Andrew Doyle (Wicklow, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I welcome from the Irish Farmers Association, Mr. John Lynskey, chairman of the national sheep committee, and Mr. Kevin Kinsella, director of livestock, to make a short presentation.

I wish to draw to attention the fact that witnesses are protected by absolute privilege in respect of their evidence to the committee. If witnesses are directed by the committee to cease giving evidence on a particular matter and they continue to do so, they are entitled thereafter only to a qualified privilege in respect of their evidence. Witnesses are directed that only evidence connected with the subject matter of these proceedings is to be given and they are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person, or persons or entity by name or in such a way as to make him, her it identifiable.

I invite Mr. Lynskey to take the floor.

Mr. John Lynskey:

I thank the Chairman and member of the joint committee for the opportunity to address them today. I am accompanied by Mr. Kevin Kinsella, IFA director of livestock, as well as Mr. John Bambrick and Mr. Sean Quirke from County Kilkenny.

As part of a recent announcement on CAP reform by the Minister for Agriculture, Food and the Marine, Deputy Simon Coveney, it was proposed that the sheep grassland payment would be abolished from 2015 and that the payment involved would be subsumed into the single farm payment. There are a number of problems with this proposal, including that most of the benefits of the sheep grassland scheme will be lost to individual sheep farmers and to the national sheep sector. Before I explain the problem in detail I will provide some background on the importance of the sheep sector to Irish agriculture.

Sheep farming is a major farming enterprise. It involves more than 34,000 producers across the Twenty-six Counties with a significant concentration in mountain and hill areas, where it is not possible to farm any other type of agricultural enterprise. Sheep farming is particularly important in counties Donegal, Galway, Mayo, Kerry and Wicklow and is also strong in counties Roscommon, Cork, Wexford, Meath, Tipperary, Sligo and Carlow. The sector has a number of unique and positive characteristics, of which members will be aware. It has an output value of €250 million with exports of more than €175 million. The total production is 56,000 tonnes, of which 45,000 tonnes are exported to our main markets of France and the United Kingdom. There are eight key meat plants involved in processing lamb for export and a large number of small abattoirs servicing the domestic butcher trade. Lamb consumption in the domestic market accounts for approximately 16,500 tonnes. As well as producing top quality lamb the sheep farming sector also plays an important role in protecting the rural environment and the biodiversity in hill and mountain areas.

The income from sheep farming is low. The most recent figures from the 2012 Teagasc national farm survey show that incomes on sheep farms at just over €18,000 per annum are approximately 55% of the average industrial wage. The sheep sector has come through some very tough times. In the past two major reforms of the Common Agricultural Policy CAP, the sheep sector was badly short-changed. In the first Fishler CAP reform, with the low ewe premium, sheep lost out. In addition sheep farming was also overlooked for extensification premium payments.

In 2005 under decoupling, this problem was ingrained in the system with sheep farmers ending up with generally low direct payments. Throughout the past decade, sheep numbers on Irish farmers have been in serious decline. Total sheep numbers have fallen from 4 million in 2005 to 3.1 million in 2009. The IFA worked hard to get support for the sheep sector during this period and it culminated in the reintroduction of the sheep grassland scheme valued at €18 million per annum in 2010. The scheme proved to be effective and was simple to administer. The figures show that it halted the decline in ewe numbers and helped to restore some confidence at farm level. The total sheep numbers have made some degree of recovery, rising to 3.6 million at the end 2012. The ewe numbers have increased by 273,000 from 2010 to 2012 and now number 2.47 million. The sheep grassland payment played an important role in this recovery. However, the latest CSO data for December 2013 show a reduction in sheep numbers back 3.1% on December 2012 levels.

The breeding flock is back 1.2% or 30,000 ewes. Unfortunately the sheep grassland scheme was cut in the 2012 budget from €18 million to €14 million in 2013, with some €3 million transferred to the Sheep Technology Adoption Programme scheme, STAPS. Payments at farm level reduced from about €8.50 per ewe to €6.35. Under Food Harvest 2020, the Government has set down a modest growth target for the sheep sector of 20% in output value by 2020. If ewe numbers start to decline again at farm level, which is feared as a result of the loss of the sheep grassland scheme, this target is unlikely to be reached. As part of the current CAP reform, IFA put forward proposals for a coupled payment for the sheep sector. The Minister, Deputy Coveney decided not to go down this route. The problem with the proposal for the Minister on the sheep grassland scheme are very clear. He has proposed to abolish the scheme and have the 2014 payments added on to the single farm payment of the flock owner in 2015 and future years. For farmers above the average single farm payment, the sheep grassland portion of this payment will be eroded over time up to 2019 as payments converge downwards. For farmers with lower single farm payments, the value of the sheep grassland payments will also be eroded as their payment move up towards the average. Specifically, farmers under the minimum single farm payment will lose the entire value of their grassland scheme payments as their payments will move up to the minimum of €150 per hectare by 2019 regardless of the grassland scheme change.

The IFA has highlighted this problem since the announcement by the Minister in January. IFA representatives have also met the Minister and explained the problem in detail. We have specifically highlighted the problems with convergence. The Minister indicated that he did not want to introduce a coupled payment or to move funds from Pillar 1 to Pillar 2, however he accepts there are problems for sheep farmers with the current proposal and stated he would re-examine it.

Against this background the IFA has proposed that the total funding under the sheep grassland scheme be restored to the original €18 million as part of the single farm payment of flock owners going forward from 2015. Additional funding to go towards compensating farmers against the loss as a result of convergence. For farmers on the minimum payment by 2019, it is essential that their grassland payment is fully protected over and above the minimum payment level as they would have been entitled to this basic level of payment without the sheep grassland scheme add on. Today, the IFA is requesting the full support of this committee to restore the value of the sheep grassland scheme to €18 million as part of the single farm payment of sheep farmers in the new CAP and to protect the benefits of the scheme for Irish sheep farmers and the Irish sheep sector.

I thank members for their support.

Andrew Doyle (Wicklow, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I thank Mr. Lynskey and I invite Deputy Ó Cuív to ask questions.

Éamon Ó Cuív (Galway West, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I welcome the delegates. I listened with interest to what Mr. Lynskey had to say. The Minister gave some indication that he would look at this again. What was proposed was a monumental mistake. Does Mr. Lynskey have figures for the number of hill sheep as opposed to the number of lowland sheep - is it like comparing chalk and cheese? The vast majority of genuine hill sheep farmers would suffer a 100% loss because they would be under the €100 per hectare and for them it would not be an erosion but the total loss of the payment.

Let us presume the Minister will have €18 million. He has told us what he will do with Pillar 2, but he seems to be about €400 million shy of spending it all and that he could afford to give a much larger coupled payment for sheep, if he so desired and still be within his total ceiling of €3.77 billion under Pillar 2. Based on the figures we have got to date, it seem there will be no way he can spend all the Pillar 2 money between now and 2020. It does not stack up. We should be looking for a considerably larger coupled payment from what Mr. Lynskey proposed for the sheep sector today for the following two reasons: first, as otherwise sheep on the lowlands are not competitive, so people will move from sheep to other enterprises; and second, the people in the hills have no choice except sheep. I would be interested to have feedback on those issues. We can all concur with Mr. Lynskey that what has been proposed was badly thought out. I have no doubt but that the Minister is aware of that by now.

I wish to raise a final issue. When the Minister comes in with new schemes, he seems to attach many new conditions to them. The grassland scheme was great because one got the cheque and that was it. There was no more to it. There was not even an application form for the scheme. It was the deluxe of all simple schemes. One got money for having sheep on the basis of a census. Did the association have any discussions with the Minister to try to warn him off making this a really complicated scheme? Did the witnesses advise against the imposition of all sorts of conditions that would inhibit people from taking part in it? The great advantage of the scheme was that everybody got paid on the basis of a census.

Andrew Doyle (Wicklow, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Does Mr. Lynskey want to answer those questions?

Mr. John Lynskey:

Mr. Kinsella and I will try to do so. We were asked for the hill sheep figures. I am aware that 80% of sheep farms are in disadvantaged areas, but I cannot provide an exact breakdown of that with regard to hill sheep. Many hill sheep farmers have low land as well. They own it or they rent it. I think it would be difficult to get an exact figure for hill sheep. When one examines those figures-----

Éamon Ó Cuív (Galway West, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

They would be able to give the figures in question to the association. They know the people on the mountain land. There are three classifications: severely disadvantaged areas, less favoured areas and mountain areas. I think we can take it that virtually all the blackface sheep are on the mountains.

Mr. Kevin Kinsella:

I understand there were between 13,000 and 14,000 hill sheep farmers in the past. I hope those figures, which I have provided off the top of my head, are correct. I remember examining this matter when the sheep grassland payment was being introduced. If I recall correctly, there were approximately 700,000 hill ewes at the time. That figure may have fallen since then. I imagine that it would have. I have given some figures I recall from the past but I do not have the up-to-date situation. As Deputy Ó Cuív has said, the Minister would have those figures available to him.

I agree with the Deputy's second point. Our first position in the CAP reform was that we wanted to see a strong coupled payment for the sheep sector. We took that approach on the basis of our belief that the sector is vulnerable. We feel that the sector, like the regions in which it is based, needs strong support. That is why the IFA was strong in calling for a coupled support. That did not happen - the Minister chose not to go down that route. We would contrast that with what is happening at present in France and other places, where a coupled payment of approximately €20 per ewe is being considered. We feel that type of support is needed in this sector. The Minister has made it clear to us that he will not go down that route.

The Deputy's final point related to the conditions associated with the various schemes. From a farming perspective, schemes tend to have too many conditions. The proposal on the table right now involves abolishing the sheep grassland payment and moving it into the single farm payment. The Minister is claiming that for technical reasons, he cannot provide for a sheep grassland payment under the new single farm payment scheme if he is to stay within the regulations. He is saying he has to treat everyone the same way in terms of convergence. It is obvious that on the road to convergence, some people are coming up and some people are coming down. It is against that background we are seeking the support of this committee for our proposal that the funding which was available for the sheep grassland payment should be restored and made available to compensate sheep farmers - and the sheep sector as a whole - for the loss over time that will occur as a result of convergence. That is the case we are making to the committee.

Éamon Ó Cuív (Galway West, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I would like the witnesses to clarify a technical point. We know that the farmer gets the entire Pillar I payment.

Mr. Kevin Kinsella:

Yes.

Éamon Ó Cuív (Galway West, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

As I see it, he has three options. The option that was chosen up to now was crazy. The second option is to subsume the payment in the manner that has been proposed. This would make it necessary to find another €18 million in Pillar II. I believe there is a significant built-in underspend in Pillar 2. The third option is to move the money from Pillar 1 to Pillar 2 so that it can be allocated as a grassland coupled payment under Pillar 2. Am I right to suggest that those are the three options?

Andrew Doyle (Wicklow, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Can the witnesses clarify whether it was a Pillar 1 payment up to now?

Mr. Kevin Kinsella:

It most definitely was a Pillar I payment. It is still a Pillar 1 payment today.

Éamon Ó Cuív (Galway West, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Unspent funds.

Mr. Kevin Kinsella:

The Minister's intention is to keep it as a Pillar 1 payment.

Andrew Doyle (Wicklow, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Unspent.

Mr. Kevin Kinsella:

He has said to us that it is not his intention to move any funds from Pillar 1 to Pillar 2. Of course it is open to the Minister to decide to increase the payments for the sheep sector under Pillar 2. That option is always open to him. He can do that if he wishes. We represent the sheep sector, so it is natural that we would like to see that. The Minister is making a decision on the sheep grassland scheme at the moment. He is saying he will subsume the payment that is made under the grassland scheme into the single farm payment of sheep farmers in Pillar 1. We are saying, against that background and in the context of the Minister's decision, that we want to protect the €18 million that is available for the sheep grassland payment. We need to be clear on what we are saying.

Martin Ferris (Kerry North-West Limerick, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

Do the witnesses think it is possible to protect that €18 million by moving the grassland scheme into the single farm payment? Do they have any methodology in mind that could protect it?

Mr. John Lynskey:

If the fund is increased to €18 million, the extra funds will help to reduce the effects of the convergence of the approximation model.

Martin Ferris (Kerry North-West Limerick, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

Right.

Mr. John Lynskey:

That is fine for farmers who are above the average, or slightly below it. There is a problem with farmers on the minimum payment, however. Their single farm payment will be increased to €150 per hectare with the help of the grassland payment. That is like asking people to pull themselves up by their own bootstraps. If the grassland scheme is not held as a stand-alone payment that the farmer can see, it will be completely lost to farmers who are on the minimum payment.

Martin Ferris (Kerry North-West Limerick, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

I understand the point Mr. Lynskey is making. The association's presentation referred to the increase in stock, particularly with regard to ewes, between 2010 and 2012. It seems that this was followed by a decline of 3.1% from 2012 to 2013.

Mr. John Lynskey:

The correct figure is-----

Martin Ferris (Kerry North-West Limerick, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

The reduction in breeding stock was 1.2%.

Mr. John Lynskey:

Yes.

Martin Ferris (Kerry North-West Limerick, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

The reduction in overall sheep numbers was 3.1%.

Mr. John Lynskey:

Okay.

Martin Ferris (Kerry North-West Limerick, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

If the support systems are not in place, the projected targets for Harvest 2020 will not be met. Have these points been made to the Minister?

Mr. John Lynskey:

Yes.

Martin Ferris (Kerry North-West Limerick, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

What has been his response?

Mr. John Lynskey:

In his most recent response, he said he would re-examine the grassland scheme.

Martin Ferris (Kerry North-West Limerick, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

He has not signed off on getting rid of the grassland scheme.

Mr. John Lynskey:

No. He has said he will re-examine the matter.

Martin Ferris (Kerry North-West Limerick, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

In effect, the association is asking us, as elected representatives, to try to ensure the grassland scheme is maintained at €18 million.

Mr. Kevin Kinsella:

We want the funding for the grassland scheme to be maintained at that level.

Martin Ferris (Kerry North-West Limerick, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

Okay. That is fair enough.

Mr. John Lynskey:

In addition, we want to find some means of ensuring the minimum payment is not lost through convergence.

Thomas Pringle (Donegal South West, Independent)
Link to this: Individually | In context | Oireachtas source

As the witnesses have said, the Minister has made it clear he will not introduce a coupled payment and does not intend to move funds from Pillar I to Pillar II. He has ruled all of that out. He is going back to look at it again. It seems that the only option is to provide for the grassland scheme through Pillar II. This third option was outlined by Deputy Ó Cuív. Would it be acceptable if the Minister were to ring-fence €18 million under Pillar II in such a manner?

Mr. Kevin Kinsella:

I wish to make it clear that the Minister has said he will not introduce a coupled payment. That is what he has said on the record. He said it across the table to us. As I understand it, he said it publicly at the sheep conference in Athlone as well. I heard him say it. Our first preference would be to have a strong coupled payment in the sheep sector.

What we are trying to ensure here is that the original €18 million in the sheep grassland scheme is not lost within Pillar 1. If the Minister proceeds with his proposal as it is today, that is what will happen regardless of what will happen in Pillar 2. Committee members need to be clear on that. If the Minister proceeds with what he is doing today, the €18 million will be lost by 2019 in Pillar 1. We are asking the committee to support us in our efforts to increase that money from €14 million to €18 million and try to protect that for the sheep sector as much as we can.

Thomas Pringle (Donegal South West, Independent)
Link to this: Individually | In context | Oireachtas source

The only way to protect it is for it to be coupled.

Mr. Kevin Kinsella:

Ultimately, the only way to protect it forever is for it to be coupled but one can protect an element of the payment to sheep farmers if one increases the funding, which is what we are asking for.

Thomas Pringle (Donegal South West, Independent)
Link to this: Individually | In context | Oireachtas source

Mr. Kinsella made the point, which makes perfect sense, that it will be lost for farmers above the average because they converge downwards.

Mr. Kevin Kinsella:

It is important to note that it will not all be lost. There is a movement. Not everybody will end up at the average. Where it would all be lost is in respect of the people who are on the minimum. We specifically asked for it to be protected for those people.

Thomas Pringle (Donegal South West, Independent)
Link to this: Individually | In context | Oireachtas source

The way to protect it is to couple it.

Mr. Kevin Kinsella:

Yes, but the Minister said he is not going to couple it.

Thomas Pringle (Donegal South West, Independent)
Link to this: Individually | In context | Oireachtas source

That is what I am getting at.

Mr. Kevin Kinsella:

One could say that by 2019 we will bring the people on the minimum up to €150 per hectare, which is what the Minister is saying, and ensure there is an add-on of €1,000, €1,500 or €2,000 to their single farm payment. One could say that whatever their sheep grassland value is today, we will make sure this will be there. It does not have to be coupled per se.

Thomas Pringle (Donegal South West, Independent)
Link to this: Individually | In context | Oireachtas source

Is it possible to do that under Pillar 1?

Mr. Kevin Kinsella:

We are asking the Minister to look at that and see if it is possible.

Andrew Doyle (Wicklow, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Deputy Barry indicated that he wished to speak.

Tom Barry (Cork East, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I welcome the witnesses. In respect of their figures, they mention a total production of 56,000 tonnes, 45,000 tonnes of which are exported. On the next page, they state that land consumption and the domestic market accounts for 16,500 tonnes so I am missing 5,500 tonnes, which is an error of about 10%. Could the witnesses explain that?

Could the witnesses give some numbers relating to what they ask for? There are some of us who are losing out dramatically - over 30% of our single farm payment. This is being moved across to parts of the country that do not have payments, correctly so because it is balancing it out and possibly righting an historical wrong. It is something we find hard to swallow but we must do so. The witnesses say that people on a minimum payment need to be addressed. Should we not look at the total farm payment so that while this is an element of it, certain farmers will be receiving extra funds? I would like to see the numbers the witnesses are making the case for. If they make a case for this scheme here, is there not a case for the people who receive compensation for their beet because that was a payment over the top which included their single farm payment? Are we not opening up a can of worms? Could the witnesses back the numbers with the payments? Perhaps there are not many farmers here and perhaps there are many farmers with very little but given that we are moving such a big tranche of payments predominantly to farmers with smaller payments, are they not already being compensated?

Mr. John Lynskey:

Let us take the example of three farmers who are on a minimum payment for whatever reason. One of them has a suckler set up and the other could be growing proteins. They would be brought up to the average payment of €150 per hectare and get their supports on top of that. What we are looking for is for sheep farmers to be brought up to the average payment and to also get their supports on top of that. I hope that answers the Deputy's second question adequately.

Tom Barry (Cork East, Fine Gael)
Link to this: Individually | In context | Oireachtas source

No. If farmers have had a very small payment to date, for example, a payment of €2,000 or €3,000, the fact that they have a large tranche of land and payments are being moved over to raise them to €150 per hectare means that their overall farm payment will rise significantly. There is no demand on a farmer to have a significant stock of sheep to match that payment increase. Will some farmers gain disproportionately? Should we be looking at protecting the ones who are very marginalised?

Mr. John Lynskey:

As I pointed out-----

Tom Barry (Cork East, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I am looking for the witnesses' numbers.

Mr. John Lynskey:

The point I am making relates to looking at it on a hectare basis and looking at the value of the per hectare payment rather than the value of the overall payment. As the Deputy probably realises, the farmers about which we are talking about are on very low overall payments. Even when they come up to the payment of €150 per hectare, they will still be on a low payment. There would be a complete absence of support for the sheep industry if it is subsumed. If their payment is brought up to €150 with the help of the grassland payment, the support will be completely lost because if they never had a sheep or grassland payment, it will be brought up to that figure without the grassland payment at all but the grassland payment is used to bring that figure up.

Andrew Doyle (Wicklow, Fine Gael)
Link to this: Individually | In context | Oireachtas source

The second question was the first question.

Mr. Kevin Kinsella:

Yes, the second question was the first. There is a significant difference between the sheep and beet sectors. What we want to do is maintain the sheep sector. We have a chance to maintain it. Unfortunately, there is no beet sector. My next point relates to a point made by Deputy Martin Ferris. We would argue that we have stabilised our ewe numbers at this stage. If through this change, ewe numbers start to fall again, we will become very concerned. We think we will lose critical mass which we need to be able to maintain the processing plants and service the markets we are in. If we were to lose another couple of 100,000 ewes, which might happen, suddenly we are not able to be a substantial player in places like France and the other markets we are in so that is an important issue.

In respect of Deputy Barry's first question, it is set out very clearly in figure 2, which is a Bord Bia figure. The difference between the figures relates to the 4,000 or 4,500 imports that come into the system.

Tom Barry (Cork East, Fine Gael)
Link to this: Individually | In context | Oireachtas source

So those are the imports?

Mr. Kevin Kinsella:

They make up the difference, roughly speaking. I think we still might be out by 500 tonnes. The situation is very well set out in a good flow chart from Bord Bia.

Pat Deering (Carlow-Kilkenny, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I go back to the figures mentioned by Deputy Barry. Roughly speaking, how many sheep farmers will approach the average and how many will be below it? What I am trying to find out is how many will gain substantially from the convergence process and how many will not gain. I am looking for rough figures. It is a numbers game. We are talking about €18 million annually. Is that correct?

Mr. Kevin Kinsella:

Yes.

Pat Deering (Carlow-Kilkenny, Fine Gael)
Link to this: Individually | In context | Oireachtas source

The question of where it comes from is a big issue. That is really it.

Mr. Kevin Kinsella:

Yes.

Pat Deering (Carlow-Kilkenny, Fine Gael)
Link to this: Individually | In context | Oireachtas source

In respect of topping up the basic payment as it will be in the future, are we not talking about a top-up payment for sheep farmers? It might not be a good choice of words but-----

Andrew Doyle (Wicklow, Fine Gael)
Link to this: Individually | In context | Oireachtas source

That is the Deputy's question.

Mr. Kevin Kinsella:

I will be quick because I am conscious of time. There are no figures setting out precisely how many go up and down. I think Teagasc did some work on this in the past. Of 30,000 sheep farmers in the country, about 10,000 are losing and 20,000 are expected to gain to a greater or lesser extent. In response to Deputy Deering, I cannot say how many would gain under the actual minimum but I think that gives him an idea. I would not necessarily agree with the Deputy's second point that it is a top up. The sheep grassland scheme is in existence at the moment. It was €18 million.

It has been reduced to €14 million. We want it back at €18 million because we consider it sheep money. We want to find the best way to protect it as best we can for sheep farmers. Since it is already in the system, we are not necessarily taking money from anyone else.

Pat Deering (Carlow-Kilkenny, Fine Gael)
Link to this: Individually | In context | Oireachtas source

It must be taken from somewhere else.

Mr. Kevin Kinsella:

It originally came from unused single farm payment money. The Chairman and others will recall the IFA's campaign to try to capture that money. There was all-party support for our campaign.

Pat Deering (Carlow-Kilkenny, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I just wanted the background.

Mr. Kevin Kinsella:

When there was no money, the sheep sector needed support. A long, hard campaign was fought. Mr. Henry Burns was the chairman of our sheep committee at the time. The payment was lobbied for over a two or three-year period. As a result of the Fischer Boel reforms and the health check, unused single farm payment money was identified and the Government decided to provide it to the sheep sector.

Andrew Doyle (Wicklow, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Deputy Penrose and Senator O'Neill will contribute next.

Willie Penrose (Longford-Westmeath, Labour)
Link to this: Individually | In context | Oireachtas source

This issue exercises everyone in the midlands, not just sheep farmers. The chairperson, Mr. Eunan Bannon, is exercised by it. Does it not boil down to devising an appropriate mechanism for delivering the equivalent of the grasslands scheme to sheep farmers, thereby ensuring the scheme will not be subsumed by the new single farm payment scheme? Perhaps I am misreading, but must an additional €3.5 million or €4 million be found or will the €14 million be subsumed into the new system? The original figure was €18 million. It is critical that the money be made available.

I support the concept, as many sheep farmers would suffer under the proposed system, which is off the wall. I hope that a proper system can be devised that reflects this important sector. Sheep numbers can drop quickly. The midlands have suffered severe reversals. Sheep numbers were important to mixed enterprises.

This boils down to a question of money. Will the €3.5 million or €4 million be additional and will the €14 million be maintained but subsumed? The IFA wants it to be separate and topped up by €3.5 million before a system is devised to ensure the payment continues without being impacted in the way Mr. Kinsella described.

Mr. Kevin Kinsella:

I broadly agree with Deputy Penrose. The Minister has stated he will take the existing €14 million and pay it into sheep farmers' single farm payments, not everyone's. "Yes" is the answer to the Deputy's question. To keep the proposal as simple as I can, we are asking that the amount be restored to €18 million.

Willie Penrose (Longford-Westmeath, Labour)
Link to this: Individually | In context | Oireachtas source

A further €4 million.

Pat Deering (Carlow-Kilkenny, Fine Gael)
Link to this: Individually | In context | Oireachtas source

The IFA is only seeking €4 million, then.

Mr. Kevin Kinsella:

Yes.

Willie Penrose (Longford-Westmeath, Labour)
Link to this: Individually | In context | Oireachtas source

That was my question.

Pat O'Neill (Fine Gael)
Link to this: Individually | In context | Oireachtas source

I thank the gentlemen for their presentation. The sheep sector has always lost out under Common Agricultural Policy, CAP, reforms. When there were problems with the suckler herd, the Minister tried to keep people in that business, for example, by introducing genomic schemes, etc. In the EU, unfortunately, one cannot get money for nothing. The only possible approach is a payment coupled to improvements in quality, breeding, etc. The IFA might suggest a scheme in that regard.

Technically, the €3 million reduction is still in the sheep industry, as it was invested in the sheep technology unit. I have examined the figures. The IFA asserts there are 34,000 sheep farmers in Ireland, with a little more than 3,500 participating in the sheep technology programme. In other words, 30,000 people are not benefiting from the €3 million. The IFA must devise a scheme, after which it will be for us to lobby the Minister through this committee or so on to ensure people stay in sheep production. Numbers are decreasing. If we are to reach the Harvest 2020 targets, the sheep industry must be a part of the overall picture. An improved breeding scheme or the like could justify the payment.

Mr. Kevin Kinsella:

Senator O'Neill is correct about the sheep technology adoption programme, STAP, figures, in that the money only goes to a couple of thousand farmers. Conversely, the grassland payment goes to 27,000 or 28,000 farmers.

We would love stronger support for the sheep sector. I appeared before the committee several months and years ago seeking support for a strong coupled payment for the sector. That was the IFA's proposal on CAP reform. However, the bus has moved on and the Minister has decided not to introduce a coupled payment for the suckler and sheep sides. He has indicated he will take between now and Easter to make a decision. We are trying to find a way of retaining as much of the sheep grassland payment for sheep farmers in Pillar 1 as we can. We will undoubtedly revert to the committee about what will be required and how Pillar 2 might be constructed, but the urgency now is in trying to find a solution. The Minister has stated he is open to proposals. For that reason, we are before the committee to get members' support for restoring the funding to €18 million. This is our proposal.

Pat O'Neill (Fine Gael)
Link to this: Individually | In context | Oireachtas source

Would the IFA drop the STAP?

Mr. Kevin Kinsella:

Absolutely not.

Pat O'Neill (Fine Gael)
Link to this: Individually | In context | Oireachtas source

So, the €18 million-----

Andrew Doyle (Wicklow, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Allow Mr. Kinsella to respond, please.

Pat O'Neill (Fine Gael)
Link to this: Individually | In context | Oireachtas source

I just want to ask a supplementary question. The figure would be €18 million plus the €3 million in the STAP.

Mr. Kevin Kinsella:

Our plan for the STAP involves a great deal more than €3 million. There is a substantial budget for it under Pillar 2 of the new CAP. We will try to augment its position from 2015 onwards.

Pat O'Neill (Fine Gael)
Link to this: Individually | In context | Oireachtas source

People must join the scheme. If they do not-----

Andrew Doyle (Wicklow, Fine Gael)
Link to this: Individually | In context | Oireachtas source

They must sign up to it.

Pat O'Neill (Fine Gael)
Link to this: Individually | In context | Oireachtas source

-----the money cannot be drawn down.

Mr. Kevin Kinsella:

Yes.

Andrew Doyle (Wicklow, Fine Gael)
Link to this: Individually | In context | Oireachtas source

They are not forced to sign.

Denis Naughten (Roscommon-South Leitrim, Independent)
Link to this: Individually | In context | Oireachtas source

It is important to remember the background to the sheep grasslands scheme. There was a crisis at the time, in that we were haemorrhaging ewe numbers. It is happening again. Kepak has closed its Hacketstown plant, one of the largest sheep slaughtering facilities in Europe, because the numbers are not present. Matters will worsen significantly unless we acknowledge and address the problem.

Mr. Kinsella stated the payment could be protected by returning it to €18 million. He might elaborate. In fairness, the Minister has acknowledged the difficulty. At the conference in the Hodson Bay Hotel in Athlone, he stated that he would revisit the issue. We need to work together to devise a solution that addresses the issue and ensures sheep farmers benefit directly. Surely that would involve the introduction of a mechanism whereby the top-up would occur after convergence, in that the sheep grassland scheme would be left as an add-on payment as the Minister proposed, but the convergence calculation would be made beforehand. Would this not resolve the issue for everyone, including the Minister? He has stated he will not opt for a coupled payment. I understand where he is coming from in that regard, but the beef industry has a new genomics scheme and there are other supports across the board. The sheep sector needs a specific support if we are to keep ewe numbers up, particularly in my part of the world. The last thing we want to see is more sheep slaughtering facilities being closed, as it means we will have a problem meeting our supply contracts, particularly into the French market.

Mr. Kevin Kinsella:

I agree with Deputy Naughten and thank him for his support. Increasing the funding will only partially protect the money in the single farm payment, but if we do not do that it will be eroded further. That is the fundamental point.

Second, of course there are options and other things the Minister can do in Pillar 2 but that is a debate for a different day. Today we are discussing the sheep grassland scheme, which is a Pillar 1 payment. Naturally we would like to pull it out and keep it separate. That was the original IFA proposal to the Minister but he says that technically he cannot do that. We are trying to find a way whereby we can protect as much of it as we can for the future. It is not a perfect solution.

Éamon Ó Cuív (Galway West, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I mentioned hill sheep versus lowland sheep because they are basically two different industries. They are separate. I have a number of questions. Did the Minister give any coherent reason as to why he will not move the money from Pillar 1 to Pillar 2? There is no point in the Minister saying he will not do it, he must give a reason for not doing it. Did he give any coherent reason as to why he is opposed to a coupled payment? Is it an article of faith or did he put forward a logical reason for not favouring a coupled payment? In the case of suckler cows he is paying on the calves but it is effectively a coupled payment, because he will pay on every calf. I am curious about the reasons he gave in those two instances.

Third, do the witnesses accept that even with the €18 million input, the farmers who are over €150 will lose 30% of whatever money is there by convergence, but the farmer under €150, which would include virtually every hill farmer in the country, will lose 100% of that money between now and 2019, unless he can be brought up to €150? There is an easy way to do that. With a stroke of a pen one can make it €150, €160 or €155, but the Minister would have to do that for cattle and sheep for people with very low payments, by saying he will go beyond the 60% minimum payment. He could do it easily, but I am not sure that he can raise the minimum solely for sheep farmers. He could raise the minimum, and raise it to anything he wishes. That might not be a bad idea. What do the witnesses think of that?

Would the witnesses agree that the reason for the low take-up of the sheep technology scheme is that there is very little outside professional knowledge or help regarding pure blackface sheep? Teagasc has some input but, to a certain extent, that sector for the 40 years I have been dealing with it has been left to its own devices. Importing softer breeds into some of the more severe mountains is not a great idea. People from the outside have come up with fancy plans. My first job was to build a sheep fattening station for 2,000 sheep and put 2,000 blackface lambs into it. At the time it was thought to be a great idea but it did not quite work out for many reasons. Then one flies them live to Italy by hiring 737 jet aircraft, filling them with sheep and flying them to Milan. Then halal started killing them. The reality is that we have not really arrived at a solution for how to arrive at a proper carcase weight lamb from the mountain to have sustainable markets either in Portugal or Italy. Certainly, they do not make the French market.

Are the witnesses still pursuing the proposal they made in their document? It was that Bord Bia, Teagasc, farmers, the Department of Agriculture, Food and the Marine and the processors should get together to try to devise a lamb production system for the hills and a common marketing brand for all blackface hill lambs, by looking at the market requirement and examining how to produce that lamb and, if necessary, produce hoggets rather than lambs to achieve a sustainable sale for mountain lambs, something that has failed during the last 40 years.

Mr. Kevin Kinsella:

On the first point raised by Deputy Ó Cuív, I will not outline why the Minister did this or that. In fairness, the committee can invite the Minister to appear before it and members can ask him-----

Éamon Ó Cuív (Galway West, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Did he give any reason?

Mr. Kevin Kinsella:

-----what decision he made. He has made his decisions about CAP quite well known.

Éamon Ó Cuív (Galway West, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

With no disrespect, did he give the witness a reason?

Mr. Kevin Kinsella:

What we are saying today is that there is an issue with the sheep grassland payment. We have brought it before the committee and highlighted it. We have outlined the problem to the Minister and he said he will look at it again, and we are seeking the support of this committee to try to drive that forward.

On the issue of the minimum payment, under our proposal, and we are quite specific when we address the issue of sheep farmers and the minimum payment, they would not lose. We are saying that we want the people who are on the minimum payment to get the sheep grassland scheme on top of their minimum payment. That is what we have suggested in our proposal. The chairman, John Lynskey, will address the breeding question.

Éamon Ó Cuív (Galway West, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Is that legal under the regulation?

Andrew Doyle (Wicklow, Fine Gael)
Link to this: Individually | In context | Oireachtas source

It is almost 3.30 p.m. Deputy and we must conclude. We have given it a fair hearing.

Mr. John Lynskey:

On the question about the hill breeds, we met with Meat Industry Ireland on this issue. There is a realisation that work must be done on the breeds. There is a pilot programme in operation with John Noonan, the adviser in Westport, and Sheep Ireland to pick out the best breeds of the hill sheep so in the future the best rams will be available. Also, the hill sheep are the basis for the breeding flock. The Mayo Mule and Greyface breeders hold very successful sales of the mule sheep, which is a cross breed of the hill sheep and the blue Leicester. There is also work being done on what is called the Hilltex breed, which is a Texel crossed with a hill ewe to give a carcase that is suitable for the French market, even at the lower end of it. Work is being done on a number of issues in that regard.

However, the issue today is to try to get the maximum support available to the sheep sector from 2015 and if our proposals in the presentation can be worked on and agreed. If we could get the support of this committee, we would welcome it.

Andrew Doyle (Wicklow, Fine Gael)
Link to this: Individually | In context | Oireachtas source

There is merit in what Deputy Naughten said. I have also suggested it. For the purposes of convergence, if one disregards the grassland component of it, one could move up and move down, add it back and have it disregarded for the purpose of the calculation of convergence. It is not necessary to top-up the money. It could be done without the €14 million being touched. That is my opinion.

I thank the witnesses for their attendance and presentation to the committee.

Before suspending the meeting to allow the witnesses to withdraw, it has been brought to my attention that our colleague, Deputy Nicky McFadden, has passed away. On behalf of the committee members, I extend our sympathy to her family. There are expressions of sympathy taking place now in the Dáil. For those of us who knew her well this is a sad occasion.