Andrew Doyle (Wicklow, Fine Gael)
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I welcome the Minister and his officials and I thank them for appearing. The Minister will brief the committee on two items, the agenda for the Agriculture and Fisheries Council next week and his views on the sub-committee on fisheries report on promoting sustainable rural coastal and island communities. The Minister has an hour and three quarters and I will try to divide the time equally between both items.

Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the Houses or an official either by name or in such a way as to make him or her identifiable.

I call the Minister to make his presentation.

Simon Coveney (Cork South Central, Fine Gael)
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Next week's meeting will the final Council presided over by the Greek Presidency. Next month, Italy will assume the Presidency. As with all end of term Councils, the agenda is long. This reflects the custom at the end of each rotating Presidency to take stock of developments over the previous six months. The bulk of the items for discussion are progress reports outlining the state of play on dossiers discussed since January last or conclusions drafted by the Presidency for approval by the Council on those dossiers.

I am happy to go through the agenda but many of the issues are still being discussed in the preparatory body for the Council, the Special Committee on Agriculture, SCA, which is meeting in Brussels today to clear up technical issues and reach agreement on the less political points. This means that the final agenda for next week’s meeting may change in the light of developments today and members might bear that in mind as we go through the issues.

The first item is the future of milk policy. From Ireland’s point of view, the key issue for discussion is item 8, the report of the Commission on the development of the market situation in the dairy sector. Under the terms of the milk package, which is the set of accompanying measures agreed in 2011 to complement the exit from milk quotas, planned for next year, the Commission is obliged to submit a report to the Council by the end of June on the milk market situation and the functioning of the milk package. This report will only be released later and, therefore, I am unable to brief the committee on it but the key focus of discussion is likely to be on the Presidency’s proposed Council conclusions on the future of the dairy sector. A draft of these conclusions was discussed this morning at the SCA but the outcome was inconclusive. We will have to wait and see what happens before the Council.

The situation in the dairy sector has been discussed at every Council under the Greek Presidency. It is no surprise to hear that Ireland has been vocal during these debates. The position is that the Council is divided on the steps that should be taken in the run-up to, and following the abolition of quotas. Ireland is among an increasing number of member states that are arguing that the soft landing envisaged for expiry of quotas is not happening in all member states. It is certainly not happening here. We have lobbied for measures to be taken to address this, notably through an adjustment of the butterfat correction coefficient. Our allies on this include Denmark, the Netherlands, Germany, Austria, Poland, Luxembourg, Estonia, Belgium and Latvia. However, another large group of member states, including France, Spain, UK, Sweden and Italy, are opposed to taking action. Some are linking this issue to the policy direction to be taken after quotas expire - in particular France - and there are subtle hints that some, at least, would like to see the reintroduction of some form of supply control in case of a crisis in the sector.

I will argue strongly at next week’s Council for immediate action to address the short-term issue of the soft landing and I will be unequivocal in my opposition to reintroducing any form of supply control when quotas cease next April. I favour intensive monitoring of market prices and the rapid deployment of existing instruments such as intervention prices, aids to private storage and so on should a crisis occur. The key issue on the milk package, which is the most important issue for us next week, is countries that were not overly keen to abolish milk quotas are trying to use the butterfat correction coefficient to negotiate market controls post-quota abolition should the price fall. In other words, they would like countries such as Ireland, which are planning to increase output, to be curtailed from doing so should the price fall and we will vehemently oppose that. We have been preparing for four years for quota abolition. Our farmers have invested heavily, and continue to invest, to do this while our processing sector has spent the guts of €500 million in preparation for the change. Most of the markets we are planning to expand into with the increased volume we will produce are outside the EU. They include China, Russia, the Middle East, north Africa and so on. Even though we are planning for rapid growth, the overall percentage this will contribute to the Union's milk pool is relatively small. There will be price volatility in the diary sector, whether Ireland produces more milk, but we will not tolerate a scenario where Ireland will be penalised because it could become the fastest growing producer of milk in the EU following the quota abolition.

The problem is we are trying to negotiate the butterfat correction coefficient. That is the only flexibility the European Commission has without having to go back through a co-decision process to help ease us out of quotas. The commission has the power to change a technical measurement tool such as the butterfat correction coefficient and that would give a country such as Ireland an additional 2% in milk quota this year, which would help us reduce the super levy fine that many farmers will be subject to because they are planning for expansion by building their herds and so on. This year, we will not have the advantage of the additional 1% in quota that we secured last year and the year before as part of the soft landing policy, which is why the butterfat correction coefficient would be useful for Irish farmer to reduce the fines. I will answer questions on this later.

The next item is school fruit and school milk schemes, which are relevant to Ireland because they have helped to finance programmes such as Food Dudes and the milk scheme that has been available to primary schools.

Items 4 and 5 concern the Commission's proposal to merge the two separate EU-funded school schemes, the school milk scheme, promoting consumption of fresh milk, and the school fruit scheme, promoting consumption of fruit and vegetables among schoolchildren. The Presidency will present a progress report on this proposal. The key issues outstanding are the scope of products that should be eligible for these schemes and how funding for the school milk element will be allocated between member states. We favour broadening the scope of products to include cheese and yogurt. We also believe that funding for the milk element should be allocated on an objective basis according to the population of schoolchildren as a proportion of the overall population. Ireland is unusual in that it has more schoolchildren per head of population than any other country in the European Union. If not, we are certainly in the top two or three. School fruit is already allocated on that basis, but most member states would prefer allocation based on the historical use of funds, for obvious reasons.

The next issue relates to producer organisations in the fruit and vegetables sector. The Presidency will present draft Council conclusions on how the producer organisation provisions in the fruit and vegetables sector have worked since the regime was reformed in 2007. The draft conclusions welcome the Commission's report, share its assessment that producer organisations are spread unevenly across the EU, and highlight the need for a clear, unambiguous and simple set of rules for sharing best practice and the effective use of market management measures. We fully support the text. One of the ambitions of the new CAP between now and 2020 is to create stronger producer organisations that can negotiate collectively for farmers and primary food producers, and more effectively than has been the case in the past. That is not so relevant to the dairy sector, but it is hugely relevant in beef and fruit and vegetables.

The next item is an optional quality term, which is "product of island farming". I suspect that Deputy Ó Cuív and Deputy Pringle and some other Deputies from coastal communities that contain islands might be interested in this. The Presidency intends to present draft Council conclusions on the case for an optional quality term, "product of island farming". In other words, it would be a new category of food production in the European Union. Notwithstanding that a Commission report was sceptical about the benefits of such a term, some member states are keen on the idea, namely, Greece - whose Presidency it is, which is why it is pushing it. I have an open mind on this. While there has been no demand to date from island communities here for a particular labelling structure of this kind, I believe that we should do all we can to address the disadvantages associated with island farming. I have already shown my commitment to island farming by providing in the draft RDP for a top-up under the new scheme for areas of natural constraint. However, some member states are opposed to the idea of introducing an optional quality term for island farming, so we will wait and see what happens next week. If we can get something out of this for island communities in Ireland, I am all for it, but there are problems in terms of what it means for PGI status, for example. It is an issue where we should look for an opportunity. It does not solve all problems, but it is an option worth pursuing.

A possible item for discussion and adoption is a draft decision authorising the opening of negotiations on agreements between the EU and third countries on trade in organic products. This is about ensuring mutual recognition of organic production systems between the EU and third countries, with a view to enhancing the EU’s export opportunities and protecting against imports that are not authentically organic. This issue has existed for some time and we hope to resolve it.

Ministers will also have an exchange of views about the implementation of CAP reform at a national level, and I will be outlining Ireland’s plans in that regard. As the committee will know, I have made a number of detailed announcements concerning both Pillar 1 direct payments and our rural development plan. I thank the committee for its very useful submission on the RDP. I have already taken on board a number of its proposals, notably concerning organic farming, which will receive a significant increase in support, and locally led environmental schemes. We plan to expand what has worked - in the Burren, for example - to other parts of the country through a competitive process so that the best projects are financed. We also intend to support our on-farm investments and the new GLAS scheme as far as is possible within the funding envelope. I know that the committee had proposed higher top payments in relation to GLAS, but we are trying to get as many farmers into it as we can as well. Let us not forget that this is a scheme that, when it is fully up and running, will be worth about €260 million. I know that Deputy Ó Cuív is concerned about delays to payments, but perhaps we can deal with the detail of that when we have our question-and-answer session. I can assure him that there are no delays on our side.

Of course, the draft rural development programme is not finished yet, although we are at an advanced point. The strategic environmental assessment is under way, the consultation period for which closes on Monday. We aim to submit a draft RDP to the Commission by the end of this month and thereafter there will be a period of negotiation and discussion with the Commission before the plan is approved. That may take a number of months; in other words, we might not have the RDP approved until close to the end of the year. If one is opening a GLAS scheme and planning on bringing in 25,000 or 30,000 farmers, it will take a number of months to manage that many farmers applying for one scheme.

There are two fisheries items on the agenda that are of relevance to Ireland, but perhaps we can discuss fishing separately at a later stage. If there are any other questions that members have on LPIS, penalties or beef round tables, I will happily answer them, but I do not want to hog the entire meeting. Perhaps it is appropriate to open the meeting to questions at this stage.

Andrew Doyle (Wicklow, Fine Gael)
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As I said earlier, the second half of the meeting will be on the sub-committee's report, so I shall ask members to be as succinct as possible. Perhaps we could limit our questions or comments to three minutes each, because we have a substantial agenda to get through.

Éamon Ó Cuív (Galway West, Fianna Fail)
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On the milk situation, I note what the Minister said about efforts to reverse the policy. My main concern is that some people might become involved in huge investments in milk without doing proper price sensitivity tests and factoring in enough volatility. There is always a temptation on the part of people who go to invest to think that they have considered the best scenario and the worst scenario, but the worst scenario is not as bad as the really worst scenario. I would be worried particularly about young people investing without enough capital, being totally or highly dependent on borrowing and then running into trouble.

Will the Minister tell us how many children benefit from the milk and fruit schemes, and will the new proposal make it simpler to administer at a national level? Are the benefits of the scheme focused on those who are most in need?

On the term "island farming", can the Minister confirm that a farmer would have to produce and process on the islands? That is my understanding of it. If that is so, it is relatively irrelevant in the context of the Irish islands. A second issue is whether islands connected to the mainland by causeways and bridges might still be considered islands. One drives on to Achill Island via a bridge, for example. Can the Minister confirm that? Thirdly, what is the maximum size of island allowed? There was always great debate on this in Europe, where we have Sardinia, Corsica, Ireland and Sicily with 5 million people and so on. I am not sure that the idea is of any relevance to Ireland when one considers the scale of European islands.

The Western Isles and the Shetland Islands in Scotland are much bigger than our islands. Scotland has smaller islands but I am referring to the bulk of the islands. Will the Minister comment on this? I am not convinced it is hugely relevant. Store cattle produced on an island are taken to the mainland, as happens everywhere else. Other produce is minimal and is consumed on the islands.

My views on the CAP package are well known but I seek clarification on several issues. Under the GLAS conditions for commonages 50% of farmers must join on the same day for Tier 2. Is this active farmers on a commonage or all landowners? There is a huge difference between the two. Is this with regard to 50% of those who submitted an area aid application or 50% of those who own a share in the commonage? Whether or which, in most commonages this will be unworkable. Will it be possible to return to the individuality of the previous CAP? If we cannot do so the vast majority of commonage farmers will be locked out of the GLAS scheme. I cannot see the Minister getting 50%, or 80% for Tier 1, to join with a total farm on the same day. It is crucial to get clarification on this today.

Another issue which arises with regard to commonages is the regulation seems to contain an indication that a farmer who does not put sheep or cattle on the commonage would no longer be able to claim that land. In the past many farmers had a handy arrangement. For example, if Senator Ó Domhnaill and I were in a commonage and both of us also had enclosed land, and he had sheep on the commonage but I did not bother putting sheep there, which suited him because he could put more sheep there, until now both of us could claim a single farm payment on all our farms, like any other farmer, so long as they were in good agricultural and environmental condition. The regulation seems to indicate that if I did not actually put livestock on the commonage, even if it was kept in good agricultural and environmental condition by our combined efforts, I would not be able to receive any single farm payment, not only for the commonage but also for my own land. Is this a fact? The regulation seems to be less than specific but it seems to open up this possibility.

If the CAP opens at the end of this year, based on previous experience it will take several months to prepare plans and submit applications so farmers will join at some stage in 2015. From a reply the Minister gave to a parliamentary question the indications are the first payment of 75% would be received at the end of the first year of the scheme. This means, if one is lucky, one's first payment will be towards the end of 2016 and the 25% will follow in due course. This is if the Department can handle 25,000 applications promptly. It took the Department five or six months to handle 6,000 agri-environment options scheme payments.

Simon Coveney (Cork South Central, Fine Gael)
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There were reasons for that.

Éamon Ó Cuív (Galway West, Fianna Fail)
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Perhaps the Minister will explain them to us. It did take five months. If 30,000 farmers suddenly seek new GLAS plans the planners will have to work promptly. There are other factors which could cause delays. Time will prove me right that it will be late 2016 before the payments start to flow.

The Minister mentioned that much is in the rural development plan. Does he mean expenditure to the end of 2022? The Minister stated €260 million is available for GLAS. Does he mean for payments to the end of 2022 or 2020?

Farmers have been severely penalised because of the LPIS issue, which should not have happened because it was not the farmers' fault. They had no way of measuring with the accuracy now required. There seems to be a big issue with regard to Europe imposing penalties on Ireland which could affect the country's agriculture budget. Why did the Ministers, in the negotiation of the CAP, not revise dramatically the entire penalty regime to ensure it was not that severe on countries and individual farmers? It seems to be overly severe.

Martin Ferris (Kerry North-West Limerick, Sinn Fein)
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All of us share concerns about the abolition of the milk quota and the effect this will have if it does not work out to plan for people who have made large investments in preparation for it, such as expansion or intensification of production. The Minister's presentation makes clear the divisions between the big powers, with Britain, France, Spain and Sweden on one side and Germany on the other. The Minister also stated some will want to see the re-introduction of some form of supply control. The quota was the supply control. Has the Minister seen an indication something similar will be introduced to limit the-----

Simon Coveney (Cork South Central, Fine Gael)
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I do not want to give the impression every country wants supply controls post-quota because they do not. The UK does not. The countries seeking more supply control post-quota in the instance of price volatility are essentially speaking about Commission intervention in a way which would limit the growth potential of countries seeking to expand. This is something we cannot support. The UK is against the butter fat correction but it is not in favour of more supply controls post-quota, whereas Spain and France are. Different countries are in different positions. The Deputy is right that there is a strong block which is not overly keen on quota abolition, and it will seek significant market intervention tools for the Commission, which I do not believe is in Ireland's interest.

Martin Ferris (Kerry North-West Limerick, Sinn Fein)
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Is it fair to state the concerns regarding supply control are determined by the market value of the produce? Many people are concerned that an increase in production will mean the price will drop. At present milk prices are very good at 38 cent or 39 cent a litre, but just over a year ago the price was 23 cent or 24 cent a litre. Huge investment has been made on the island with regard to intensification and an increase in production.

The Minister stated he aims to submit the draft rural development plan by the end of this month, after which there will be a period of negotiation. Is it possible for the committee to have sight of this?

Simon Coveney (Cork South Central, Fine Gael)
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Absolutely, once we send it in. It is very close to what has already been published.

Andrew Doyle (Wicklow, Fine Gael)
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We asked that, once the draft plan's consultation period was over, the officials would brief the committee.

Simon Coveney (Cork South Central, Fine Gael)
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I have no issue with that in principle. The committee should know what I am sending to Europe. An environmental assessment is under way and we will engage in consultation at the end of this process, which will be Monday. We must try to take account of people's submissions and finalise the document by the end of the month. We also have a timescale for the Pillar 1 submissions on, for example, how we will manage direct payments for farmers. The date in that regard is August. We have a great deal of work to do in the coming months.

Pat Deering (Carlow-Kilkenny, Fine Gael)
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I share Deputy Ó Cuív's concerns about the potential difficulties created by the large investment being made by many newcomers to the milk scene. All one needs to do is read the front page of today's farming section in the Irish Independent. Glanbia has cut 2 cent per litre, sparking further price reductions. We are in line for a great deal of price volatility. If we are not careful, there could be a bubble similar to the one that existed in the building industry not so long ago. Not enough is being made of that prospect. If production is increased, there will more than likely be a reduction in price, yet the cost of production has not decreased.
For obvious reasons, the Minister was vague concerning the options on the table in terms of the butterfat coefficient. What could help to ensure an even softer landing?
Returning to the issue of price volatility, it will have an impact for a number of years. Will anything be put in place over the easing-in period following the quota's removal?
Turning to Common Agricultural Policy, CAP, reform and the green low-carbon agri-environment scheme, GLAS, the Minister stated that the Commission might not make a decision on the reform for a number of months. Will that delay the commencement of GLAS beyond this year?

Simon Coveney (Cork South Central, Fine Gael)
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We will get it before the end of the year, but I will answer the Deputy's question in more detail shortly.

Pat Deering (Carlow-Kilkenny, Fine Gael)
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A final issue referenced in the Minister's presentation but not in his speech is that of the beef roundtable discussions. These were welcomed at the time, but prices have continued to go through the floor, as highlighted in today's Irish Independent. Compared with last year, the average price for a steer has fallen by €300 and the average price for bull beef has fallen by more than €400 per head. Are Bord Bia and the Department doing enough to promote Irish beef in England and our other markets? Talk is one matter, but we need to walk the walk as well.

Tom Barry (Cork East, Fine Gael)
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I recently attended a presentation given by Dairygold.

Andrew Doyle (Wicklow, Fine Gael)
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The Deputy's telephone is on.

Tom Barry (Cork East, Fine Gael)
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Based on feedback from its suppliers, Dairygold is aiming for a 57% increase in its production. However, it only holds 0.6% of the market into which it is supplying milk formula and so forth. Even after its expansion, its share will decrease to 0.4%. This is a strong argument that there should not be price volatility in the markets into which co-ops supply. The co-ops will not affect the European market. We need to show where our co-ops are selling. We cannot allow a situation in which, even with an increase in production, our market share when we sell outside the EU decreases because of increases in demand.

I feel strongly about milk schemes in schools. We are not doing half enough in this regard. Children are not encouraged to drink milk and there are issues with sugar. What possibility is there of Irish products being promoted to children in schools?

The Minister mentioned single farm payment penalties. This issue keeps appearing. An independent commission should hear appeals. There is a growing concern among farmers that their only independent hearing will be before a court. That is not good enough. Has the Minister figures on the number of appeals in recent years that ended up in court and the cost and results of same? Perhaps what I am hearing does not bear out, but the figures would be interesting. We should have a proper discussion on the single farm payment's rules and their interpretation.

In light of farm audits, are internal audits of the inspectorate's procedures necessary? I have been approached with an increasing number of cases that I will bring to the Minister's attention. The issue is causing a great deal of concern and fear. The fines are draconian.

Will Pillar 2 not kick off until 2015?

Willie Penrose (Longford-Westmeath, Labour)
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I remember when headage and so on were introduced in respect of sheep. Coming from a drystock part of the country, all I saw in the midlands for six months was a mass invasion of sheep. Everything turned white. I use that situation as an example. I am apprehensive about what will happen in the dairy industry. There are Food Harvest 2020 targets and so on, but people might get into the industry who do not have the necessary expertise, technical abilities or appreciation of what lies ahead. The level of capital investment required is mind-boggling.

Deputy Deering referred to how dairy processors were reducing prices. Once one does it, we can be sure that the other three or four large processors will reduce their prices by the end of the week. The processors are defending this decrease on the basis of weaker international markets in the past six months. Two year ago, there was a rush into bull beef and it is now having consequences. People are picking up the pieces after significant losses. I am all in favour of the Food Harvest 2020 targets, but the Minister must ensure that Teagasc and everyone else are up to speed so that people do not walk into a disaster blindfolded. Deputy Ferris made this point. It is easy to make a considerable investment. Deputy Deering rightly referred to it as a bubble.

The Minister must continue to fight on the dairy front. If he can get the butterfat coefficient adjusted in the way he wants, it would lead to a 2% increase in the milk quota and represent a major victory. We should all support the Minister 100% in his efforts in that regard. He is making significant friendships and so on, which is how the system works. He has brought Germany, one of the large players, on board, but it is a pity that some of the others have not come on board as well.

In Europe, one needs two or three of the big players. There can be many smaller examples but the bigger players are required to bring something over the line. I wish the Minister well.
I have been a great proponent of the appeals system, and anybody reading the Dáil transcripts from 2001 or 2002 knows I spoke at length about it then. As a barrister, I had a particular interest in it. The Minister's Cork colleague, Mr. Joe Walsh, brought it through. I have had the view that there should be only one appeals system, which not only just looks independent, but is independent in practice. I have just come from a social welfare appeal this morning and that was independent; I represented a person and somebody else represented the Department. The system in question should have a quasi-judicial person from outside the agricultural sphere. As the record from 2002 shows - it is 12 years ago now - I was spokesperson for agriculture at the time and I still hold to that idea. It is funny how life can turn back in some ways. I remember attending an appeal process and setting a cat among the pigeons. I was representing somebody in a difficult appeal and I sought some record of proceedings because I intended to bring the matter further in the event of loss. An appeals process should take that into account, allowing a person the opportunity to bring it to the next stage in the event of dissatisfaction.
I am concerned about the fine, as the estimate is €170 million or €180 million. We are finding it difficult to get money to deal with issues at a human level so that is a significant sum to be absorbed from the national purse. It would be very difficult for an individual farmer to bear the brunt of this, as we know the national purse or the farmer will be the only two sources for the funding. I have a round figure and the Minister's number may be more exact, and that is why it is better for the Minister to come to the committee to inform us. Has the Minister considered how this can be appealed in order to lower the figure? This is critical to the Department's Estimates and everything could be thrown off kilter by these fines. I know it could take a while for the issue to be finalised, and the Minister, Deputy Coveney, could be the Taoiseach at that stage. The matter must be fought vigorously as the ex post factorationalisation of a position pertaining on the ground now is easy through micro-management but the Department and the farming community dealt with the issues in good faith at the time, based on the level of identification that could be worked out. People are now being punished because of better imaging, etc., so there is a strong legal argument to be made in that respect.

Michael Comiskey (Fine Gael)
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I apologise for leaving earlier and I may have missed some of the earlier contributions. Will we be ready for GLAS in 2015? There is also concern about the 80% figure for commonages, which would present a problem for some. A number of people on commonages may not get into the scheme. Where we have exported beef, particularly along Border counties, there have been penalties and those customers will not return to buy cattle. I know the Minister is probably dealing with the question of major penalties on animals which come from the South but are slaughtered in the North. It is a problem. There is a similar process here. There is also the question of the number of animal movements and the penalties applying when moving from one herd to another.

Andrew Doyle (Wicklow, Fine Gael)
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There must be clarification of the €180 million fine. There was considerable optimism about the beef round-table process but it appears to have run into a mire. Perhaps people are spinning but we need a genuine commitment from all sides to the beef industry.

Simon Coveney (Cork South Central, Fine Gael)
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There have been many questions and I would like to try to answer most of them. I will give the official position on the €180 million as I am very annoyed about it. We had a clear understanding with the European Commission that this would not happen, and we intend to fight this vigorously. I believe we will be successful.

My Department received a letter on 14 May from the Commission audit services indicating that it proposed to exclude €181 million from EU funding to Ireland in respect of the direct aid scheme years from 2008 to 2012, inclusive. In effect, this amounts to a 2% flat rate penalty on the funding received for all direct aid in Pillar 1 and Pillar 2 for the five years in question. It should be borne in mind that the amount of EU funds under review is in excess of €9 billion.

My officials attended a bilateral meeting with representatives of the Commission audit services on 25 July 2013 to discuss the finalisation of clearance audits covering five years of payments. During this meeting the Commission audit services was advised that we would review all land parcels in Ireland used for single payments and other direct aids, identifying and excluding all ineligible features. That is what was required as the mapping system allowed us to do so. The process would allow audits to be finalised based on the calculated risk rather than a flat rate correction, which is what the Commission is proposing. My Department reviewed the LIPIS database of 900,000 parcels and submitted the figures for ineligible features to the Commission on 5 February 2014. In other words, the process was completed as agreed. By that time, my Department had already commenced the collection of retrospective amounts from farmers to off-set any calculated bill. I was in constant discussion with farming organisations on this process, indicating that if we did not do this properly, we would be fined a flat rate figure. Many people questioned whether that was a serious threat but everybody knows now how serious it was. That is why we worked as thoroughly as we did, and we had formal and informal discussions about that more than once.

The Commission audit services carried out a conformity clearance audit in March this year to verify the extent of the control work completed on the LIPIS database. Following the audit mission, the Commission auditors confirmed both verbally and by e-mail that the correction would be based on an assessment calculated on risk, as previously discussed and agreed. The imposition of a 2% flat rate correction in the letter of 14 May by the Commission audit services was a complete surprise to me and is neither justified on the basis of the findings of the audit mission nor from the justifications that the Commission have relied upon or on which it has applied the flat rate correction.

I cannot be any clearer than that. This is part of a negotiated settlement and I have spoken directly with the Commissioner about this because of our total surprise arising from this. It comes against all the evidence we have from previous conversations, and it has been made very clear to me that this is part of a process in which we are involved to dramatically reduce any flat rate penalty that may apply to Ireland. We will vigorously defend our position because of the thoroughness we adopted.

That has not been without pain for farmers in Ireland in terms of both disallowances as a result of mapping accuracy and retrospective payments. We will certainly not sit back and allow a situation where we are penalised on the double. The €181 million is just the start of a long discussion. I can assure the committee we will not be paying anything like that if we make our case effectively, which we will.

With regard to milk, it is important to point out that the amount of milk Ireland produces will not dramatically change the world price for dairy. Consider what has happened in New Zealand since the mid-1980s when quotas were introduced in the European Union. In 1984, New Zealand produced the same amount of milk as Ireland. Both countries produced 5 billion litres of milk per year. We are now at approximately 5.5 billion litres while New Zealand produces 19 billion litres per year. New Zealand dominates the traded dairy markets globally. In that period it has quadrupled output and the price of milk is higher now than it has ever been.

The only way one can measure where the price is going in this sector is through what we anticipate global dairy consumption will be and what we anticipate global dairy production will be over the next five to ten years. At present, dairy consumption is increasing by approximately 2% per year and dairy production is increasing by between 1% and 1.5% per year. That suggests that in the longer term we will see strong pricing for milk. However, there will be ups and downs, depending on seasons, how much milk is in storage, Fonterra auctions in the United States, how much milk powder is put on the market and at what time and so forth. People should not panic when they see the milk price dropping by 2 cent per litre, although one does not like to see that. Farmers producing good quality milk are getting 48 cent or 49 cent per litre at present, but that will not be case forever. It will be up and down, and we must plan for that financially.

With regard to the point made by Deputies Deering and Ferris in terms of putting a business plan together and the investment, one of the downsides of the expansion in New Zealand is that many of its dairy farmers are essentially working for the bank, not for themselves. They will be working for the bank until they retire. We do not want a generation of Irish dairy farmers to be in that position five or ten years hence. That is the reason Teagasc is currently holding financial management seminars across the country specifically on dairy expansion and the business plan required for that. Teagasc is telling farmers to put their business plan together on the basis of 28 cent to 30 cent per litre for milk. It is being that conservative. I am not saying prices will go to that level but that we must be very cautious and conservative in the business plans we put together.

In my view, milk prices will be well above that figure. I believe that over the medium to long term there will be incremental increases in dairy prices, but there will be weak and strong periods and we must plan for that. We must look at different pricing models, for example. Dairy farmers should consider locking in 40%, 50% or 60% of their milk for two or three year pricing contracts, which are available now through the big co-operatives, so they can prepare for the volatility that may come. In case anybody thinks we are not planning for this, we are. I have met all the key banks in Ireland - there are effectively only three - and there is a very clear understanding of the banking responsibility here. Dairy farmers need capital to invest in expansion and growth, some of which will be grant-aid assisted through the new targeted agricultural modernisation scheme, TAMS, programme, but the banking system must be cautious as well and insist on proper business plans and efficiently run dairy farms.

On the cost of inputs for dairy farming, we can improve and we are improving. Yesterday, I launched the Carbery greener farm initiative. Over a one year period 20 farmers, by measuring inputs such as fertiliser, water, energy and feed costs, have saved an average of €5,000 per farm. The highest earner is over €10,000 while the lowest was approximately €3,000. There are significant things we can do in terms of efficiencies in running farms and managing more efficiently, both from an emissions point of view and also from an efficiency point of view in respect of inputs and outputs.

For almost five years we have been preparing farmers, processors and markets for a rapidly expanding milk production driven industry over the next five years. The previous Government started it and we have continued it. Yes, there will be some mistakes but I believe Ireland is as ready as it is going to be for the dairy expansion. It will provide a very exciting future for many dairy farmers.

I have a final comment on dairy. Some people have been inaccurately quoting how big our dairy herd will have to grow to deliver on the potential of Food Harvest 2020. There are approximately 1.2 million milking cows in Ireland. We anticipate that the figure will grow by approximately 300,000 between now and 2020, an increase of 20% to 25%. That means we will need 3,000 extra people physically milking cows. The rule of thumb is one person is required per 100 cows. That is the reason we are developing new courses for people who wish to go into the dairy industry, who do not have any land or herds but who wish to work with expanding farmers and their families in terms of increasing herd size and so forth. This is doable, but it must be planned and managed. However, regardless of whether we do that, there will be price volatility and what Ireland contributes to a global milk pool will not determine milk prices one way or the other. New Zealand over the last 30 years is a good example of that.

To refer to the other questions - I do not wish to be accused of ducking any - I agree in principle with what Deputy Ó Cuív said about island farming, but I mentioned it because I was seeking feedback on it.

Éamon Ó Cuív (Galway West, Fianna Fail)
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Is there a definition of island?

Simon Coveney (Cork South Central, Fine Gael)
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No, there is not. That is part of the problem. The Greek Presidency is trying to get agreement in principle here. Trying to define islands is one of the big problems we have had. I suspect that nothing significant will be decided next week, but let us wait and see. I will keep an open mind on it.

On the issue of commonages and the green low-carbon agri-environment scheme, GLAS, I wish to clarify the timing of GLAS. There have been some accusations in press releases and so forth suggesting that we are contributing to red tape and it is causing a problem. It is not. GLAS is the biggest new scheme in the rural development programme. The big demand from all farming organisations and all public representatives I have spoken to is to allow as many farmers as possible into the scheme from the outset. We have tried to build the scheme to allow 25,000 to 30,000 farmers into it at the start. That has some consequences. However, before we can let anybody into the scheme, we must get it approved by the Commission. The deadline for countries to submit their rural development programmes is the end of July, so the Commission will not even start looking at the draft submissions until then. It will largely not be working through August as that is a holiday period. It will be September before it starts working through the proposals in earnest and I suspect that, if we are lucky, we will get approval at some time in late October or November. That is my guesstimate. That would allow us, hopefully, to open a GLAS scheme in December for applicants.

We are talking about 30,000 farmers but there are not many farm advisers in the country. There are between 400 and 600. One must then calculate how many plans must be put together by each of those advisers and the organisation of that across the country, because there will be farmers in every parish who will want to get into GLAS. That process will take a number of months. Then we must ensure everybody is eligible after they have applied. After that we must go through the checks because this is the same as any funded scheme from the European Commission.

We cannot pay out money until we are sure people qualify. That is going to take some time and that is why I have said that we will work towards getting as many payments out as we can next year, within reason and budget. Those payments will continue from December of next year, or towards the end of next year, into January the following year. We will try to get as many payments done as we can and as early as we can. I can assure the members that it will not be because of a lack of effort on our behalf. It would have been much easier to start with 5,000 or 7,000 farmers, get them up and running, and then have phase 2 for another 10,000 and phase 3 for another 10,000. We are trying to get as many farmers as we can in from the outset. We will work hard to facilitate that because that is what farmers have asked us to day. We will not delay, I can assure the committee, once we get Commission approval.

In terms of commonage, I have been asked some good questions on it and shall address them. First, people have quoted the 80% rule to me. I also read, in one of the farming publications last week, another statement that farmers who are on commonage land, unless 80% of the commonage group that are involved in farming that commonage land sign up then no one will get a payment. That is simply not true. We have tiers 1, 2 and 3. In other words, if we have to choose between who is first in then farmers that can get 80% agreement on a commonage will automatically be first. Farmers who can get 50% agreement on a commonage will also be in but not on the first tier but because we are allowing 30,000 farmers in we will be well into the third tier of farmers.

The second matter refers to Deputy Ó Cuív's question. Nobody on commonage will get payments unless he or she qualifies as an active farmer and that definition has been clearly defined in Pillar 1 payments. If somebody is a carpenter in New York but historically has had a share in a commonage and is getting payments but that is not going to happen in the future.

Éamon Ó Cuív (Galway West, Fianna Fail)
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We are talking about the present.

Simon Coveney (Cork South Central, Fine Gael)
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One must qualify to be an active farmer. Plenty of people will qualify on the basis of their activities, that qualify them as an active farmer, that is not on the commonage area. It will qualify them as an active farmer to get a payment in the commonage area.

Éamon Ó Cuív (Galway West, Fianna Fail)
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I seek clarification. First, the Minister seems to be saying that unlike AEOS, under the new GLAS scheme, payments will issue 75% on commencement in the scheme. Can he confirm whether that is true?

Simon Coveney (Cork South Central, Fine Gael)
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The payments are split into two. There is a 75% payment and then a 25% payment which is the same as the other environmental scheme.

Éamon Ó Cuív (Galway West, Fianna Fail)
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In REPS, in the old days, one got cash upfront when one joined the scheme. AEOS was introduced and one could only get 75% of the payment after the first year following checks at the end of the year and so on. The exact terminology was used in the parliamentary reply to me. It seemed to indicate to me that one would not get a GLAS payment until one had completed year 1 and they had done the checks and then one would receive the remaining 25% as with the AEOS scheme.

The Minister's news is great if it is true. Is he saying that under GLAS, farmers will get 75% once they have checked they are eligible and at the commence of the scheme rather than after the first year?

Simon Coveney (Cork South Central, Fine Gael)
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My understanding is that farmers apply to the scheme. Also, they cannot get any payments until it is shown they are eligible, they pass the necessary tests and we do the necessary inspections. They will then get a 75% payment and that will be followed by the 25% top-up payment after all controls have been completed. The guidelines were laid down by the Commission.

Éamon Ó Cuív (Galway West, Fianna Fail)
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It was the Minister who negotiated everything in the package.

Simon Coveney (Cork South Central, Fine Gael)
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Yes, and they make sense because we have to make sure that everybody is involved.

Éamon Ó Cuív (Galway West, Fianna Fail)
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Is he saying that we will revert back to the old system, that he supplied, where one was paid on acceptance to the scheme having passed the checks rather than after the first year as in the AEOS system? That is what was hinted at in the parliamentary reply to my question. All we are looking for is a clear answer. Are we getting paid cash upfront? If so, that would be great news and I would welcome that news here publicly. Are we getting paid at the end of year 1?

Simon Coveney (Cork South Central, Fine Gael)
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We are looking to get payments out at the end of year 1. If we allow people into the scheme which will be-----

Éamon Ó Cuív (Galway West, Fianna Fail)
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Mid-2015.

Simon Coveney (Cork South Central, Fine Gael)
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No. We hope to launch the scheme at the end of this year. There will probably be a four or five month period in order to get everybody in or between 25,000 and 30,000 people. We will then have to go through a series of checks before we can pay out the 75% of payments. I hope that will be done towards the end of next year or at the very start of 2016. I think it will span that period. Then there will be the final payments when all checks have been completed. That is my understanding of how the scheme works.

Éamon Ó Cuív (Galway West, Fianna Fail)
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That seems to be a major change from AEOS. With AEOS one had to wait until after the first year was over and the final checks were done. It was only then one received 75% which was followed by a 25% payment. The Minister seems to be giving us good news, and great clarification for everybody, regarding the new GLAS scheme. Once one joins the scheme - say mid-year 2015 - that before one ever does anything on the farm the farmer will be paid 75% of a pre-payment. If that is fact then it is very welcome and I congratulate the Minister on negotiating such a scheme.

Andrew Doyle (Wicklow, Fine Gael)
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Perhaps we can clarify the matter further. Is it correct that if one joins the scheme then one must be in it for a period greater than a year?

Simon Coveney (Cork South Central, Fine Gael)
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Yes, it is a five-year scheme.

Andrew Doyle (Wicklow, Fine Gael)
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Let us deal with year 2. At the commencement of year 2 where one has qualified and received 100% the previous year, when one commences year 2 does one get 75% at the commencement of year 2 subject to having done everything one was meant to do to get the 25% final payment for year 1, 25% at the end of year 2 and the same for years 3 and 4? That information will clarify the point that has been made here. Once the scheme is up and rolling, and I am in the scheme, I will get 75% of my year 2 payment at the beginning of the year and 25% when I am assessed at the end of the year. Is that the way the scheme will work?

Simon Coveney (Cork South Central, Fine Gael)
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I do not think so. People do not necessarily get payments at the start of the year. We will endeavour to get payments out before the end of year. Sometimes, as has happened in recent years, payments spill over from one year to the other and, therefore, span two different budgetary years.

Éamon Ó Cuív (Galway West, Fianna Fail)
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We are talking about scheme years, not calendar years. In other words, if Éamon Ó Cuív is allowed into GLAS, and approved on 1 August 2015, will he get 75% in August 2015 or does he have to wait until he has completed one year in the scheme, as he must do so for AEOS at present, in order to get the first 75% payment? That is my simple question.

Simon Coveney (Cork South Central, Fine Gael)
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I will have to check that for the Deputy. I shall come back to the committee with a written explanation. I do not want to be quoted here without giving the factors.

Andrew Doyle (Wicklow, Fine Gael)
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It was not calendar years. A question was raised about the scheme and what happens upon entry for years 1 and 2.

Simon Coveney (Cork South Central, Fine Gael)
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My discussions within the Department have been based on trying to get the first payments out for this scheme before the end of 2015. In all likelihood that will spill into January 2016, in GLAS payments. Let me come back with a more detailed answer as I do not want to give people a bum steer.

Andrew Doyle (Wicklow, Fine Gael)
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People are quite clear on what the question is and that is the main point.

Simon Coveney (Cork South Central, Fine Gael)
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I will come back on the matter. I would like to answer some of the other questions before we run out of time.

Éamon Ó Cuív (Galway West, Fianna Fail)
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I have a question on the active farmer element. The Minister seems to be saying two things.

Simon Coveney (Cork South Central, Fine Gael)
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With respect, I have a lot of questions to answer and I can answer his question afterwards.

Andrew Doyle (Wicklow, Fine Gael)
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Will the commonages only be applicable to active farmers?

Simon Coveney (Cork South Central, Fine Gael)
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Yes.

Andrew Doyle (Wicklow, Fine Gael)
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That is okay.

Simon Coveney (Cork South Central, Fine Gael)
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And repayment. If one is not an active farmer one does not qualify for anything.
Deputy Éamon Ó Cuív:With respect, I specifically mentioned the 50% rule.

Simon Coveney (Cork South Central, Fine Gael)
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Yes.

Éamon Ó Cuív (Galway West, Fianna Fail)
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Now he has introduced tier 3. Is there a lower threshold for tier 3 regarding commonages?

Simon Coveney (Cork South Central, Fine Gael)
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No.

Éamon Ó Cuív (Galway West, Fianna Fail)
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Is it just 50%?

Simon Coveney (Cork South Central, Fine Gael)
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Yes.

Andrew Doyle (Wicklow, Fine Gael)
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We have time constraints.

Éamon Ó Cuív (Galway West, Fianna Fail)
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Can I have one or two clear answers?

Andrew Doyle (Wicklow, Fine Gael)
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I ask the Deputy to move on.

Éamon Ó Cuív (Galway West, Fianna Fail)
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Can I ask a final question?

Andrew Doyle (Wicklow, Fine Gael)
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Very quickly.

Éamon Ó Cuív (Galway West, Fianna Fail)
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If there are 50 active farmers in a commonage, that is 50 people who have submitted a single farm payment application, is the Minister saying that 25 of them must put their farms into GLAS at the one time, and it must be the total farm? I ask because that was the answer that I was given here previously.

Simon Coveney (Cork South Central, Fine Gael)
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The way GLAS works is that one gets paid for certain actions.

It is not like REPS - people are paid for doing specific things on the farm. If people are sharing land, they must get buy-in for the actions from at least 50% of the people farming the land. It would be a nonsense if we were paying 10% of people in a commonage when everyone else had to contribute as well.

Andrew Doyle (Wicklow, Fine Gael)
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We are moving on but the point is that this applies only to people who are active.

Simon Coveney (Cork South Central, Fine Gael)
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It is only the people actively farming who receive payments and only those actively farming need to be part of the 50% or 80% figure.

The independent appeals system outside the Department for the land parcel identification system, LPIS, is in place and is chaired by Mr. Padraig Gibbons. Farmers who are not happy with the departmental appeals system, which is a separate appeals office from everything else in the Department and operates independently, can go to an outside committee chaired by Mr. Padraig Gibbons. He used to be the head of Connacht Gold and was a very popular choice. One third of the LPIS appeals going to the departmental appeals system are successful. We have an active appeals system that is functioning, working for farmers and listening to what people are saying.

The Deputy asked about the broader appeal system for all disallowances and penalties from regulations to cross-compliance. It is a separate issue but I want to provide reassurance on LPIS. The independent appeals system outside the Department is functioning and working for farmers. That is not to say that everyone will like the outcome of cases but it is independent.

It would be unrealistic to suggest that because we set up a beef forum, which is working well, it will start setting prices for beef. We must get real. The market determines beef prices, as does the share of margin that each link in the chain gets, including farmers, processors and retailers. My job is to ensure farmers are protected in that chain because the others are big enough to look after themselves. The beef forum is the first time the Government has put in place a structure that allows each of the players and all of the State bodies involved, including Bord Bia, the Irish Cattle Breeding Federation, ICBF, Teagasc and the Department, to be involved in discussions. We have blunt and direct discussions and a series of decisions taken will be beneficial to the beef sector. This includes increased promotional activity, the consideration of the direct contacts between farmers and those they are supplying, and an improved communication structure so that farmers understand the spec issues and quality issues asked of them. There is confusion and annoyance in the farming community that the spec has been changed, particularly in the lead-in to winter last year. We also have to respond to retailers' demands, many of which are uncompromising, in respect of meat being imported to the UK. Beef prices in the UK have dramatically reduced in recent weeks and it is not a major surprise that we have seen some weakening of prices. We will continue to work on this and both beef forum meetings have been useful. Most of the players involved share that view.

Martin Ferris (Kerry North-West Limerick, Sinn Fein)
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I have a question on beef. Many farmers and those involved in the industry argue that there is a cartel in the beef sector. Do they have access to the cattle database?

Simon Coveney (Cork South Central, Fine Gael)
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No, they do not have access to it. We have reviewed our systems in the Department to ensure that any access they may have got in the past from a departmental official, which they should not have got,-----

Martin Ferris (Kerry North-West Limerick, Sinn Fein)
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Did they have access in the past?

Simon Coveney (Cork South Central, Fine Gael)
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No, there were accusations that, at times, information was accessed that should not have been accessed but I have not seen verification of it. We are putting in place systems to ensure it cannot happen in the future.

Martin Ferris (Kerry North-West Limerick, Sinn Fein)
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Was it reported to the Minister that it was the case?

Simon Coveney (Cork South Central, Fine Gael)
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No, an accusation was made so I asked questions. The response was that it was possible someone could have handed over information in a factory but I do not have evidence that it happened. If it is there, I am open to seeing it. We are putting a beef pricewatch application on the Department's website so that everyone can access detailed information on what is being paid for what grade of animal in every factory line in the country every week. Accusations about a cartel can be examined in terms of facts and figures. The forum is needed to get past rumours, accusations and megaphone diplomacy. Farming leaders are rightly standing up for their members and processors are standing up for their sector but there is no real conversation in terms of trying to solve issues of mutual concern. Factories need a steady supply of good quality cattle in spec, farmers need to get a fair share of the margin available and we need to make sure this happening. If there are issues in respect of access to information that factories should not be getting, we raise the issues, resolve them and put systems in place to ensure they cannot happen. It is a case of improving the overall performance of the sector, which is what the forum is all about. We have shown seriousness because the Minister chairs the forum and in future he or she will be directly involved in the discussions and debates, which can be heated. That is the way it should be. We should have the discussions there rather than outside that room.

Andrew Doyle (Wicklow, Fine Gael)
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The issue of data was raised and, with numerous channels including the ICBF and the Department, it is important data is protected. A profile of the herd from the Department is now available to livestock farmers in respect of age, gender and breed. We must make sure this is not used as a tool to manipulate the market, which is the concern of Deputy Martin Ferris. We have given the matter a fair hearing and I thank the officials who accompanied the Minister. We will now have a rotation of officials.

I welcome Deputy Harrington, who is the only member present of the Joint Sub-committee on Fisheries who is not a member of the Joint Committee on Agriculture, Food and the Marine. Some of the Senators have been called to a vote in the Seanad. Having published this report, the committee continues to seek time on the floor of the House to discuss the matter but we welcome the fact that the Minister is here for direct engagement with the sub-committee on this work.

Simon Coveney (Cork South Central, Fine Gael)
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I would like to have attended the committee before now. I want to give a statement on what we are doing in the inshore sector and provide a direct response to what we are doing on each of the sub-committee's recommendations. We took positive action on a majority of the recommendations. Some require consideration and I will provide background information on that. In the case of some recommendations, I do not have the power to do anything because it concerns a different Department or a decision has already been taken. I thank the members of the Joint Sub-committee on Fisheries for the opportunity to discuss the recommendations made in its recent document, "Report on Promoting Sustainable Rural Coastal and Island Communities", published in January.

The sub-committee produced an excellent report, which I have carefully examined. Many of the recommendations will be central to my own work in moving forward and dealing with the challenging issues facing rural coastal and island communities. I have given consideration to the recommendations in the report. The recent strategy which I launched for the inshore sector was significantly informed by the report and by discussions we have had on the sector. The report makes a total of 29 recommendations, many of which have been taken on board and are part of the work programme I have put in place. Others merit further consideration and some fall within the remit of other Departments and may warrant discussion with other Ministers.

In terms of ongoing, pre-existing work in my Department, I draw attention to a number of investment programmes. As part of the annual fishery harbour and coastal infrastructure programme, I allocated €3 million this year for local authority harbour development and marine leisure programmes. This funding facilitates investment to improve facilities in rural, coastal communities. A total of 13 coastal local authorities have been requested to provide additional details on specific projects submitted by them for consideration for funding. In 2013, 70 projects around the coast benefited from this programme. Earlier this year, as part of the Government’s co-ordinated response to the unprecedented damage caused by the winter storms, I announced €8.5 million in funding for a once-off programme to repair 115 publicly-owned piers, harbours and slipways damaged by these storms.

I have noted the committee’s recommendations on industry representation for the inshore, coastal fishing fleet. I also have been concerned for some time at the lack of formal representation for this part of the fishing industry to participate in fisheries management decision making. Inshore fishermen are more reliant on non-quota species such as lobster, crab and a range of bivalve shellfish, so the conversations on quota management with offshore fishing representatives do not address inshore challenges. For that reason, I announced last month the establishment of the National Inshore Fisheries Forum, NIFF, for the inshore fishing sector, built on a foundation of regional forums. The national forum will be representative of the under-12 m fishing fleet, that is, fishing boats of less than 12 m overall length. The focus will be on fisheries management within six nautical miles and facilitate two-way conversations on issues of mutual concern, industry priorities, emerging policies and initiatives. The national forum will be founded on a regional network of forums based on the FLAG, Fisheries Local Action Group, regions. This regional approach recognises that there are separate inshore needs in different regions around the coast due to variations in fishing seasons, stocks, and so forth and that one-size-fits-all models may not work well for inshore challenges. Each FLAG area has been asked to support the setting up of a regional inshore forum, RIF, to be representative of the local inshore fishing industry of its region. Financial assistance will be provided for out-of-pocket expenses to representatives on the forums. Each RIF will nominate two delegates to represent the region at the NIFF. RIFs can develop fisheries management initiatives relevant to their region and put them forward at the NIFF for wider industry consideration. Full terms of reference and guidelines for the forums are currently in preparation. I look forward to receiving proposals from the NIFF concerning inshore fisheries policies.

At the time I announced the forum structures, I also announced funding schemes relevant to inshore fishermen in coastal communities and the islands. These schemes are dedicated to supporting the inshore fisheries sector which, taken together, represent a package of €1 million and is in addition to the €600,000 in co-funding by the Government and the European Fisheries Fund available to the coastal and island communities through the FLAGs. The shellfish pot replacement scheme, administered by BIM, is providing 40% of the cost of replacing lost pots through fixed payments of €24 per lobster or crab pot and €12 per shrimp pot. Due to the limited uptake of the original scheme, I have extended it, more than doubling the pot limits from 50 to 200 for boats less than 12m length and from 100 to 250 for boats from 12m to 15m in length. Existing applicants to the current scheme will automatically be increased to the supplementary pot limits and a call for new applications is being advertised.

The new sustainable inshore fisheries scheme will provide funding for environmentally-friendly fishing gear and equipment and support for improvements in the areas of quality, hygiene and standards on board, which is a really important issue for the inshore fleet. Many inshore fishermen operate on boats that need an equipment upgrade and we want to be able to support them in that regard. In addition, the scheme will increase the grant aid for voluntary v-notching lobsters from the existing maximum of 55% to a new maximum of 75% to entice more fishermen to participate in this worthwhile conservation activity. We have also introduced a limit on the maximum size of lobster that can be caught because the bigger the lobster, the more it breeds. However, we will compensate fishermen to the tune of 75% for throwing back big lobsters, which amounts, more or less, to the full cost. This will encourage the breeding programmes which are necessary to start building up lobster stocks which are under undue pressure at the moment. We are also looking at pilot hatchery projects and expect the RIFs to bring forward proposals on same. We are willing to put money into such projects to make sure they work. I had a really interesting conversation with staff at the aquarium facility in Dingle a year ago about the potential of hatcheries, particularly for lobsters, and I want a proactive approach from the RIFs to develop such projects sooner rather than later.

Regarding aquaculture, I have noted carefully the recommendations made by the sub-committee. All applications for aquaculture licences are considered under the provisions of the 1997 Fisheries (Amendment) Act and the 1933 Foreshore Act. Decisions in individual cases are made only following the most rigorous assessment of the technical, scientific, environmental and public policy aspects of each application. I have noted the recommendation on the allocation of resources for the processing of aquaculture licenses and renewals. My Department, in conjunction with the Marine Institute and the National Parks and Wildlife Service, NPWS, of the Department of Arts, Heritage and the Gaeltacht, is engaged in a comprehensive programme to gather the necessary baseline data appropriate to the conservation objectives of Natura 2000 areas. This data collection programme is substantially complete. Analysis of the data, together with the setting of appropriate conservation objectives by the NPWS, will enable all new, renewal and review applications to be appropriately assessed for the purpose of ensuring compliance with the EU birds and habitats directives. The appropriate assessment process represents a significant financial, administrative and scientific investment by the State in resolving this issue. My Department continues to make every effort to expedite the determination of all aquaculture applications having regard to the complexities of each case and the need to comply fully with all national and EU legislation.

Regarding sea lice and the call by the sub-committee for the publication of the results of the Marine Institute’s inspections, the existing position is that Ireland’s sea lice control protocols are operated by the Marine Institute and involve regular inspections of marine fin fish sites by Marine Institute inspectors. These protocols are more advanced that those operated in other jurisdictions. The inspection regime is totally independent of the industry. Data obtained as a result of inspections is published and made widely available. Treatment trigger levels are set at a low level. Results of inspections are provided to the farm operators within five working days. Results are also reported to the Department and to other interested parties such as Inland Fisheries Ireland. Overall results and trends are published annually. The sub-committee's call for publication, therefore, is already catered for.

Éamon Ó Cuív (Galway West, Fianna Fail)
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Or where the Minister will be?

Simon Coveney (Cork South Central, Fine Gael)
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That is a fair point. Let there be no doubt but that we have take the report of the sub-committee very seriously. I have taken its recommendations seriously and I hope that is reflected in what we have announced since its publication.

For far too long the inshore sector has essentially been operating in a way that is unregulated and does not have proper representation in terms of impacting on policy and as a result has not got the political attention or priority that the sector deserves. A significant number of people are employed in the fishing industry. I hope that with the formalised structures in place it will allow us have many more discussions on policy, funding and support so that we can protect the stocks that everybody relies on as well as being able to make sensible policy decisions to allow the sector to be more profitable.

Andrew Doyle (Wicklow, Fine Gael)
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This is a meeting of the joint committee, but the sub-committee comprised of members of this committee together with members from the Joint Committee on Transport and Communications and Joint Committee on Environment, Culture and the Gaeltacht because of the islands. We accept that some of the recommendations are not within the gift of the Department, in particular, the recommendation on PRSI, because the Department of Social Protection was not represented on the committee. We have already made representations separately to the Minister for Social Protection on that specific point.

Éamon Ó Cuív (Galway West, Fianna Fail)
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The Minister mentioned the reopening of the compensation scheme for people who lost pots during the storms in January. Does the Minister have an indication as to whether the take up on the revised scheme is any larger? Is he willing to reconsider the requirement to have a receipt for the original lobster pot, which was not required for the shrimp pot and in my view was the major inhibitor for people taking up the scheme? My understanding is that the number of applications for the scheme is very small.

I welcome what the Minister has done and I recognise his commitment to do something for the inshore fishermen. I particularly welcome the idea of setting up the forums, because one of the major obstacles was the lack of a representative body, that we, the public representatives could meet.

The Minister did not refer to all of the recommendation. There is a recommendation on the mackerel quota that there would be a more equitable distribution of the mackerel in the event of extra quota becoming available.

The second issue is a long burner but we must start on this long and tedious route, that is recommendation No. 14. It recommends that we would look for a national 12-mile limit and that the small boats would not be confined to remaining within the six-mile limit.

It also recommends that the fishing limit for smaller boats be extended from six miles to 12 miles. The proposed arrangement to protect the inshore fisheries industry would apply across the European Union and thus requires the agreement of all member states. It provides that all EU vessels under a certain size could fish within the 12-mile limit, subject to the normal rules, while larger boats would be prohibited from doing so.
Recommendation 18 relates to producer groups and assisting people to sell collectively. Recommendation 21 relates to the regulations to be introduced for lobsters. It had been proposed to change the size of lobster that could be caught.
Recommendation 26 proposes the establishment of a new body, perhaps with the title "Comhairle na Mara", which would have responsibility not only for fishing but related areas such as the marine, leisure activities and so on. As in the case of Comhairle na Tuaithe, the new entity would invite all the players to the table. As such, it would be slightly different from the forum to which the Minister referred as I understand it would be a fisherman's forum. The new body would consider how, in line with the Department's document Harnessing our Ocean Wealth, the sea could be exploited for communities in a sustainable manner. As with Comhairle na Tuaithe, Comhairle na Mara would bring together statutory, voluntary and industry groups to try to advance this objective.
I have had discussions on seaweed with officials in the Department. As the Minister is probably aware, there is a major tussle taking place in counties Mayo and Galway about whether the rights to collect seaweed should remain where they have always resided, albeit on a de facto basis as I accept that many people did not bother acquiring harvesting licences. All those in the area who own the land believe they also own the seaweed and nobody has disabused them of that belief. Some of them clearly own the seaweed because this is explicitly stated on their folios.
I have copies of folios submitted to the Department of the Environment, Community and Local Government which state clearly that the owners have appurtenant rights to the seaweed. The Department has indicated it will revert to me with the legal advice it receives on the issue of appurtenant rights. Most people, particularly those with the types of folios I described, believed they owned the seaweed and were rather shocked to learn that, in the dead of night, as it were, a State agency, Údarás na Gaeltachta, applied for a licence to harvest 40,000 tonnes of seaweed. If this application is granted, it would effectively cede ownership of the seaweed and allow Údarás na Gaeltachta to sell it to whomever is willing to buy it at the right price. Has the Minister had discussions with the Minister of State at the Department of the Environment, Community and Local Government, Deputy Jan O'Sullivan, who is, I understand, responsible for this issue? This case has the potential to cause serious harm to the industry by removing harvesting rights from small local operators and placing them in the hands of a large multinational company that bought Iasc Mara Teoranta. This company could seek to outsource harvesting rights to outsiders who could replace the excellent traditional industry that has been carried out in a sustainable manner for the past 50 years. The local harvesters have not caused any environmental damage because they are very careful in harvesting.

Martin Ferris (Kerry North-West Limerick, Sinn Fein)
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I welcome the fact that the Minister has taken on board many of the recommendations. This is a positive aspect of the debate between the joint committee and the Minister and his officials.

The Minister stated he will increase the pot limit from 50 to 200 for boats of less than 12 m. in length and from 100 to 250 for boats of more than 12 m. in length. What is the expiry date for the scheme?

Simon Coveney (Cork South Central, Fine Gael)
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The increases will be from 50 to 200 and 100 to 250, respectively. We tried to take into account that some smaller boats lost more pots than large boats, a point Deputy Ferris and a number of others made in the Dáil. As a result, we quadrupled the limit for smaller vessels from 50 to 200 and increased the figure for larger boats slightly more than twofold, from 100 to 250. All those who applied to the scheme, which was a relatively small number, can qualify for compensation for more pots provided they have the data required.

Martin Ferris (Kerry North-West Limerick, Sinn Fein)
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Will the same conditions apply? Must an applicant produce receipts?

Simon Coveney (Cork South Central, Fine Gael)
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Yes.

Martin Ferris (Kerry North-West Limerick, Sinn Fein)
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That is the problem.

Deputy Eamon Ó Cuív:

Why does that condition apply to one group and not another?

Martin Ferris (Kerry North-West Limerick, Sinn Fein)
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When we met representatives of the fishermen in question they indicated that the problem they faced was that they do not have receipts to show they purchased the pots. While they lost their pots, they do not have receipts for them. One man from west Cork lost more than 300 pots and his entire business as a consequence. Is an alternative available? For example, would proof that they had sold fish during the period in question suffice?

Andrew Doyle (Wicklow, Fine Gael)
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The alternative suggested was the production of invoices. In the fodder scheme, some people were paid directly, provided there was a supplier and an invoice. It was suggested that the payment would not have to be made to the lobster fisherman directly. Under this proposal, one would verify that a transaction had taken place for the specific purpose.

Deputy Eamon Ó Cuív:

The fisherman would have to produce a receipt for the new pots.

Andrew Doyle (Wicklow, Fine Gael)
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Yes.

Simon Coveney (Cork South Central, Fine Gael)
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The issue is the old pots and the need to prove that one had pots. We do not want to significantly increase the number of pots in use through a scheme of grant aid. Overfishing of lobster is already taking place in some areas. We want people who can show they have lost pots before being able to replace the pots they have lost. The problem is that it is very difficult to have a grant scheme that does not require proof of loss. It will not be sufficient for someone who does not have records to ask us to believe he or she had 300 pots. While we obviously want to try to help everybody, we have to be able to show - the scheme will be audited - that we are only paying out for pots we know were lost. Deputy Ó Cuív asked the reason this requirement applies to lobster pots but does not apply to shrimp pots. It was intended that it would apply to everything.

Deputy Eamon Ó Cuív:

That is not the case. From the outset, the scheme specifically stated that one did not need receipts for shrimp pots.

Simon Coveney (Cork South Central, Fine Gael)
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Bord Iascaigh Mhara is responsible for rolling out the scheme. It was my understanding that it was originally intended that receipts would be provided by shrimp and lobster fishermen. I will ask Bord Iascaigh Mhara the reason for the difference in approach.

Deputy Eamon Ó Cuív:

Bord Iascaigh Mhara should know the average catch of each lobster fisherman as the fishermen sell the lobster to registered buyers. The boats are registered, which means I cannot claim to have lost pots because I do not have a registered boat or potting licence. If, as an alternative to producing the receipts for the lobster pots, applicants were allowed to produce receipts for the sale of lobster in the past two or three years, one would get a fair measure of the activity level in recent years.

Andrew Doyle (Wicklow, Fine Gael)
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The essence of the argument is that the scheme should be administered in a more flexible manner.

Simon Coveney (Cork South Central, Fine Gael)
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Whatever approach we take, it will be audited, as is required, and I will have to appear before a different committee to explain the reason we are spending money and show receipts for this expenditure. The last time we launched the scheme, we took a conservative approach and I indicated we would revisit the scheme if the allocation was not fully spent. We have done this and reopened the scheme to new entrants in recent days. We will have to wait to see what type of response it gets.

Martin Ferris (Kerry North-West Limerick, Sinn Fein)
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Is there a cut-off date?

Simon Coveney (Cork South Central, Fine Gael)
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The scheme has only been opened. I am not sure to what type of cut-off date the Deputy is referring as the losses must have occurred during the storms.

Martin Ferris (Kerry North-West Limerick, Sinn Fein)
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I am referring to a closing date for applications.

Simon Coveney (Cork South Central, Fine Gael)
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The scheme will certainly be open for the next month. I can check the exact date.

Martin Ferris (Kerry North-West Limerick, Sinn Fein)
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On the practice of V-notching, I welcome the decision to increase the current maximum of 55% to a new maximum of 75%. I am at a loss, however, to understand the position regarding large lobsters. The figure is either 127 mm or 128 mm.

Simon Coveney (Cork South Central, Fine Gael)
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The figure is 127 mm.

Martin Ferris (Kerry North-West Limerick, Sinn Fein)
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Is there evidence to prove that they-----

Simon Coveney (Cork South Central, Fine Gael)
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Yes.

Martin Ferris (Kerry North-West Limerick, Sinn Fein)
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Okay.

Andrew Doyle (Wicklow, Fine Gael)
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I am conscious of the time factor for the Minister. I call Deputy Pringle.

Thomas Pringle (Donegal South West, Independent)
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I thank the Minister for his response to the report and I have a few questions on it. I welcome the announcement of the establishment of the inshore fisheries forum for onshore fisheries. What is the timeline for it to get up and running and how does the Minister envisage it will work? If the regional forum presents policy to the national forum and the national forum adopts it, will the Department, as happens in the case of the POs, accept the policy from it and implement it or will a certain degree of management be handed over to the regional forums?

On recommendation No. 7 on the mackerel quota, which Deputy Ó Cuív has raised, I would like to hear the Minister's response to that. I would like to hear his response to recommendation No. 10 in regard to the heritage licences. The traditional fishermen were strong in calling for some action to be taken on that.

On the replacement grant for potting, one of the issues raised with the committee was that fishermen cannot afford to spend their money before they get the grant aid and before they access finance to replace pots.

On the V-notching programme, why is it still being maintained on a voluntary basis? Is there a rationale for that? Should it be a compulsory programme?

Does the Minister's Department have a view on the potential for the control of seaweed harvesting in terms of one operator getting control of a foreshore licence in regard to the harvesting or what is his view on such consolidation of seaweed harvesting?

Noel Harrington (Cork South West, Fine Gael)
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I welcome the Minister's comments and his approach to the report that was published. I particularly welcome the establishment of the inland fisheries forum. Even though groups from throughout the country appeared before the committee and they had individual issues on a regional basis, three quarters of the issues they raised were the same issues. The only difference is that they were expressed with different accents. They discussed many of the same types of issues but they were very fragmented. I hope the establishment of the forum will address in some part the representation which covers 80% of the vessels in the fleet. A huge handicap for that segment of the industry and for decision makers is that there has been one voice representing it or one policy in respect of it.

The Minister might elaborate on the recommendation on the heritage licences. Those in the inshore fleet who have licences for non-quota species do not have a protection against other fishermen who might come from different segments. They are exposed in areas that are under significant pressure. Is there any way to protect them, whether through a track record or a heritage licence as mentioned in the report? There are vulnerable individuals in that sector.

I welcome the V-notching programme. The report on the V-notching of lobster has been very much welcomed by the industry. I have not met anybody who has criticised the 75% funding for V-notching. It will be very progressive and I hope it will be taken up enthusiastically by the industry. On the hatcheries, and the Minister mentioned lobster, are there any proposals that he might consider for seeding for scallops in some of the bays? That is something that might be worth considering.

Another issue, touched on in the report in terms of training which the Minister might examine, is BIM's budget for staffing in the fisheries training centres. While there is a growing interest in training and growing numbers in the training centres, that needs to be matched with greater resources for instructors and mariners to assist in getting higher level tickets to the industry in terms of navigation or safety in particular. I understand that the greatest potential for loss of life is among those in the inshore fleet. A greater investment in the regional fisheries training centres through BIM would be welcome.

The Minister mentioned that this part of the industry was unregulated. I believe it is very much regulated but that it is under-represented. Even though most of it is in a non-quota segment, it did not have the same representation or the same voice as the POs. The Minister might have an opinion on the structure of the POs. When we have freedom of association it is difficult to change the structure of the POs. We have a pelagic PO or a demersal PO but there is certainly an inshore PO. Would the Minister see the IFF ultimately developing into a structure more akin to a PO structure?

Brian Ó Domhnaill (Fianna Fail)
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I will be as brief as I can as the Minister is probably under pressure timewise. I commend him on his initiative on the inshore fishing strategy which he has adopted in response to some of the recommendations that were highlighted in the document prepared by the subcommittee, and that must be welcomed. Some of the issues related to it have been raised by members. The forum is an excellent idea and hopefully it will lead to a more joined-up, grassroots-upward viewpoint being filtered into the Department, which is something that needs to happen, and the Minister acknowledged that in his address.

I have a few questions on the lobster and crab issue. I welcome that the grant aid has been extended. That issue was raised by the committee. New applications are to be advertised. Have they been advertised yet? Has the grant scheme being advertised yet? The grant scheme is currently capped at 40% of expenditure and that is proving to be problematic for many of the small potting fishermen. Can the Department consider increasing that grant aid? There may be EU state aid guidelines that preclude that, but is it something that can be considered or, as an alternative, can some arrangement be put in place with credit unions or processors to help fishermen who are under pressure and finding it difficult to cope?

I agree with the Minister that the lobster species are under threat. They are in danger of being overfished and that is because many of the traditional fishing opportunities available to fishermen locally, whether it be salmon fishing or other fishing opportunities - I am not laying the blame at the Minister's door for that as that was done by the previous Government - have been removed. One of the issues we raised during our deliberations and which is contained within the report is the need to consider a heritage licence which would be very restricted and would be available for fishermen who may wish to fish traditional fishing opportunities that are available. Obviously, salmon fishing is one but other fishing opportunities are also available. That is something that should be explored. What is the Minister's view on that? I accept that it crosses over into another Department.

The salmon fishing opportunities available currently are only available to the angling fraternity and some rivers are closed in that respect, but the biggest danger, as any angler would advise, to salmon migrating up river are the seals in each of the estuaries. I was at an estuary in north Donegal last weekend where 12 seals were spotted and the local anglers would tell one that the salmon do not have a chance of getting up river. The seals are very acclimatised to being able to pick up the salmon.

I realise salmon are protected under the European habitats directive but I believe the matter needs to be examined. Why should a fishing opportunity be destroyed with seals in bays? The Minister and his colleague, the Minister for Arts, Heritage and the Gaeltacht, Deputy Deenihan, need to examine the possibility of operating a seal cull. I am unsure whether that is something the Minister is interested in examining, but it has been done in other jurisdictions and it should be examined here in conjunction with the opportunities that a heritage licence would bring.

I understand the grant aid issue is being considered under the new Common Fisheries Policy. What is the Minister's view? Will grant aid for fishing vessels only be available for vessels that are over three years old? Will it be restricted to upgrading those vessels or will grant aid be made available for purchasing newer or more up-to-date vessels?

Simon Coveney (Cork South Central, Fine Gael)
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Does that relate to the CFP generally?

Brian Ó Domhnaill (Fianna Fail)
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Yes. What case has the Department made for widening out grant aid and making it available for newer vessels? Fishermen maintain that upgrading older vessels is not the best thing to do in terms of safety or fishing opportunities and that it is far better to purchase new vessels.

Michael McNamara (Clare, Labour)
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I wish to focus on a couple of recommendations. There was a recommendation that local authorities carry out an audit of access to the various piers under their control. We have previously discussed the fact that the Department makes available funding for bricks and mortar work to be carried out on piers and for construction work but it does not fund consultations, preplanning work and so on.

Simon Coveney (Cork South Central, Fine Gael)
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Yes, it is a stimulus initiative to try to get physical work done on piers.

Michael McNamara (Clare, Labour)
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I appreciate that, but some local authorities take the infrastructure of their piers more seriously than others. I suppose this is a matter for local authorities but can anything be done to fund the preplanning work? I imagine Country Clare is not unique in this regard and there are several projects that could do with works but the local communities cannot get them to the stage where they can apply to the Department for funding. This is partly because it is not a priority for local authorities. I appreciate that local authorities are under funding pressure, as is every other level of government. Carrying out the works that would enable local authorities to apply to the Department is not a sufficiently high priority for them.

Another point relates to the regulatory processes and delays and duplication in licensing. Has any progress been made in this regard?

Simon Coveney (Cork South Central, Fine Gael)
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Does that relate to aquaculture or what type of licensing?

Michael McNamara (Clare, Labour)
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Yes, I was referring to aquaculture and shellfish licensing.

Mary Ann O'Brien (Independent)
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I have one quick question which is slightly left of field. It relates to fluoride. The Minister will head off to his European Union meeting next week. I had to leave earlier when we were discussing the milk quota and we have been discussing fisheries up to now. What is the Department's position on fluoride? Is the Department doing any studies or looking into the science on the effects of fluoride on aquaculture and agriculture? I am such an admirer of the Minister's Origin Green project and the Food Harvest 2020 policy. We are the only country remaining in Europe that insists on putting fluoride into our water. It was a 1960s initiative that was all about cavities. Now we all have toothbrushes and we know bad teeth come from gum disease and not cavities. The matter has been discussed in the Seanad and the Dáil many times. I would hate if the policy had a long-term effect on any of our larger visions or plans around this wonderful island and what we produce.

Simon Coveney (Cork South Central, Fine Gael)
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I will address Deputy Ó Cuív's questions first. He asked about the advertising for new applicants for the scheme. That is either happening today or it is about to happen and, therefore, it is rather difficult to give an assessment of the take-up.

Reference was made to mackerel allocation. There has been a significant increase in the mackerel quota this year, largely linked to a political negotiation with Iceland and the Faroe Islands with a view to getting the political deal across the line. This is the basis of it as opposed to relying on any scientific data, although some scientific data from ISIS has facilitated the process. To secure agreement, everyone will get more mackerel in the short term. In my view that is only for the short term and within a short number of years we will be back to where we were last year in terms of mackerel quota in Ireland. As a result of the increasing quota, everyone gets a greater percentage. The split is 87:13 between the pelagic fleet and the polyvalent fleet. Everyone benefits from an increase in the overall amount because everyone gets a percentage.

I believe we would have gone through a very difficult process of negotiation - one must do so when one wishes to change allocation criteria and percentages - and had we done so I believe it would have been legally challenged. In any event we will be back to where we started in terms of the overall quota available for the fleet. I have decided not to do that for the moment. We have enough to deal with in terms of the implementation of the CFP, the decisions on how we spend the new fisheries fund - we will get news on it this week - and the negotiation with the Department of Public Expenditure and Reform on the associated co-funding element, without having on top of that a renegotiation of the percentage split of mackerel, which would turn into a long, difficult and drawn-out process. I have decided not to do that this year.

The possibility of an extension of the six mile limit to 12 miles was raised. If I could do that, I would. We tried to secure that as part of the CFP. We looked for support for such an initiative but did not get any. If we could increase the exclusive zone from six miles to 12 such that only our boats were allowed in, I would do so in a shot. We are always looking for such opportunities at a European level. However, as the Deputy is aware, we need support from many other countries to secure something like that and it was simply not available.

Lobster size regulations are based on recommendations from the industry and the science of the Marine Institute. It is simply a fact that a very large male lobster and larger female lobsters produce more offspring than smaller lobsters. Often large lobsters are not valued according to their size and weight. Ideally, we want older larger lobsters producing many offspring in areas that are protected, where possible. Certainly, we want female lobsters being put back and V-notched and we compensate people for that. We also want large male lobsters being put back as well. I am referring to large lobsters over 127 mm.

There is an issue for parts of the west where lobsters are considerably bigger, particularly around the Aran Islands. Concerns have been expressed to me specifically on this issue. This is the type of issue I am happy to discuss and negotiate with regional forums. If we have larger average lobster sizes in one part of the country versus another, we can consider applying different maximum sizes to different areas, depending on what suits the stock in those areas. However, we must get the feedback and data before we can do it. At the moment, the perceived scientific wisdom is that the cut-off point should be 127 mm and that is what we are going for. Of course people are getting compensated for putting them back.

I am keen for V-notching to be compulsory. However, I would prefer this to come from the industry because otherwise it will be an enforcement nightmare. I would love to see the regional forums feeding into a national forum and for the national forum to make a recommendation that V-notching would be compulsory in the lobster industry. We would gladly implement it then and support that approach. It makes sense on every level. However, we do not have full buy-in for that. Without such full buy-in we could announce a law but we would spend an absolute fortune enforcing it.

I would much rather self-enforcement within the industry where possible, through the regional fora and the structures set up as part of those. Hopefully everyone will buy into that and soon it will become mandatory for everybody, particularly now that there is a 75% compensation for putting V-notched females back. I would like it to develop but the industry must make it happen.

I would rather not comment on the seaweed rights argument because I have not spoken to the Department of the Environment, Community and Local Government about it. I do not want to step into the area for which the Minister of State at that Department, Deputy Jan O'Sullivan, is responsible. I will talk to her about it.

In respect of the replacement of pots and the 60% that fishermen must pay, we did a deal with Bank of Ireland. It said if we provided 40%, it would match that and provide 40% of the capital required by people looking for that funding, which leaves fishermen to find the remaining 20%. That was a recognition that a banking provision was required to finance this area. I expect AIB or Ulster Bank would do the same. This is a matter of investing in the industry and creating good faith around it. In relative terms this does not involve huge sums of money, although it is significant for many who fish in this category because many would not have overdraft or loan facilities in place. I have an assurance that Bank of Ireland, particularly, and I suspect the other banks, will at least match what we are doing by making loan or overdraft facilities available to enable people to avail of grant aid. It is important for people to know that.

In response to Deputy Harrington, I hope we will get some recommendations on the scallops. I hope we have started the ball rolling on that issue. That was the idea behind hatcheries for lobster. People could see the Department was willing to support initiatives of that kind. Let us see some more initiatives coming from the sector that can work in suitable regions. If that means seeding scallops, we will by all means consider that, if it makes sense to put public money into it.

As for heritage licences, salmon fishing is not my area but we should consider ways to create new income opportunities for inshore fishermen. In the UK, for example, a significant line fishery has developed for mackerel which is labelled and marketed differently from mackerel caught in large trawls. Many restaurants in the UK will buy only line-caught mackerel and will pay more for it because it is sustainable and because of the quality of the fish brought in. We have a big enough quota allocation to support a growing line fishery in different parts of the coastline, where through working with organisations such as Bord Bia, we could create a strong market in Irish restaurants. I would like to see more work on that, and if I am around long enough, we will do work in that area. For better or worse, this Department does not make decisions on salmon.

The training centres are an issue and I would like to see more links with the National Maritime College in Cork, which has a fantastic infrastructure, particularly on safety in navigation. The resources there are second to none anywhere in the world, and there is no reason fishermen should not access that. That does not mean we should take them out of Greencastle or Castletownbere. We should not. There should be investment there but that training could be supplemented by time in a National Maritime College that has the infrastructure to improve training in that area. The inshore forum is not a PO, it is a consultative forum. It is there to bring forward policy ideas and hopefully I will give it some ideas and get feedback. It may develop into a PO.

If there are only 12 seals at the entrance to any harbour, one is doing well.

Brian Ó Domhnaill (Fianna Fail)
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I was not talking about a harbour, I was talking about a small-----

Simon Coveney (Cork South Central, Fine Gael)
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Anyone who has been to places such as the Gascanane Sound in west Cork will know there are hundreds, if not more, seals, in other places. I get mixed reports on seals and their impact on wild fisheries. Bord Iascaigh Mhara is assessing that, but we are not in a position to decide on seal culls without a lot of science to back it up. That would be a very unpopular thing to do among the broader public, even though I am sure some fishermen would support it. Before we could even consider it, we would need very sound science and data. That will primarily be a decision for the National Parks and Wildlife Service, NPWS.

We do not have grant aid for boats in the new European Maritime and Fisheries Fund, EMFF. That ended in 2003. We will be able to spend money on upgrading certain equipment on boats that improves the quality of fish, safety and the quality of the work environment on boats. I do not think there will be a fleet renewal fund coming through the fisheries fund because the Commission would vehemently oppose that. It is concerned that there is already far too much capacity in fleets across member states, relative to the available stocks. First, we need to rebuild stocks and then move to increasing catch capacity by making the investments. There is a provision to take some boats out of the system in the new EMFF. Once we know how much money we have to spend, the industry needs to sit down with all the representative bodies, POs and fora to work out how to get the maximum value for the Irish seafood and fishing industry from the available funds. I hope there will be a significant increase on what was available for the past seven years, and although the overall fund is down by 10%, I think Ireland’s share of it will dramatically increase. That may be a bullish prediction but I would be very disappointed if that was not the case.

On the local authority audits, we have only €3 million to spend this year, a relatively small sum, for approximately 70 different projects across local authorities around the coastline. If we have only that much to spend, we want to see bricks and mortar improving infrastructure as opposed to people spending a fortune on consultants. If we had a lot more money to spend, which hopefully we will soon, we would spend it on more than fixing and building new facilities. For the moment, I want to concentrate it on activity and improving water access infrastructure for the fishing industry and for marine leisure.

My views on fluoride should be reasonably well known. We need to reconsider our fluoride policy. I have made my views known in Cabinet.

The Minister for Health, Deputy Reilly, has committed to setting up an international panel to examine the appropriateness of Irish fluoride policy. There are many in his Department who would defend that policy very strongly as a good public health policy while others question it. We need an independent assessment and recommendations on which we can act. It is relevant to say that the water used in most agricultural activity does not have added fluoride because it comes from wells on the land. Fluoride is only added, by and large, to the public water supply available to urban populations. That was a decision taken for good dental health reasons many years ago. I do not think politicians should be making decisions here without the science to back them up. However, I agree that the majority of countries in the developed world have moved away from the policy of adding fluoride to water, the exceptions being New Zealand, Australia and parts of the United States, which continue to add fluoride to drinking water, and they maintain that it is the right policy. This is not a black and white issue but there is a commitment by the Government to have an independent group of credible people to look at the policy and to make recommendations on which we will act.

Michael McNamara (Clare, Labour)
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I asked a question about the issue of licensing and in particular the duplication between Departments. The Minister referred to mackerel and line mackerel. Many restaurateurs are prepared to pay a lot more for scallops that are dive-caught rather than dredged. This should be borne in mind when developing sustainable markets.

Simon Coveney (Cork South Central, Fine Gael)
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We are making good progress with regard to licensing. Up to three years ago there had not been a licence granted for about five years in any area of aquaculture. Two years ago I signed off on about 130 licences, with 134 last year and this year it will be more than 200 licences. This shows we are making progress, but all these bays must first be assessed because they are all Natura 2000 designated areas. Before a licence can be considered, an assessment of the bay in question must be carried out and then the impact of the granting of a licence on the ecosystem must be assessed. This involves co-ordinated work between my Department, the Marine Institute and NPWS. We are working as quickly as possible to assess those bays. I know that people who want to expand their businesses are frustrated with the delay in areas such as Donegal, west Cork and along the west and south coasts. I assure members that this is a major priority for me because, in my view, this is an industry with the capacity to grow significantly and in a sustainable way. We have a better licensing system now than any other country in the European Union, but it is a slow process as a result of the assessment procedures. We can take some comfort that when people are issued with a licence, it will stand up to scrutiny from the EU or from any other body because of the assessment process. Many other countries will find that the Commission is taking a closer look at the operation of their licensing systems, just as it has looked at our system in the past.

Andrew Doyle (Wicklow, Fine Gael)
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I thank the Minister and his officials for a comprehensive response to the report's recommendations. We take some heart from the fact the inshore fisheries forum has been established. We note the Minister's point about the use of flags in building sustainability.