resources available to me I am determined to build on the progress achieved in recent years in developing the agrifood sector and, in particular, to contributing further to the future growth and prosperity the sector can achieve for Ireland, primarily through the expansion of its revenue base through growth in export earnings.

The Exchequer contribution to the Vote of my Department in 2013 is just under £1.242 billion. This includes a sum of €6 million capital savings carried over from 2012. While this represents a reduction on the 2012 outturn of €1.318 billion, I have managed to fund new schemes and programmes and secure savings in 2013. The 2013 budget reflects a significant Exchequer commitment of support for the agrifood sector and is a recognition of the contribution which the sector is making to economic recovery and future growth. The €1.24 billion expenditure in the Department's Vote comprises some €1.049 billion in current expenditure and €193 million capital expenditure. The downward budgetary movement of €76 million between the 2012 outturn and 2013 Estimate reflects lower budget requirements for a number of measures, including that which relates to public sector pay.

Considering the overall limit on resources, I was obliged to make difficult decisions and choices in the context of making prudent provision for essential areas, meeting maturing liabilities for grants approved in previous years and introducing reductions in expenditure in order that we might remain within the expenditure ceiling for the year. The 2013 budget for the Department is, however, consistent with last year's in terms of priorities. I refer here to the protection of incomes for family farms, support for small farm holdings in disadvantaged areas, providing support programmes in line with the targets of Food Harvest 2020 - in particular job creation - supporting the future of the sector through new research and development funding and investment in food safety and animal health and welfare controls, and an ongoing programme of reform within the Department aimed at continued improvement in service delivery and reducing costs. The latter has been a priority. When the 2013 gross Vote is combined with the €1.285 billion in EU funds which is paid through my Department, the total projected expenditure for the year amounts to more than €2.5 billion in public funds. In light of the current financial situation, this represents a substantial level of support for and commitment to the agricultural, food and fisheries sectors.

In addition to direct financial support for the agrifood sector, I have secured agreement for a range of taxation reliefs that would link in with the key measures being pursued under Food Harvest 2020 in respect of the growth and development of the agriculture, food and marine sectors. The main taxation measures contained in the budget introduced by the Government in December 2012 that will benefit the sector are as follows: the retention of the general 25% rate of stock relief for all farmers and 100% stock relief for young trained farmers; a new farm restructuring initiative to allow consolidation of land parcels, with the aim of improving the overall efficiency of the combined holdings; an expansion of the foreign earnings deduction scheme, which benefits SMEs and which we have extended from the previous year, to apply where an individual spends 60 days per year developing opportunities for Ireland in certain key markets; the extension of the farm partnership scheme to sectors other than milk production partnerships, subject to state aid approval; and relief from excise duty on auto diesel for licensed road hauliers. The last had an impact on the agriculture side.

I will summarise briefly the financial allocations for this year on the basis of the four strategic programmes which are set out in the 2013 Revised Estimate. As stated, the Revised Estimate links the resources required for the programmes with the key outputs to be achieved in 2013 and includes information on the outcomes achieved in 2012. Programme A deals with agrifood policy, development and trade. The funding relating to it is focused on establishing the policy framework to develop an internationally competitive, innovative and consumer focused agrifood and fishing sector. This programme involves a total expenditure estimate of €341 million for 2013.

Programme B deals with food safety, animal health and welfare and plant health. The aim of this programme is to ensure the maintenance of the highest possible standards of food safety, consumer protection, animal health and welfare and fish and plant health. This is the bedrock upon which consumer confidence in the agrifood and fisheries sectors, and in particular, our export trade, is built. Expenditure under this heading in 2013 will amount to €222 million and the targets for the programme are set out in Part III of the published Vote. Obviously, there has been some additional expenditure in this area as a result of the horsemeat crisis earlier in the year and animal welfare concerns relating to the fodder shortage experienced in late spring.

Programme C relates to the promotion of economic, social and environmental sustainability, and appropriate structural change in the agriculture, forestry, fisheries, bio-energy and food production sectors. The programme has obvious complementary links with programmes A and B in that it contains a number of schemes and measures to facilitate farmers to influence the structure and output of their holdings to meet the market needs.

This programme contains the majority of the demand-led schemes operated by the Department and the funding allocations are determined largely by forecast of the rate at which beneficiaries draw down grant approvals, which is sometimes inconsistent.

Expenditure under Programme D involves national expenditure of just under €248 million and includes the disadvantaged areas scheme, DAS, for which €195 million is provided this year. In addition to the Voted expenditure under this programme, my Department will incur expenditure of a further €1.285 billion of EU funds, most of which relates to the single payment scheme.

I have allocated an increased allocation of €195 million in support of disadvantaged area payments to reflect my commitment to protecting farmers and farming in disadvantages areas, particularly to the smaller farmers whose livelihoods are most dependent on this scheme. That is reflected in the fact that last year the Estimate for the DAS was €190 million and this year it is €195 million, even though we did not make the projected savings last year. Essentially, we are planning for more expenditure in the DAS rather than less.

That is an outline. I understand there is a series of issues the members might want to discuss whether it is linked to the Common Agricultural Policy or to direct expenditure. I am happily in the hands of the committee in terms of the areas on which it wants to focus.

2:15 pm

Photo of Andrew DoyleAndrew Doyle (Wicklow, Fine Gael)
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I thank the Minister. Before moving on to questions, Deputy Ó Cuív gave notice to the meeting that he had to leave. He hopes to be able to return later. He did not want to appear rude; he had another appointment.

Photo of Simon CoveneySimon Coveney (Minister, Department of Agriculture, the Marine and Food; Cork South Central, Fine Gael)
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To clarify, how long do we have here?

Photo of Andrew DoyleAndrew Doyle (Wicklow, Fine Gael)
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Our schedule is that we will finish by 4.10 p.m. or 4.30 p.m. at the latest, before the Order of Business if possible.

Photo of Simon CoveneySimon Coveney (Minister, Department of Agriculture, the Marine and Food; Cork South Central, Fine Gael)
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Great.

Photo of Andrew DoyleAndrew Doyle (Wicklow, Fine Gael)
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If members have questions on the general savings we can take them now. Otherwise, we will move to deal with Programme A. Does Deputy Ferris want to ask a question on the general savings and on Programme A? We will allow members ask two questions at the outset, and then Deputies Pringle, Heydon, Deering and Barry will be called. I am not sure if Deputy McNamara intends to return.

Photo of Martin FerrisMartin Ferris (Kerry North-West Limerick, Sinn Fein)
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I will deal with the breakdown in Programme A?

Photo of Andrew DoyleAndrew Doyle (Wicklow, Fine Gael)
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Programme A, yes.

Photo of Martin FerrisMartin Ferris (Kerry North-West Limerick, Sinn Fein)
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The actual spending of €325 million is down to €319 million. That is the Programme A administration total. That is a loss of almost €6 million. How will that affect the services? Is that due mainly to the reduction of the workforce through retirement or whatever? Is it also due to the amalgamations? I am aware of an amalgamation in my county in the past week and it is having a detrimental effect. I raised that with the Minister last week. Is that part of the savings in regard to Programme A?

Photo of Simon CoveneySimon Coveney (Minister, Department of Agriculture, the Marine and Food; Cork South Central, Fine Gael)
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I am familiar with the case about which the Deputy is concerned, namely, asking staff to move from Tralee to Killarney-----

Photo of Martin FerrisMartin Ferris (Kerry North-West Limerick, Sinn Fein)
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Yes.

Photo of Simon CoveneySimon Coveney (Minister, Department of Agriculture, the Marine and Food; Cork South Central, Fine Gael)
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-----and changing Departments but that difference is not in administration. On this issue, in terms of administration pay and non-pay, we have been making consistent reductions year after year because we were reducing the number of staff. Not too long ago there were more than 4,000 people employed in the Department of Agriculture, Food and the Marine; it is about 3,300 now. In terms of some of the consolidation that is taking place, particularly around regional veterinary offices throughout the country, we have gone from just under 60 down to 17. We are trying to continue to maintain the same service but in a more efficient way. That has happened in areas such as Clonakilty, Tipperary and now in Kerry, where staff in some cases have been reallocated within the Department but in more cases they have been reallocated to other Departments. In the case of Tralee, we are proposing that some of the administration staff would move from the Department of Agriculture, Food and the Marine into another Department in Killarney. That issue has gone to the Labour Relations Commission, and I have been informed that it is finalised.

In the past 18 months we have reduced staff numbers by another 300. Obviously, there is a floor below which we cannot fall because if we do services to our clients, namely, farmers, will suffer significantly. However, if we look at the actual performance in terms of getting payments out on time, last year was the best year ever and this year is better again.

In terms of the other support services the Department provides, I keep telling farmers that we want to try to first reduce the expenditure in terms of the cost of running the Department before we cut their schemes. That is what we are trying to do here. Essentially, we have knocked another €6 million off the cost of administration and the running of our Department by having fewer staff and by consolidation in terms of our facilities. The Deputy will probably see that figure reduce again because of pay agreements that are likely to be signed up to this year, which will result in further reductions in terms of the cost of pay. We do not get any direct credit for that in terms of being able to spend it in other elements of the Department, particularly around pay savings, but in terms of costs to the Exchequer, that is from where the figures primarily come.

Photo of Martin FerrisMartin Ferris (Kerry North-West Limerick, Sinn Fein)
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Would the Minister be satisfied that the service provider from the Department is not being adversely affected as a consequence of the reduction in staffing levels?

Photo of Simon CoveneySimon Coveney (Minister, Department of Agriculture, the Marine and Food; Cork South Central, Fine Gael)
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That is a fair question. I have told farmers that I want to hear about it if they are not getting the same level of service as they had previously. For example, we have watched closely the moving of some of the administration staff from Clonakilty into Cork city but there is still desk space for farmers to go into Clonakilty to get advice and what they need from the Department. In truth, I have not had any evidence to suggest there is a reduction in the quality and standard of service. That is not to say that it is not the case. I am just saying that the feedback I have got from farmers has not been negative.

This is all about making savings here to ensure we do not have to make savings elsewhere that will cut farmers' incomes. Ultimately, that is what we are trying to do. Since 2008, the cost of running this Department is down by almost €90 million. That is incredible when one thinks about it, and the standard of service in the Department has probably increased in that time.

In terms of the benchmarks one might set around payments, disease control and support for farmers, the evidence I have seen would suggest that the service has improved even though we are providing it with far fewer people. That involves many sacrifices within the Department, and I would be hugely complimentary of the management in the Department in terms of managing that change but even more complimentary of the people who have been subject to that change having to essentially restructure their lives around a different job, having to be trained to move into other Departments and so on, and all of that has been done without any industrial unrest. We are trying to address people's concerns where possible but at the same time we have to stick with the agenda of reform so that we can keep making the savings we need to make.

Photo of Andrew DoyleAndrew Doyle (Wicklow, Fine Gael)
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I call Deputy Pringle. I will come back to Deputy Ferris.

Photo of Thomas PringleThomas Pringle (Donegal South West, Independent)
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I am trying to understand these Estimate figures to figure out what is happening. I have a question on Programme A4 and the capital expenditure of-----

2:25 pm

Photo of Andrew DoyleAndrew Doyle (Wicklow, Fine Gael)
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Before the Deputy continues, has he a question on administration? We did not start with it. I apologise, I meant general expenditure.

Photo of Thomas PringleThomas Pringle (Donegal South West, Independent)
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I am referring to programme group A.

Photo of Andrew DoyleAndrew Doyle (Wicklow, Fine Gael)
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Does the Deputy wish to contribute on it before moving to the next programme?

Photo of Thomas PringleThomas Pringle (Donegal South West, Independent)
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No. I was caught trying to figure out this material.

Photo of Andrew DoyleAndrew Doyle (Wicklow, Fine Gael)
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I know. Has anyone a question on general savings within the Department? No. I call Deputy Pringle on programme A.

Photo of Thomas PringleThomas Pringle (Donegal South West, Independent)
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The notes claim that programme group A4 on the development of agriculture and food covers budget lines for the marketing, processing schemes and capital grant aid to livestock and equine centres. An allocation of €16.4 million in capital grant aid has been made. What is the nature of these capital supports and how do they break down between livestock and equine sectors?

Photo of Simon CoveneySimon Coveney (Minister, Department of Agriculture, the Marine and Food; Cork South Central, Fine Gael)
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The main portion goes to the dairy and beef investment programmes, in other words, the expansion of large beef and dairy processing facilities. Significant aid was granted, probably before my time in some cases, but we must still pay the bills. Some schemes might receive grant approval for significant amounts, yet they might not proceed with the development or spend the money for a couple of years. Every year, we are uncertain about how much of the marketing and processing grant aid that has been allocated will be actually drawn down. This year, we visited the grants' recipients and asked them whether they were going to spend the money. Spending it is fine, but we need to know so that it can be factored into the Estimates. The sooner the money is spent, the better. It allows us to plan more accurately. This money rolls over year on year and, from an accounting point of view, is only drawn down when it is spent even though it may have been granted a number of years prior. The money in question was granted in 2007 or 2008. This is unsatisfactory in terms of planning, as these are significant sums of money. However, the projects are also significant. They involve modernising and upgrading beef and dairy processing, which require large capital investments and the grants that were allocated in 2007 or 2008.

Photo of Thomas PringleThomas Pringle (Donegal South West, Independent)
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There is no deadline for-----

Photo of Simon CoveneySimon Coveney (Minister, Department of Agriculture, the Marine and Food; Cork South Central, Fine Gael)
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The equine infrastructure accounted for approximately €300,000. Capital grant assistance of €1.027 million was provided under the national development programme to assist in the pursuit of improved breeding across the equine sector. The largest chunks of money under this subhead are on the beef and dairy side.

Photo of Thomas PringleThomas Pringle (Donegal South West, Independent)
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Is that over and above the Horse Racing Ireland fund?

Photo of Simon CoveneySimon Coveney (Minister, Department of Agriculture, the Marine and Food; Cork South Central, Fine Gael)
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Yes. That is a separate fund. This is capital.

Photo of Andrew DoyleAndrew Doyle (Wicklow, Fine Gael)
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Does Deputy Deering wish to contribute?

Photo of Pat DeeringPat Deering (Carlow-Kilkenny, Fine Gael)
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I am okay for the moment.

Photo of Martin HeydonMartin Heydon (Kildare South, Fine Gael)
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I thank the Minister and his officials for attending and for this detailed and clearly laid out briefing. Going through it beforehand was useful. This might be an unfair question for the Minister, but how does the figure of 8.8% for administration costs benchmark with other Departments? My question might be a little out of left field.

Under office equipment, including IT, there has been an increase from €17.4 million to €20.1 million. Is this due to the additional IT cost of setting up a new payment system following the change in the Common Agricultural Policy, CAP? What benefits will be seen from the extra expenditure?

Given the decrease in respect of Teagasc, is Teagasc allowed to apply this cut as it sees fit or has the Department discussed with it how best to make savings without impacting on the important research, training and advisory services that it provides?

I am mindful of the fact that the horse and greyhound industry is worth almost €1 billion to our economy and employs more than 16,000 people. I am on record as stating that we need to move to a multi-annual framework of funding, thereby providing the industry with greater certainty. We should also consider other mechanisms to provide funding to the industry. Will the Minister expand on these issues?

Photo of Simon CoveneySimon Coveney (Minister, Department of Agriculture, the Marine and Food; Cork South Central, Fine Gael)
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A number of questions were asked. I cannot speak for other Departments, but our administration costs represent approximately 6.7% of expenditure in our Department, which I confidently suggest is one of the lowest percentages in the Government. Most of our expenditure is on schemes and managing direct payments. The administration cost of running our Department in the past five or six years has decreased by nearly €90 million. We are performing well in trying to do more with less, which is what every Department and business must do.

When examining the figures, the one for IT jumped out at me as well. I asked Mr. Carroll about it. Last year, our IT section spent less than it would normally spend, leading to an increase this year. A part of the increase is linked with preparing for the new CAP. A new system is also required for rolling out the agri-environment options scheme, AEOS. IT is an important part of our infrastructure. If we get it wrong, we have a collapse in the system of payments, enforcement, mapping, etc., leading to a fine from the Commission. We spend a great deal of money on IT in terms of human resources and the systems being built. Most of our Department's IT is in-house whereas many other countries outsource both it and payment agencies. It is to our benefit that we have decided not to outsource because, in a crisis situation, we manage IT and the relevant skills. This work is expensive but, given the €1.6 billion or so in expenditure for which IT is responsible, the figure outlined is a reasonable one.

The Deputy is right, in that we give Teagasc a great deal of money, approximately €111 million per year, to run an advisory service, an educational service through agricultural colleges and, perhaps most importantly, a research and development programme that needs to make Ireland a world leader in terms of technology and innovation. Regardless of whether this is done in collaboration with universities or at facilities such as Moorepark, which specialises in dairy, or whether it involves the other beef, grass or management research being conducted, Teagasc is a major player in financing research and development in the food and nutrition sector. This is how it should be.

I do not tell Teagasc how to spend money, but it has an obligation to be consistent with Government policy on the food industry and on growth that is consistent with the Food Harvest plan. I speak with Professor Gerry Boyle regularly to ensure that Teagasc is spending accordingly, which I believe it is.

The Deputy knows my opinions on the horse and greyhound fund. Of all the sports in which Ireland is a world leader, horse racing is probably at the top of the list and has been for decades. This is not because of one or two individuals.

Rather, it is because we have a system and a climate that work for us. We breed, train and ride horses very well and I want to ensure we will continue to do so. If we fall below a red line in the funding allocation for this industry, we may well maintain a strong industry in Ireland, but in terms of meeting competition from abroad, we will lose our place and probably not get it back again. That is why I have been so adamant to keep a level of funding that I hope I will continue to be able to maintain. Even though there were reductions last year, they were small. I have already outlined the reasons for them.

We have more or less finalised legislation that will require Horse Racing Ireland and Bord na gCon to put together multi-annual expenditure programmes in order to draw down their funds each year. In other words, I want them to plan three or four years ahead all the time, rather than simply receiving an allocation each year plus or minus 5% and planning for that level of expenditure on a short-term basis. We want to see some longer term planning and thinking on how to build up the horse racing and greyhound racing industries.

2:35 pm

Photo of Pat DeeringPat Deering (Carlow-Kilkenny, Fine Gael)
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I have two brief points to make. With the CAP negotiations having been completed last week, will the Minister consider a review of the IT systems, given that a totally different payment could be made, or will it be an additional expense in the next couple of years?

As regards the expense of holding the EU Presidency, how does the Minister's Department compare with others in view of the fact that his Department was very busy in that period? How do the figures compare with those the last time Ireland held the EU Presidency?

Photo of Simon CoveneySimon Coveney (Minister, Department of Agriculture, the Marine and Food; Cork South Central, Fine Gael)
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I think one can safely say the level of expenditure is lower. Total expenditure this year on the EU Presidency has been about €9 million, half of what it was the last time. This had consequences, with all informal ministerial meetings, for example, being held in Dublin, whereas normally they would been held all over the country. The same applies to expenditure on EU Presidency events, which was much more modest this time because we were in a new reality. Having said that, if one looks at the results of policy-making and decision-making, this has been one of the most successful Irish EU Presidencies ever. The Taoiseach is outlining these achievements today at the European Parliament in Strasbourg. I will let others judge, but from our perspective, we set out our targets in January. We essentially had two priorities and little else - to have the CFP and the CAP finalised. I am relieved and glad to say that both had a good outcome for Ireland, as well as being completed on time. However, that has cost us money. If one looks at the administration figures, one will see a figure of €1.3 million specifically under the heading of EU Presidency. We have had a team of 12 people in Brussels for the whole six months and, to be honest, we could have done with three times that number. In Brussels last week we were joking about the Haddington Road agreement and the weekly working hours of civil servants, which are sometimes criticised. We had the hours worked by the Tuesday. We have received fantastic value from my Department in the past six months, particularly from the group of people who have been dealing with the Irish EU Presidency and the challenges involved. I cannot compliment them enough on their performance, as well as on their commitment and motivation levels, which went way beyond what they were contractually required to do. Nevertheless, we will probably see a slightly higher figure for items such as transport, IT and postal services. The sum of €1.3 million was specifically earmarked for the EU Presidency. We will have a higher figure than we otherwise would have for IT because we know that we will have a new CAP which will have an impact in terms of software development and IT generally. That will not come cheaply because nearly all of the programmers we will need to write the new programmes are on contract and not full-time departmental staff. Some of them are paid more than I am, but one must pay to have that skills set. That was a long answer to a short question.

Photo of Tom BarryTom Barry (Cork East, Fine Gael)
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I compliment the Minister on a job well done, not just on the CAP but also on the CFP.

The sugar beet issue is also close to my heart. Does the Minister think an EU fund should be put in place to allow for the cost of holding the EU Presidency to be borne across all member states? It seems unfair that if a country spends too little on holding the EU Presidency, it may not progress.

Does the Minister intend the new IT programmes to be compatible with those in other Departments? Should other Departments share some of the cost, especially the Department of the Environment, Community and Local Government because there are linkages with inspections? I presume the new IT programmes will take the making of payments into account. Many have basic and consolidated payments which I presume will have to become part of one payment.

A hobby-horse of mine during the years has been maps. There have been issues continually about lines on maps, be they the old Ordinance Survey maps or more modern ones. The mapping company is not at logger-heads, but, unfortunately, farmers have to deal with this matter when one crosses a boundary. If one map is out of sync, it pushes other boundaries a certain distance also. Will mapping be re-examined in the light of the new IT systems?

Other items include a 2% allowance for producing certain extra crops. Will it be made compatible and thus easier to claim the 2%? When oil seed rape became part of industrial production, many forms had to be filled and sent off. It was much too complicated, but there is now a chance to have a one-stop-shop system.

Photo of Simon CoveneySimon Coveney (Minister, Department of Agriculture, the Marine and Food; Cork South Central, Fine Gael)
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We have to comply with the EU mapping standard, the land parcel identification system, LPIS. We must comply with it by 2019, but Ireland is ahead of most countries in that regard. I have spoken to many other EU agriculture Ministers about this issue and in many countries they feel vulnerable because they have outsourced the system and have no control over it. They are setting targets that they hope the outsourced system will meet, whereas we do most of it in-house - some of the cattle breeding items have been outsourced.

We have had a lot of success in encouraging single farm payment application systems online because we have the software systems in place to deal with this. Some 65% of SPS applications are made on our online system; therefore, it is working. We did have some problems last year in linking the digitisation of mapping with the AEOS and the SPS because when we checked one against the other, they did not match. In some cases, fields were a different shape or size. Members of the committee might remember that last year I got a bit of stick for the delay in making many AEOS payments owing to mapping problems. Farmers became very irate, but if we had paid out using the wrong maps, we would not have been able to draw down EU funds because that is how the audit system works. This is a tedious process, but we are well ahead of most of our EU counterparts. In fact, I am not aware of any other member state that makes payments before we do. That means continuous investment in this area.

For example, Pillar 1 has to link in with the environmental scheme in Pillar 2. The maps must match. A field is a field whether one is applying for a payment in respect of it under the environmental area, disadvantaged area or single farm payment scheme. If a farmer is growing a protein crop and we decide to couple for that, in terms of a couple payment, this will have to be factored into SPS and so on. I am confident our people will be able to do this. They have done much more complex things than this.

I have spoken to other Ministers about how my Department might be able to help their Departments in terms of mapping in particular. For example, I spoke to the Minister for Education and Skills, Deputy Quinn, about whether my Department's mapping system might of be assistance in regard to prioritising people living in the vicinity of a school. As it happens, it did not help. The fact that the Department of Education and Skills even considered raising this issue with my Department is a reflection of the reputation of our IT system. It is not without its faults and every now and again problems are experienced. While our systems are pretty good and are improving all the time, we must continue to invest in them.

2:45 pm

Photo of Andrew DoyleAndrew Doyle (Wicklow, Fine Gael)
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It was originally proposed that we would deal first with administration. However, some confusion has arisen as administration arises under each programme. Deputy Pringle has already asked questions on programme A4 but Deputy Ferris has not yet had time to put his question on programme A.

Photo of Thomas PringleThomas Pringle (Donegal South West, Independent)
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My question was on the Minister's opening statement.

Photo of Andrew DoyleAndrew Doyle (Wicklow, Fine Gael)
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I am trying to stick to the schedule as agreed. To ensure we conclude on schedule, I ask that members be mindful that administration arises under all of the programmes. I call Deputy Ferris on programme A.

Photo of Martin FerrisMartin Ferris (Kerry North-West Limerick, Sinn Fein)
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Programme A8 relates to grant-in-aid to An Bord Iascaigh Mhara. There has been a great deal of tragedy in this area recently, including the death of the Bolger brothers. There is a possibility they may have been found sooner if they had been wearing a beacon which activates when a person is in the water. Has grant aid in this regard been factored into this programme? Also, as we move towards meeting our obligations under the discard initiative, has grant aid in terms of experiments on different types of gear and increased mesh sizes been factored into this programme?

Photo of Simon CoveneySimon Coveney (Minister, Department of Agriculture, the Marine and Food; Cork South Central, Fine Gael)
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The Deputy's questions are current and relevant. A great deal is happening in both areas. The Minister for Transport, Tourism and Sport, Deputy Varadkar and I will be launching a safety initiative for the fishing industry in Union Hall next Monday, which the Deputy and all other Members are welcome to attend if they wish. It will involve grant aid, an obligation to training, and the establishment of an industry-led group of people who will report to me by the end of the year in terms of making recommendations around safety and careers in fishing, in particular for deckhands. There are a series of complex issues involved that require to be looked at, with which Deputies Pringle and Ferris will be familiar. We are responding to the issues raised. BIM is being given an allocation to support this initiative. I suspect there will be more to come on the back of the recommendations from the group. I think Union Hall is the appropriate place to launch this initiative given what happened there last year.

Following the funerals after the most recent tragedy in Waterford, I spoke to the family. My heart goes out to them. It is almost unthinkable that so many people from one family would lose their lives in the same tragedy. I have also received a fairly detailed description of the likely situation in terms of what happened to them. They were all wearing life jackets and there was an EPIRB on the boat. However, for some reason it did not trigger an emergency signal when it should have. I am told that this happened because the bow of the boat, where the EPIRB was located, did not sink. EPIRBs need to be submerged in water before they trigger. We do not know all the facts and should not overly speculate. Following receipt of a full report from the Marine Casualty Investigation Board, we may learn lessons from that tragedy. In the meantime, we must do all we can to support the community involved.

We have learned from other tragedies that if emergency services are quickly alerted to a person being in the water, the chances of the person being saved are dramatically increased. For this reason, we must ensure that when a fisherman or anyone else falls into the water, an emergency response is triggered immediately. I hope the equipment we propose to support and grant aid next Monday will address some of those concerns. A person who falls into the sea, even when wearing a life jacket, can only survive a couple of hours before dying of hypothermia. It is important the person can remain afloat and that the emergency services reach him or her quickly. The two pieces of equipment about which we are speaking are linked to saving lives. I propose, with the Minister, Deputy Varadkar, to act on this next Monday in Union Hall. I thank the Deputy for asking that question.

On the Deputy's second question on the new Common Fisheries Policy, we should know in the next ten days what Ireland's allocation will be from the EMFF, the European Maritime and Fisheries Fund. On the last occasion this was distributed, Ireland did particularly badly in that it received only €72 million, which is approximately 1% of the fund or approximately €10 million per annum. I am making the strong case to the Commissioner that Ireland should receive a significantly increased allocation this time. While every country is seeking an increase, Ireland manages a complex mixed fishery and needs resources to do so. I will make the figures available when I receive them. While Ireland will receive some money, I am hopeful the amount will be considerable enough to assist fishermen to adapt to the new realities of fishing policy, which is an obligation to land all fish, with some exception, and the gear they require to become more targeted in terms of how they fish, including mesh size, escape hatches, net shape and new storage facilities and so on. I cannot give a figure in this regard now. We have factored some of this into the programme. Members will note that BIM's budget has been increased, as has the budget for Bord Bia. This is because I see both organisations as strategic in terms of finding new markets and developing new value added products in the food and seafood sectors. It is also because BIM has to do the work I have just outlined.

Photo of Andrew DoyleAndrew Doyle (Wicklow, Fine Gael)
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We will now move on to programme B.

Photo of Thomas PringleThomas Pringle (Donegal South West, Independent)
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On programme A10(vii), legal and miscellaneous, there is a substantial increase of more than €2.1 million for this year. Perhaps the Minister would outline the reason for this.

Photo of Simon CoveneySimon Coveney (Minister, Department of Agriculture, the Marine and Food; Cork South Central, Fine Gael)
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The Deputy will know only too well that from a fisheries point of view we regularly end up in court, including in respect of cases we need to take and where we are taken to court. It is important we win those cases. To do so, we must pay in terms of legal advice. We have a very good legal team within the Department but must also at times seek the opinion of senior counsel.

While it appears to be a significant increase on last year, I assure the committee that the Department only spends money when necessary. If we lose some of the cases in question, the costs will be much higher. Deputies may be familiar with some of these cases. I receive regular reports on the legal challenges we face. The figure for 2013 is still an estimate, whereas the figure for the previous year was the actual expenditure. We may not spend this money but it is important to take a conservative approach to the amount the Department will spend on legal costs. I hope we will not spend the amount provided.

2:55 pm

Photo of Tom BarryTom Barry (Cork East, Fine Gael)
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I am a little confused trying to figure out the details. The Estimate for laboratory services at the Backweston laboratory has increased by approximately €400,000. Has the number of staff increased?

Photo of Andrew DoyleAndrew Doyle (Wicklow, Fine Gael)
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To which page is the Deputy referring?

Photo of Tom BarryTom Barry (Cork East, Fine Gael)
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It is difficult to figure out the page.

Photo of Andrew DoyleAndrew Doyle (Wicklow, Fine Gael)
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Page numbers are marked.

Photo of Tom BarryTom Barry (Cork East, Fine Gael)
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I have so many documents, the Lord himself would be confused.

It is on page 30, under the administration subhead. The figure also arises in references to the Backweston laboratory.

Photo of Simon CoveneySimon Coveney (Minister, Department of Agriculture, the Marine and Food; Cork South Central, Fine Gael)
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We are establishing a new category 4 laboratory in Backweston, which will allow us to test for more diseases than are currently tested for in Ireland. We have international certification to carry out this testing, which is expensive to do. While I understand staff numbers in Backweston will not increase, the facility's capacity for testing, especially for animal diseases, will increase significantly. I recall that when I approved this expenditure I considered it important to make the allocation given some of our experiences in the early part of the year in terms of consumer confidence in the food industry. I want to have the most advanced laboratories possible, which is the reason for the increase in the allocation.

Photo of Martin HeydonMartin Heydon (Kildare South, Fine Gael)
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On subhead A9, which relates to food aid donations and the World Food Programme, will the Minister outline exactly what is donated and the destination of such donations?

Photo of Simon CoveneySimon Coveney (Minister, Department of Agriculture, the Marine and Food; Cork South Central, Fine Gael)
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We allocate approximately €10 million per annum to the World Food Programme. While some people may argue that we have enough hunger at home, if we were to decide not to spend this money, it would not be possible to transfer the allocation into other parts of the budget because it forms part of Ireland's aid commitment as a percentage of gross domestic product. This funding has traditionally been provided by the Department because of its responsibility for food. Funding for the World Food Programme is essentially untied aid to the world's largest provider, by some distance, of food and supplies to people who are starving as a result of natural disasters such as drought. The programme requires flexibility in the area of expenditure and the Department provides it with a significant allocation every year. While this funding has spin-off benefits for the county, its primary purpose is to feed people who are starving. Given the work done by the World Food Programme, it would be difficult to persuade me to depart from our position of providing this support.

Photo of Martin HeydonMartin Heydon (Kildare South, Fine Gael)
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Do we provide money or food aid?

Photo of Simon CoveneySimon Coveney (Minister, Department of Agriculture, the Marine and Food; Cork South Central, Fine Gael)
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This is a money donation. We also have a new food aid programme in the Africa agrifood fund, which I am pleased to note the Department designed. The new scheme will be very valuable for Irish companies and the development aid programme. Under the programme, the Department and the Department of Foreign Affairs co-sponsor a fund that will assist Irish food companies which agree to establish permanent operations in developing countries. It is a pilot scheme focused initially on Kenya and Tanzania. We are trying to persuade Irish companies which would not normally consider investing in Africa because of political uncertainty and the possibility of social unrest to view Africa in a new way. We will grant-aid investment and provide political support in the countries that are supporting the programme. This means that companies establishing operations in countries that we believe will be the growing economies will have a significantly increased chance of success, although it is not guaranteed.

The rate of economic growth in Tanzania currently stands at approximately 15%. It and other countries in Africa buy many high-end food products from Ireland and will do so in future. For this reason, we want to become familiar with and understand these markets as well as have a presence in them through Irish companies.

This is a strategic way of spending public money and is good from a development aid perspective because the know-how and skill sets in Irish companies can deliver significant benefits to local communities. It is a win-win scenario with only a relatively small amount of money involved - €1 million each from my Departments and the Department of Foreign Affairs. The programme is initially confined to two African countries but there have already been significant demands from other African countries to extend the scheme. It has also generated significant interest from Irish food companies.

Photo of Andrew DoyleAndrew Doyle (Wicklow, Fine Gael)
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Given that is our job is to adjudicate on expenditure, it appears the €9.9 million will be well spent. I propose to move to programme B, which is related to food safety, animal health and welfare and plant health.

Photo of Martin FerrisMartin Ferris (Kerry North-West Limerick, Sinn Fein)
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I calculate that the allocation under this heading has been reduced by €14.316 million. Given the excellent job done on the contamination of food products late last year and early this year, is the Minister satisfied that the budget will be sufficient to maintain the same level of service in the area of food safety and in the eradication of BSE, tuberculosis and brucellosis?

Photo of Simon CoveneySimon Coveney (Minister, Department of Agriculture, the Marine and Food; Cork South Central, Fine Gael)
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I thank Deputy Ferris for his comments and his party's support during the horse meat crisis. Sinn Féin was particularly helpful during that difficult period when it could have put the boot in politically and chose not to do so. Its approach was appreciated and I hope it is satisfied with the Department's efforts to keep it abreast of developments throughout the entire saga. Fortunately, the outcome of the crisis was satisfactory. Demand for Irish beef is stronger than ever, which indicates there has not been any lasting damage done to the beef sector. While there is a new attitude to cheap frozen beefburgers, these products account for only a small segment of the overall beef market.

The major saving in this area is in respect of the suckler cow welfare scheme which has come to an end. We have introduced a new suckler cow data sharing system. For this reason, the allocation has been reduced from almost €30 million to €10 million.

On the issue of BSE testing and compensation, the age of cows to be tested has been increased because we have succeeded in virtually eliminating BSE in Ireland. While the Estimate is slightly higher than it was last year, we expect to spend less than we did last year. Deputies should note that the Estimate is calculated on the basis of a worst case scenario.

In some of the other areas, expenditure may increase as a result of some of the extra testing we were required to carry out.

We did a great deal of DNA testing of beef products which we were not expecting to do on foot of the horsemeat crisis. It meant approximately €500,000 of expenditure which would otherwise not have been incurred. We had a team of people working on the issue for the guts of six weeks who would otherwise have been engaged on other tasks. The important message is that on almost all of the disease control programmes we have in place, we are seeing less expenditure now because we are seeing fewer instances of diseases. BVD is a slightly different issue as we are now rolling out a compulsory programme in that regard whereas the programme was voluntary last year. Certainly, there is less TB in our herds than we have had since records commenced being kept in 1953 or 1954. We still have some work to do to complete the job, but important progress has been made which deserves to be recognised. The significant figure which members will see for TB and brucellosis eradication has gone from €38 million to €37 million. Hopefully, we will spend less than the Estimate provides for.

While there appears to be a significant reduction relating to suckler cows, this year spending linked to the sector will increase. On top of the €10 million scheme, there is a further €10 million in spending linked to last year's suckler cow welfare scheme for calves born in the second half of the year. There will be a further €5 million in spending linked to the beef discussion group. We will spend approximately €25 million on the sector this year, whereas last year we spent only approximately €28 million. A great deal of public money continues to go to the suckler cow sector, which is necessary as it is a vulnerable one.

3:05 pm

Photo of Thomas PringleThomas Pringle (Donegal South West, Independent)
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There is an allocation in subgroup B3.2 of €18.8 million for temporary veterinary inspectors this year. What is the need for temporary inspectors? Are they temporary because of the embargo on recruitment or is the work outsourced? B3.6 sets out a significant increase in funding for scrapie. Is that a sign of an increase in the incidence of scrapie or a potential increase? What are the implications of the increase?

Photo of Simon CoveneySimon Coveney (Minister, Department of Agriculture, the Marine and Food; Cork South Central, Fine Gael)
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The temporary veterinary officer funding allocation relates to meat factories. We rely on a panel of private veterinarians on whom we can call to go in and do work for us in terms of inspections. It is a system that has been in place for a long time. We have reduced the cost of temporary veterinary inspectors by approximately €7 million over the past three or four years. Last year, we renegotiated their hourly rate, which was reduced by approximately 5%. This year, we are completing a more significant structural review of how we operate our inspections systems in factories. This year, we have seen a great deal of evidence as to why we cannot compromise the standards in factories. We must ensure that the jobs that must be done by veterinarians are being done by veterinarians, whether they are in private practice or working in the Department. We must also consider whether work being done by vets can be done by trained Department staff. We have made some of that transition already. Some of the carcass stamping which would have been done by veterinarians previously is now being carried out by factories themselves under supervision. We will continue to try to find ways to reduce costs. The €18.8 million provided for is an estimate and I hope we will not spend more than we spent last year. If one considers the Estimate for last year versus the Estimate for this year, the figure appears to be down. The actual expenditure last year was €17.6 million whereas the Estimate was €20.5 million. This year's Estimate is down by €2 million. Hopefully, expenditure will be well below the €17.6 million mark also. Our financial people are taking a cautious approach. The structural review to which I have referred is what is called the lean review. We will get results in the form of savings in the coming months.

Under the scrapie active surveillance programme, the Commission adopted a level of testing for future years at a minimum of 10,000 sheep slaughtered for human consumption and 10,000 fallen sheep aged over 18 months. In 2012, a total of 10,963 healthy slaughtered animals at meat plants were tested between and a total of 10,340 fallen animals were tested at knackeries. A total of 59 animals presented for testing in knackeries under the surveillance programme. The same level of surveillance will continue for 2013. The Estimate is probably higher than the expenditure will be but it is a relatively small sum of money. It was less than €400,000 last year and the Estimate is for €800,000 this year.

Photo of Thomas PringleThomas Pringle (Donegal South West, Independent)
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It is a €500,000 increase.

Photo of Simon CoveneySimon Coveney (Minister, Department of Agriculture, the Marine and Food; Cork South Central, Fine Gael)
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Last year's Estimate was €940,000 even though we only spent €381,000. This year's Estimate is €860,000. I suspect that unless a problem emerges this year, the actual expenditure figure will be well below €860,000. Hopefully, it will be down to the figure we had last year.

Photo of Thomas PringleThomas Pringle (Donegal South West, Independent)
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What happens to the surplus allocation?

Photo of Simon CoveneySimon Coveney (Minister, Department of Agriculture, the Marine and Food; Cork South Central, Fine Gael)
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I receive a monthly report from the finance staff in my Department on whether we are ahead or behind the Estimate. In some areas, we will be slightly ahead, but in most, we will be slightly behind. As we move to the end of the year, we must review constantly how we are spending money. Sometimes, we move money between Estimates or headings to ensure that we have full spend, which requires in the case of substantial sums the approval of the Department of Public Expenditure and Reform. It is up to our people to produce accurate Estimates each year. Accountants will be conservative. The last thing they want is to have to say to a Minister that we do not have enough money to meet our obligations. There is always a slight overestimation of spending, in particular on disease control given that one never knows when one will have an outbreak. Last year, we were particularly accurate in matching our Estimate to our expenditure. The year before, there was a very significant difference between what was estimated and what was spent. I wanted to ensure that would never happen again. I have become somewhat obsessed about ensuring that the Department spends everything it is sanctioned to spend. For that reason, we have provided for monthly updates on expenditure. If we are underspending on scrapie, I assure the committee that we will be spending the money on something else.

Photo of Andrew DoyleAndrew Doyle (Wicklow, Fine Gael)
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We might get notice of a significant Supplementary Estimate in or around the beginning of December.

Photo of Pat DeeringPat Deering (Carlow-Kilkenny, Fine Gael)
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TB seems to represent one of the most significant expenses for the Department. Unfortunately, the percentage has increased by 1.4% in the past year. Are we anywhere closer to resolving the issue or are we at a stage where we should consider a different procedure?

We spend a good deal of money year in, year out trying to resolve the matter and we do not seem to be achieving much. Perhaps we are to some extent, but we are not getting to the bottom of the matter in that regard.

3:15 pm

Photo of Andrew DoyleAndrew Doyle (Wicklow, Fine Gael)
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Is this tuberculosis?

Photo of Simon CoveneySimon Coveney (Minister, Department of Agriculture, the Marine and Food; Cork South Central, Fine Gael)
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I reckon the tackling of TB is one of the great success stories. The figure in subhead B3 is estimated to reduce from €38 million to €37 million this year. Only a relatively short number of years ago that figure was €58 million. We are down one third in terms of our expenditure on compensation for farmers as a result of TB.

Photo of Pat DeeringPat Deering (Carlow-Kilkenny, Fine Gael)
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It has increased in the past.

Photo of Simon CoveneySimon Coveney (Minister, Department of Agriculture, the Marine and Food; Cork South Central, Fine Gael)
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I am unsure what figures Deputy Deering is referring to, but addressing TB and brucellosis has been a real success story in the Department, so much so that my British counterpart, the UK Secretary of State, Owen Paterson, spent one and a half days examining our TB programme because the British want to learn from it. The UK is going in the opposite direction and that is a problem for us because of Northern Ireland. Deputy Deering is clearly referring to a figure.

Photo of Pat DeeringPat Deering (Carlow-Kilkenny, Fine Gael)
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Yes, there has been 0.14% of an increase. It is on page 10 of the booklet we were presented with.

Photo of Simon CoveneySimon Coveney (Minister, Department of Agriculture, the Marine and Food; Cork South Central, Fine Gael)
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Let us consider the actual instance of TB. The number of reactors in 2002 was just under 29,000. Last year, the figure was a little over 18,000. There has been a steady reduction. In 2010 the figure was 20,211, in 2011 it was 18,531 and last year it was 18,476. We expect that figure will be lower again this year. Deputy Deering may be looking at figures for the number of newly restricted herds, which increased slightly between 2011 and 2012. That was partly because we have new rules relating to contiguous herds. We are trying to finish the job in terms of getting TB out of our herds. The trend on the whole is good for farmers and it is saving us money.

Photo of Pat DeeringPat Deering (Carlow-Kilkenny, Fine Gael)
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I am trying to make a general point. Is the testing system, which we have had for some time, as accurate as it should be? I realise this is more than a financial question. What if a different system were in place? We discussed the idea previously at the committee. Is the testing procedure accurate? From time to time cattle may be restricted but when they go to the slaughtering plant they do not appear to have the same problem. What is the accuracy of the tests?

Photo of Simon CoveneySimon Coveney (Minister, Department of Agriculture, the Marine and Food; Cork South Central, Fine Gael)
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That has been raised with me before. My understanding is that the Department has examined the matter. We have a system of testing for TB that is cost-effective and, I understand, accurate, but I am open to new ways of doing it. If we can do a more accurate job for the same cost or if there are ways of testing more accurately for TB then Deputy Deering should send me the details and I will certainly examine them.

Photo of Pat DeeringPat Deering (Carlow-Kilkenny, Fine Gael)
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When the Minister introduced the new suckler cow welfare scheme last year he did not get the applause he should have got. What kind of uptake was there from the general farming organisations and from farmers in particular? What were the numbers?

Will the Minister confirm a point about knackeries? Did I see somewhere in the recent past that there would be an increase in fees for knackeries in the coming year?

Photo of Simon CoveneySimon Coveney (Minister, Department of Agriculture, the Marine and Food; Cork South Central, Fine Gael)
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There were 31,705 farmers in the suckler cow welfare scheme. We have factored in that a significant number of those farmers will be interested in the new €10 million scheme because essentially they have to do very little. All they have to do is keep sending their breeding data to the Irish Cattle Breeding Federation and give basic information such as calving problems in cows and the link to breeding and so on.

In hindsight, the most valuable part of the suckler cow welfare scheme was the breeding data we got from the herd. We want to keep the data flowing but essentially we were paying farmers a little less money for doing nothing new. I do not have exact numbers but I suspect the full €10 million allocation will be used up. Farmers tend not to leave money behind under such schemes.

Photo of Pat DeeringPat Deering (Carlow-Kilkenny, Fine Gael)
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Is the figure of 31,000 for the total number of suckler farmers in the country that were in the old scheme? Is that right?

Photo of Simon CoveneySimon Coveney (Minister, Department of Agriculture, the Marine and Food; Cork South Central, Fine Gael)
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That is the number of applications processed under the old scheme. Payments were made amounting to €28.2 million to those 31,000 farmers. There is a good deal more than 31,000 suckler cow farmers in Ireland. The figure is closer to 80,000.

Photo of Pat DeeringPat Deering (Carlow-Kilkenny, Fine Gael)
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What about the knackeries?

Photo of Andrew DoyleAndrew Doyle (Wicklow, Fine Gael)
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Is there a proposal to increase the fees?

Photo of Pat DeeringPat Deering (Carlow-Kilkenny, Fine Gael)
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Did I see somewhere in the recent past something about a proposal to increase the cost of knackeries?

Photo of Simon CoveneySimon Coveney (Minister, Department of Agriculture, the Marine and Food; Cork South Central, Fine Gael)
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No, not that I know of.

Photo of Andrew DoyleAndrew Doyle (Wicklow, Fine Gael)
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I wish to make a comment about TB. As you know, I met the UK Secretary of State, Mr. Paterson, in Roundwood. There are hot spots. We need to concentrate resources and examine the primary sources, which may not be the original sources. The Minister is well aware of the issue of deer in the uplands of Wicklow. We should concentrate on that. The Department is keen to proceed. I urge those responsible in the Department to continue to work with other relevant Departments to try to resolve the issue, because the figures are coming down everywhere but there are places where the statistics are stubborn and will not budge.

Photo of Simon CoveneySimon Coveney (Minister, Department of Agriculture, the Marine and Food; Cork South Central, Fine Gael)
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Yes.

Photo of Andrew DoyleAndrew Doyle (Wicklow, Fine Gael)
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If everyone is happy we will move to programme C. You will be pleased to know that we are catching up on our schedule. I call Deputy Ferris on programme C, which relates to rural economy, environment and structural changes. A briefing was provided. Deputy Ferris, have you a question?

Photo of Martin FerrisMartin Ferris (Kerry North-West Limerick, Sinn Fein)
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Subhead C8 relates to the Sea-Fisheries Protection Authority. There is an increase of a little over €1 million. Has there been an increase in personnel in the SFPA or is it capital spending?

Photo of Andrew DoyleAndrew Doyle (Wicklow, Fine Gael)
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Is that your question?

Photo of Martin FerrisMartin Ferris (Kerry North-West Limerick, Sinn Fein)
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Yes, that is one part of it.

Photo of Simon CoveneySimon Coveney (Minister, Department of Agriculture, the Marine and Food; Cork South Central, Fine Gael)
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There is a capital increase from €441,000 to €1.49 million. I need to get the exact details but I understand the authority bought new rigs this year and some other equipment. I need to get the details for Deputy Ferris. I am unsure whether the officials have it here. Most of the difference is capital rather than personnel. There are no extra personnel in the Sea-Fisheries Protection Authority.

Photo of Martin FerrisMartin Ferris (Kerry North-West Limerick, Sinn Fein)
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My final question relates to the early retirement and installation aid schemes. I note that from 2012-----

Photo of Simon CoveneySimon Coveney (Minister, Department of Agriculture, the Marine and Food; Cork South Central, Fine Gael)
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Which one is that?

Photo of Martin FerrisMartin Ferris (Kerry North-West Limerick, Sinn Fein)
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This is under subhead C4. There is a reduction from €20 million to €14 million. Does that relate to people who have completed the scheme and who are no longer on it? I am referring to the early retirement scheme in particular. The numbers are coming down.

Photo of Simon CoveneySimon Coveney (Minister, Department of Agriculture, the Marine and Food; Cork South Central, Fine Gael)
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Both the early retirement scheme and the installation aid scheme are closed.

Photo of Martin FerrisMartin Ferris (Kerry North-West Limerick, Sinn Fein)
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I know that.

Photo of Simon CoveneySimon Coveney (Minister, Department of Agriculture, the Marine and Food; Cork South Central, Fine Gael)
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This is ongoing expenditure linked to decisions made years ago. As the years go on more and more people come out of the schemes or the schemes run out. We will continue to see the early retirement and the installation aid figures falling year on year.

Photo of Martin FerrisMartin Ferris (Kerry North-West Limerick, Sinn Fein)
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Are there any proposals for the future to bring back those schemes?

Photo of Simon CoveneySimon Coveney (Minister, Department of Agriculture, the Marine and Food; Cork South Central, Fine Gael)
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Essentially, there is going to be an installation aid scheme through the CAP. It was designed and advocated for by Ireland at the start. We wanted young farmers under the age of 40 years to get a top-up payment on the single farm payment, which we had agreement on last week. Up until last week it was going to be voluntary in countries but we secured agreement that it would be mandatory. A young farmer in Ireland will get a 25% top-up on a single farm payment. We need to decide how that 25% is calculated, whether it is 25% of the average farm payment in Ireland and the same for everyone or whether it is 25% of a young farmer's single farm payment.

My personal preference would be for it to be 25% of the average payment in the country in order that each young farmer would get the same level of top-up. Otherwise, the 25% top-up for the person who inherits a very high single farm payment would be much higher than that for a person who inherits a very low single farm payment and I consider this to be unfair.

However, members will have a chance to discuss this when discussing the Common Agricultural Policy. Essentially, the installation aid thinking now centres on the CAP because I do not have the money to introduce another expensive installation aid scheme. As to whether a retirement scheme will be introduced to complement an installation aid scheme, my Department must consider whether we can afford to do that in the rural development programme. In the future, there will be less money available in the rural development programme than is the case at present and consequently, there will be many competing interests for that money. For the Deputy's information, the Commission undertook some research to assess the best way of effecting generational change in farming and of getting young farmers into agriculture. The Commission considered the benefits of encouraging early retirement and of encouraging young people coming into farming and found the installation aid type of approach was much more effective than was a retirement scheme type of approach. This is the reason I have advocated for it.

3:25 pm

Photo of Andrew DoyleAndrew Doyle (Wicklow, Fine Gael)
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We will have another day on that subject, on which we probably will have a long discussion.

Photo of Pat DeeringPat Deering (Carlow-Kilkenny, Fine Gael)
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I have one question in respect of the targeted agricultural modernisation scheme, TAMS. While I am open to correction, it is interesting to note that out of the €100 million set aside for TAMS, only €20 million has been drawn down. Is this correct?

Photo of Simon CoveneySimon Coveney (Minister, Department of Agriculture, the Marine and Food; Cork South Central, Fine Gael)
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We have an issue with TAMS, in that it is the one area in my Department's budget where it will be obliged to change tack to ensure all the money is drawn down. This is because many of the TAMS programmes it had outlined simply have not had the funding drawn down. There have been some exceptions such as the pig loose housing investment programme, for which a lot of money was drawn down. Similarly, a considerable amount of money was drawn down on the poultry side and some money was drawn down in respect of the dairy efficiency programmes. However, on other programmes such as, for example, the water harvesting programme, farmers simply did not draw down the money because they were obliged to provide matching funding themselves. Consequently, the Department is considering ways to ensure that the full amount of TAMS money available from Europe can be drawn down. However, as we have until the end of 2015 to do this, we should not panic in that regard.

Photo of Pat DeeringPat Deering (Carlow-Kilkenny, Fine Gael)
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Is that figure of €20 million out of €100 million correct?

Photo of Simon CoveneySimon Coveney (Minister, Department of Agriculture, the Marine and Food; Cork South Central, Fine Gael)
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My understanding is that €60 million will be spent by 2015 and thus far, €20 million has been spent. Therefore, we have another €40 million to draw down.

Photo of Pat DeeringPat Deering (Carlow-Kilkenny, Fine Gael)
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Does the money carry over from year to year?

Photo of Simon CoveneySimon Coveney (Minister, Department of Agriculture, the Marine and Food; Cork South Central, Fine Gael)
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Yes. The Deputy need not worry as that money will not be lost. However, ways must be found because TAMS requires farmers to spend money to draw down money. It is not like some of the other schemes in which money is simply handed out and farmers have been slow to borrow to spend to draw down grant aid.

Photo of Pat DeeringPat Deering (Carlow-Kilkenny, Fine Gael)
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Are there restrictions in respect of the type of scheme one can have?

Photo of Simon CoveneySimon Coveney (Minister, Department of Agriculture, the Marine and Food; Cork South Central, Fine Gael)
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We are somewhat restricted but the Department is examining various options at present in respect of dairy expansion and potential drainage schemes. However, some of these schemes have knock-on consequences for other Departments, particularly those related to drainage. The Department is considering ways in which this money can be drawn down but hopefully, this will be a good news story in the forthcoming budget.

Photo of Tom BarryTom Barry (Cork East, Fine Gael)
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To follow on from the discussion on TAMS, the Minister mentioned the benefits for the pig sector. However, tied into that sector are those tillage farms, including my own, which take much of the slurry from these units. The problems farmers like me face in this regard is that each load is inconsistent and is not homogenous. Moreover, the slurry arrives at times of the year when its value is not as high because if one spreads it on stubble ground, the nitrogen will evaporate. There is no use in putting a lot of nitrogen into a winter crop in the back end of the year, whereas one achieves a completely different result if one incorporates it into the soil for spring barley or spring wheat. I ask the Minister to consider grant-aiding slurry storage facilities for large areas of land in which lots of liquid slurries and the associated nutrients can be imported, agitated and tested. Consequently, one would be able to ascertain precisely its volume and composition. This completes the nitrogen cycle and certainly would cut down on the cost of nitrogen, as well as increasing the quantity of organic matter in soils that are being depleted.

My second point pertains to the issue of early retirement. In the context of a set number of early retirements per year, would the Minister consider examining what would be the net cost of so doing? In the early days of the previous pension scheme, in which my parents were involved, participants could keep their old-age pension but in the latter end, their old-age pension was taken from them. So be it but in my own case and that of others, this is certainly what got us involved in agriculture. I acknowledge that funds are tight but I ask the Minister to consider what would be the cost.

I note the Minister has provided for increased expenditure on sea fisheries, which he thought might have been for rigid inflatable boats, RIBs, hardware that was purchased, boats and so on. Would the Minister consider co-operating with voluntary bodies such as Mallow Search and Rescue, with which I am involved? These bodies purchase lots of equipment, were involved in the recent rescue mission in west Cork and do a great deal of work nationwide. However, they pay full VAT and are not tied in. It appears to me to be double expenditure, in that there is a trained unit but the Department is purchasing on the other side, whereas a collaboration between both might bring better value for everyone.

Photo of Simon CoveneySimon Coveney (Minister, Department of Agriculture, the Marine and Food; Cork South Central, Fine Gael)
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On the last question first, I am familiar with Mallow Search and Rescue, which was very helpful at the time of that tragedy at Union Hall, as have been many other organisations, both on rivers and in respect of sea tragedies and drownings. However, the Sea-Fisheries Protection Authority, SFPA, plays a very different role. It is not primarily responsible for safety, which primarily is the role of the Coast Guard, the RNLI and the Naval Service. Most of the time, the SFPA's activities centre on enforcement of the rules and of ensuring that trawlers catch the quota they have been allocated. The authority carries out much testing onshore, when fish are being landed. It also boards some vessels, both in port and in harbours. Essentially, the authority is responsible for policing the fishing industry to ensure it is obeying the rules. While Bord Iascaigh Mhara, BIM, is a development agency, the Coast Guard, the Naval Service and the RNLI combined provide search and rescue services. It is a fair point in respect of voluntary organisations such as Mallow Search and Rescue, of which there are many throughout the country. They raise much money and there probably should be more integration with the Coast Guard. However, I believe it is important to stress the SFPA plays a different role.

As for the cost of early retirement, I have no doubt but there will be a debate, probably in this committee and certainly in the Dáil Chamber, on the new rural development programme. It will be necessary to design a rural development programme for Ireland that can keep people farming, be consistent with the Food Harvest 2020 targets and look after those who cannot benefit from that plan. There will be many competing interests involved, from young farmers to those who wish to retire, as well as environmental schemes, disadvantaged area payments and new challenges such as climate change and the Department will have a lot less money to spend. While the Department certainly will cost such early retirement measures, it will be in a mix with many other competing interests.

On TAMS, during the lifetime of the previous Government, one of the most expensive programmes this Department has ever managed was the farm waste management scheme. Initially, the Department had anticipated it would spend approximately €200 million. However, it ended up spending €1.2 billion because it was a demand-led scheme and the Department of Finance is still pretty sore about it. It would be difficult for the Department to get sanction for a new farm waste management slurry storage type scheme unless it was designed to be and kept very tight.

Photo of Tom BarryTom Barry (Cork East, Fine Gael)
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It would be very tight.

Photo of Simon CoveneySimon Coveney (Minister, Department of Agriculture, the Marine and Food; Cork South Central, Fine Gael)
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This is something which it may be necessary to link with dairy expansion. If herd sizes increase, given the lessons farmers have learned over the past 12 months, they will be obliged to plan for keeping herds indoors for longer.

That means more storage facilities and more fodder. That has investment requirements. That is in the mix in terms of TAMS.

3:35 pm

Photo of Martin HeydonMartin Heydon (Kildare South, Fine Gael)
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I have two brief questions. In respect of the previous early retirement scheme and the commitments the Minister has on those legacy payments, what year does that finalise? Does he have to make his last payments on those? In respect of 9(iii), I did not think the Land Commission would cost us money but I presume it is small enough expenditure. What costs are still involved in respect of the Land Commission?

Photo of Simon CoveneySimon Coveney (Minister, Department of Agriculture, the Marine and Food; Cork South Central, Fine Gael)
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I am not sure about the Land Commission. The Land Commission is just storage of maps.

Photo of Martin HeydonMartin Heydon (Kildare South, Fine Gael)
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What is the cost of it?

Photo of Simon CoveneySimon Coveney (Minister, Department of Agriculture, the Marine and Food; Cork South Central, Fine Gael)
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It is €19,000. The early retirement scheme is due to run out at the end of 2016, so members will see it stepped down, just like the REP scheme is stepping down each year. We are making natural savings there, which is helpful given the fact that we must reduce budgets year after year. Hopefully, that will stop in the not too distant future and we will start increasing expenditure again, but for the moment, we must meet the targets set for us.

Photo of Andrew DoyleAndrew Doyle (Wicklow, Fine Gael)
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I know Deputy Ferris is in a hurry to ask a question about programme D, but I wish to make one point in respect of C6, forestry and bio-energy. I know the allocation is the same but the outcome is expected to be somewhat less. One issue that has come up concerns qualifying land. The definition of "unenclosed" seems to be a prohibiting factor. In the review of the scheme, could that be reviewed? It affects parts of Wicklow because of deer that are ruled out and others because they are asset-sensitive or are defined as unenclosed, so the level of grant aid is significantly lower. That needs to be looked at again in some detail.

I am conscious that Deputy Ferris is anxious to ask a question on programme D. We have finished programme C. I will let Deputy Ferris in first.

Photo of Martin FerrisMartin Ferris (Kerry North-West Limerick, Sinn Fein)
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In respect of programme D-----

Photo of Simon CoveneySimon Coveney (Minister, Department of Agriculture, the Marine and Food; Cork South Central, Fine Gael)
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A working group is looking at the definition of unenclosed land at the moment because it is not just an issue in Wicklow. I suspect it is an issue in Kerry and a number of other areas as well.

Photo of Martin FerrisMartin Ferris (Kerry North-West Limerick, Sinn Fein)
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I think the Minister has probably answered my question about programme D. He is increasing funding for the disadvantaged areas scheme, DAS, to €195 million for this year. Is that an increase of €5 million on last year?

Photo of Andrew DoyleAndrew Doyle (Wicklow, Fine Gael)
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I think the Minister referenced it in his opening statement.

Photo of Simon CoveneySimon Coveney (Minister, Department of Agriculture, the Marine and Food; Cork South Central, Fine Gael)
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This relates to DAS. In respect of what happened last year with the scheme, members will remember we had quite a long debate in this committee about how we would make the savings because I had asked people for their feedback. We had a closed-door session, which was very useful in terms of getting people's feedback. I made it clear that we had to make the savings so I wanted people's input as to how we might do that. We had an Estimate of €190 million to spend on DAS last year. We ended up spending €206 million. We were trying to be clever about it and it did not work out so we learned some lessons from that for this year. We had to bring the figure down. Initially, we were asked this year to make sure we got it down to €190 million. I increased that to €195 million. Even though the Estimate last year was €190 million and is €195 million this year, €206 million was spent last year and €195 million will be spent this year because I am pretty confident we will get our savings this year.

The Deputy knows how we are getting those savings. They relate to ensuring people keep animals for a certain number of months per year and that there is a basic stocking rate, which is still low but is slightly higher than it used to be. Certain animals and conditions were taken out of DAS payments that would not qualify. Again, this is all about trying to ensure people who are actively farming on hillsides and in disadvantaged areas are prioritised and do not have any reduction. We have made other savings as well in DAS in terms of the actual area that people can apply for. That reduction on lowland DAS areas will make savings this year but, again, we have maintained full payments for people who are essentially farming on mountains because they are the most disadvantaged farmers. I am pretty confident we will get down to our target figure of €195 million this year.

It is hoped this will mean we will not have to make any more cuts but when I am asked to make another €30 million of savings in the upcoming budget, which I have been asked to do, there are only a few schemes left that are big expenditure schemes. These are REPS and DAS. Luckily, REPS is naturally making savings because the number of farmers in REPS is falling all the time. I do not want to make any solid commitments. I want to protect farmers in disadvantaged areas as best I can in the upcoming budget, but we must wait and see what the arithmetic says.

Photo of Thomas PringleThomas Pringle (Donegal South West, Independent)
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I have two quick questions on D3(ii), cost of capital for purchasing intervention products. What is that? What does D3(v), clearance of accounts, mean?

Photo of Simon CoveneySimon Coveney (Minister, Department of Agriculture, the Marine and Food; Cork South Central, Fine Gael)
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What was the second question?

Photo of Thomas PringleThomas Pringle (Donegal South West, Independent)
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It concerned D3(v), clearance of accounts.

Photo of Simon CoveneySimon Coveney (Minister, Department of Agriculture, the Marine and Food; Cork South Central, Fine Gael)
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The second question is easy to answer. That essentially relates to penalties. The technical term for them is disallowances. Every country must spend something on disallowances each year following an audit from the Commission. It looks at all the schemes and the systems in place to control those schemes and then makes an estimate of the money it should not have given or should not give on the basis of a lack of enforcement, mapping problems or farmers over-claiming. The fact that our disallowance figure will probably be less than €10 million this year out of €1.6 billion is pretty good. Denmark recently had a disallowance figure of €110 million and the UK recently had a disallowance figure of over €200 million. When Deputies and farmers ask me whether we can back off on inspections or being so obsessed with getting digitised maps correct with the delays that come from that, the reason I say "no" is because we will get audited for everything we do. All the mistakes we make will cost us money and it will be in the disallowance figure. At the moment, it is very low but it was much higher than €10 million. We have a constant, fractious ongoing negotiation with the Commission to keep that figure as low as possible. People like Mr. Mc Mahon and others are regularly battling to keep that figure as low as possible.

Photo of Thomas PringleThomas Pringle (Donegal South West, Independent)
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Is it a fine?

Photo of Simon CoveneySimon Coveney (Minister, Department of Agriculture, the Marine and Food; Cork South Central, Fine Gael)
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It is essentially a fine. It is money committed from the EU that it does not give us, so it is basically the same as a fine. We anticipate the money coming in that is linked with schemes and the EU gives us so much and does not give us the remainder because that is the disallowance.

D3(ii) is the interest on capital borrowed for intervention. This is an Estimate but we will not spend that much, which is why the figure last year was €28,000 even though we have given a much higher figure this year. Could Mr. Caddie tell me what the figure of €28,000 we spent last year relates to?

To my knowledge, there are not any products on which intervention money is being spent because the trigger for intervention is approximately half the price currently for beef, for example. However, this may be ongoing payments from previous intervention prices for which we would have had to have paid and then recoup the money. There is interest to be paid in the meantime which is, essentially, the cost of capital. When there are early payments for single farm payments, for example, we must carry the cost of financing early payments in terms of the interest charged between when the money is drawn down from Europe and when we pay it to farmers. I presume this is a similar cost in terms of interest on capital around intervention but I can give the Deputy a note on it. That is my understanding of it.

3:45 pm

Photo of Martin HeydonMartin Heydon (Kildare South, Fine Gael)
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My main question was whether we have any products in intervention but the Minister has answered it. In regard to the school milk scheme, is that a cash payment? Does the Department buy the milk or what way does that work?

Photo of Simon CoveneySimon Coveney (Minister, Department of Agriculture, the Marine and Food; Cork South Central, Fine Gael)
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The school milk scheme is intended to boost milk consumption and to promote and encourage the consumption of milk among school children. In 2012, €0.9 million was provided for payments towards the cost of whole milk and skimmed milk products, including milk flavoured and otherwise, and plain yogurts to all nurseries, preschools and primary school pupils. Each pupil is entitled to a maximum of 250 millilitres of milk or milk equivalent per day at a charge determined by the creameries. In other words, we are essentially subsidising the cost of the provision of milk to schools.

Photo of Andrew DoyleAndrew Doyle (Wicklow, Fine Gael)
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The Deputy can decide whether he wants to go back to dairy post 2015.

Photo of Tom BarryTom Barry (Cork East, Fine Gael)
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On that very point, I know of schools which have given up that scheme. It really upsets me that while we encourage our children to drink milk, some schools do not take up the scheme. It is Government policy to subsidise the scheme. What about children who want milk to be available? How can we stop this two tier system where it depends on whether there are so many milk drinkers in a school?

Photo of Simon CoveneySimon Coveney (Minister, Department of Agriculture, the Marine and Food; Cork South Central, Fine Gael)
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There is an administration requirement to draw down this funding and in some schools teachers do not want to do it because of resource or staff shortages or whatever. I agree with the Deputy if the money and the scheme are there, it is something we should encourage, in particular given our ambitions for the dairy sector. We should be the dairy country in the world in terms of promoting dairy products, apart from anything else because they are good for people. That is why, when there was a proposal to limit the advertising of cheeses, I responded as negatively as I did. There are not too many obese children who are obese because they eat too much cheese or drink too much milk. There are probably other factors involved. Perhaps we can talk to the Department of Education and Skills about it.

Photo of Tom BarryTom Barry (Cork East, Fine Gael)
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Would the Minister consider a token system or something like that to allow this to be taken up? Obviously, some schools are failing to do their job in this regard. This should not be allowed to slip through the net.

Photo of Simon CoveneySimon Coveney (Minister, Department of Agriculture, the Marine and Food; Cork South Central, Fine Gael)
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We even put free fridges into some schools to encourage this scheme. This is about milk promotion but it is also about healthy eating in schools. The Department of Education and Skills has other schemes around healthy eating programmes in schools and this is linked to them.

This is a separate point entirely but, across Departments, we are looking at a more effective healthy eating programme in schools generally and linking in three or four schemes being funded by different Departments and, perhaps, having one more effective and successful overall scheme. It is done very well in a number of other countries and I recently attended a presentation on how it is done in Australia. We could probably do better in this area but from our perspective, we are spending money trying to subside the consumption of milk in schools.

Photo of Tom BarryTom Barry (Cork East, Fine Gael)
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Can we discuss-----

Photo of Andrew DoyleAndrew Doyle (Wicklow, Fine Gael)
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There is certainly scope to do that in conjunction with the Departments of Health and Education and Skills and to take some sort of lead. We should promote it as it is in the best interest of all school children.

We have dealt with allocations, targets and administration and have exhausted all the questions. This has proved useful from the point of view of getting a perspective on the Estimates and outturn for next year's budget. In many ways, this is beneficial in terms of what we will look at for next year's budget, in particular, if we engage in the same manner as we did last year for the 2013 budget. We are developing an ongoing understanding of how the process works.

Members have expressed an interest in engaging with the Minister before the Dáil rises for the summer on the 2014 budget and coming back to it in early September given that the budget will be almost two months earlier. Perhaps the Minister will take that on board. The clerk to the committee will be in touch. I know it is putting a lot of pressure on people but we felt it would be beneficial to have an initial feedback from the Minister and his officials.

Before we conclude, I thank the Minister and his officials for assisting us in what was a very productive meeting. I thank the members for their engagement.