Simon Coveney (Cork South Central, Fine Gael)
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I am sorry, but I do not have two hours. If it were helpful, I could skip my opening statement in order that we might go straight to examining the expenditure programmes.

Simon Coveney (Cork South Central, Fine Gael)
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I could make the statement. I am in the Chairman's hands, but as I will also be making a statement to the Dáil at 6.45 p.m., I must be out of here by 6.30 p.m. at the latest. I would rather it to be 6.15 p.m., if possible. I could make a statement at this meeting that would take seven or eight minutes, but I am happy to skip it, if the committee wants.

Simon Coveney (Cork South Central, Fine Gael)
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Yes. We would have started earlier, but one of the committee's members tabled a private notice question that I had to take.

Simon Coveney (Cork South Central, Fine Gael)
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I will make a quick statement, if the committee wants, to give some context to the discussion.

Simon Coveney (Cork South Central, Fine Gael)
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I am pleased to accept the invitation to attend the committee's hearing. This is a valuable opportunity to review how we are progressing through the various challenges and opportunities presenting across the agriculture, food development, marine and forestry sectors and discuss market prospects and new investment opportunities in same.
As we head into the final quarter of 2014, we have many successes on which to reflect and, in equal measure, many challenges to face. I am pleased to have secured agreement at Government level for a new rural development programme worth €4 billion in the 2014-22 period. The plan is in Brussels and I look forward to securing approval which, in turn, will enable me to launch new schemes aimed at dealing with the many challenges we face in order that we can be well positioned to respond to growing market opportunities. I want to secure the same future for the marine sector and have negotiated a new, substantially improved allocation of €147 million under the European Maritime and Fisheries Fund, EMFF, increased from €70 million. My officials are working on a draft operational programme that will set out a series of measures to drive investment in the sector to 2020.
This is a valuable opportunity to consider some of the wider issues beyond the financial data, including trade developments, issues relating to implementation of the Common Agricultural Policy, CAP, and the Common Fisheries Policy, CFP, and the proposals for the main sectors, particularly milk production, where we are on the cusp of achieving for the first time since 1984 a dramatic increase in milk output viathe elimination of quotas next year. If members want an update on superlevy issues, I will try to provide one.
In the financial data we have supplied in the briefing material we have tried to tie the financials and outputs together. While expenditure in 2014 is the central issue at this meeting, budget 2015 is not too far from members' minds. However, they are aware that I am somewhat constrained in what I can say about the budget. In 2014 we are operating within the expenditure ceilings set down of €1.019 billion for current expenditure and €200 million for capital expenditure. Our outlook for the year is that we will be as close as possible to reaching the target current and capital expenditure limits. The overarching objective for 2014 has been to build on the progress achieved in recent years in developing the agrifood sector and, in particular, further contributing to future growth and prosperity that the sector can achieve for Ireland.
In terms of the budget, the key priorities were supporting vulnerable sectors and protecting the incomes of family farms; supporting small farm holdings in disadvantaged areas; taxation measures to restructure, modernise and promote growth in the agrifood and farming sectors; providing support programmes in line with the targets of Food Harvest 2020, in particular job creation; supporting the future of the sector through new research and development funding and investment in food safety and animal health and welfare controls; and an ongoing programme of reform within the Department and its agencies aimed at continuing improvement in service delivery and reduced costs.
As members know, my Department's activities are organised under four programmes. Given my understanding that this is how the committee will review expenditure in 2014, I will not make specific comments at this point. However, it is useful to highlight the fact that 2014 marks a transitional period between two rural development programmes. We must take this into account when considering the issue. I am pleased that, since this discussion session last year, the overall funding package for the seven year programme has been completed and that we are close to completing a similar arrangement for the new seafood development programme.
Elsewhere in the Houses today we have already discussed the beef sector. Developments in the past 12 months have presented us with a real challenge. Many of the solutions lie outside the framework of Government spending and policy, but I have been active in seeking to influence and in taking direct action. I assure the committee that the sector is foremost in my priorities and I will continue to work with the industry at all levels to ensure that not only will we resolve the current issues facing the sector but that we will continue on a path towards achieving the key targets for the sector to which the industry has committed itself in the period to 2020.
In framing last year's budget in difficult financial circumstances I allocated €23 million to supporting the new beef genomics scheme, which will further progress the genetic quality of Irish beef and deliver world best practice in beef traceability.

When taken together with the beef data programme, worth €10 million, this allowed me to provide the equivalent of payments worth €60 per calf for some 32,000 herds, covering up to 550,000 suckler calves. In addition, we had the continuation of the €5 million beef technology adaptation programme, giving a total sector-specific package this year of €40 million for the suckler beef sector. That, of course, was distinct from the benefits to the sector of the disadvantaged areas scheme payments of €195 million and the single farm payment of €1.21 billion.

Another special feature of this year's budget was the Government's response to the severe storms and the damage these caused to harbours the length and breadth of the country. In addition to the increased provision for fisheries harbours, which rose from €8.6 million to €12 million, I announced an additional capital package of €8.5 million for the repair of publicly-owned piers harbours and slipways damaged during the winter storms in early 2014. The €8.5 million comprised €7 million for 111 projects to repair local authority-owned storm damaged harbours, piers and slipways and €1.5 million for remediation work at four Department-owned non-fishery harbour centres.

Looking to 2015, arising from the public finances situation, total Exchequer expenditure by my Department has reduced from €2.1 billion in 2008 to €1.219 billion in 2014. The 2015 expenditure ceiling for the Department was provisionally set down in the 2014 budget report as €1.005 billion in current expenditure and €168 million in capital expenditure but the financial determination of the 2015 allocation was postponed until after the completion of the Comprehensive Review of Expenditure 2015-2017.

Among the particular priorities this year is to provide an appropriate level of funding to launch both the new rural development programme and the seed food development programme under the European Maritime and Fisheries Fund. The successful negotiations of both the new seven-year rural development programmes and the seed food development programme will heavily influence the Department's current and capital spending plans for the coming years. The RDP provides for an overall funding envelope, EU and Exchequer, over the period of some €4 billion. As part of that decision, it was agreed that the total Exchequer allocation would be subject to an affordability review in 2016 but the members will be familiar with the figures we have committed to in terms of the 46% co-funding rate.

The June 2014 announcement by the Commission of an allocation of €146.3 million for Ireland under the new European Maritime and Fisheries Fund is significant for the sector. In aggregate terms, this is roughly a doubling of Ireland's allocation of EU funds relative to our allocations under the former EFF and EU financial instruments for sea-fisheries control and data collection. The Department is preparing a new operational programme within the EU co-funding framework, and this must be submitted for approval to the Commission shortly. The expanded EMFF will give rise to increased Exchequer co-financing of the sector which is being finalised within the budget process at the moment.

I hope that gives an indication of some of the issues we are managing at the moment. If members have any questions, I will be happy to answer them. Otherwise, we can go through the four different programme areas.

Simon Coveney (Cork South Central, Fine Gael)
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We spend it better.

Simon Coveney (Cork South Central, Fine Gael)
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To reply to Deputy Éamon Ó Cuív, we are trying not only to talk about numbers, but to set policy targets also. To be fair, the process probably began before we came into office. The targets are pretty general but the mid-year outputs are specific. An example relates to securing beneficial outcomes for the agrifood, forestry and fisheries sectors in EU and international negotiations. What we did in relation to the EU-Canada free trade agreement was very specific. I assure the committee that Ireland was in the middle of that. It would have been a very different deal if we had not been in terms of access to Europe for Canadian beef. We took a trade mission to the USA, which was very useful in terms of any future EU-USA trade deal. Likewise, some very constructive things were done in New Zealand, particularly with Fonterra.

While we did the specific things itemised, I take the point that if there are very general targets, it is easy to make the case that one is meeting them. It may be that for next year we need to consider more specific targets. However, one needs to set targets at the start of the year, which often change during the year. I am very involved in speaking to the European Commission about how we are responding to the Russian ban on agrifood exports. We now have butter and cheese in the scheme for aid to private storage, whereas it would previously have been only butter.

These are things that happen and which must be responded to, but they are covered by the general target of responding to international challenges as they arise. The document details many measures taken in order to make specific the more general targets that were set, but I take the point the Deputy makes; perhaps we should be more detailed in setting targets, particularly in the Food Harvest 2020 plan. However, last week we published this very detailed response outlining our position relative to the Food Harvest 2020 targets.

We are ahead of most in this regard. There is speculation as to whether we can meet the Food Harvest 2020 targets on beef, but in fact we are already meeting them. The beef target was a 40% value growth between when the target was set and 2020. We are at 39% already, so it is understandable that farmers are questioning whether it is wise to expand the beef industry when prices are weak, but we have met the Food Harvest 2020 targets for beef. Regarding dairy, we have had a 42% increase in value before any volume increase. We are ahead of schedule for practically all of the actual Food Harvest 2020 targets. That is why we will soon put a new programme in place for 2025, so that we will have a ten-year horizon with new targets, taking up new challenges like climate change, generational change, land mobility, and so on, which are all linked to productivity and modernisation within Irish agriculture and primary food production. That process will get under way soon.

I have to say, and I hope people will recognise that I am generous about this politically, the Food Harvest 2020 plan has been the best thing to happen to agriculture in many years. It was put in place by the previous Government, but we have picked that up, we have run with it, we have added to it and we have changed the targets. We invite professors from Harvard to come over and assess it each year under the pathways programme and challenge the industry at all levels on how they are meeting the targets that Food Harvest 2020 sets for them. That has been a very good focus for the industry from point of view of productivity, competitiveness and production. Of course there is another side to agriculture that we must look after, but the Food Harvest story has been a very good one and I would encourage people to read Food Harvest 2020 Milestones for Success 2014. It goes through in great detail, sector-by-sector, what we are doing and what we must do to keep the growth story going.

On Deputy Ferris's questions on dairy quotas, there is an assumption out there that if we produce less milk prices will stay stronger. There is a feeling that there may be a danger for small farmers that if we focus on volume output, we are becoming more commercial and that prices will decrease and margins tighten. Dairy is very different from beef, for example. Dairy prices in Ireland are almost entirely determined by the international price of traded dairy product. If we increased our output by 50% over the next five years, as planned, or if we did nothing to increase output, the price per litre of milk, in terms of price volatility, would remain more or less the same between now and 2020. We export 90% of what we produce and we are a small player in relative terms; if Ireland doubles its output we will still be a significantly smaller producer than the US state of Wisconsin, which produces 12 billion litres of milk per year at the moment. We currently produce just over 5 billion. If we get to 10 billion litres per year, which I think we could, we will still be smaller than one state in the United States.

It is important that people understand that we are operating in a world market in dairy products more so than in any other product, and there are both positive and negative aspects to that. For the last two years it has been fantastic because prices have been strong and there has been a shortage. Dairy consumption growth has been well ahead of dairy production growth and so we have had the strongest prices we have ever seen for dairy products for the last two years. That price is weakening now. We have two very good years for grain production and there is a direct correlation between cheap grain and milk prices weakening, which is exactly what is happening at the moment. Grain has been relatively cheap globally for two years, milk production has increased as a result, especially in the United States, and so the price of milk is coming under pressure. For us, on a grass-based system, the price of grain is far less relevant, so when grain is expensive we will be very price competitive in terms of producing milk on the back of grass. When grain is cheap, we will find it more of a challenge. Either way, Ireland is very well placed over the next five to ten years to produce more milk and to get a good return from that milk.

Choosing not to expand our dairy production and meet the Food Harvest 2020 targets would not contribute significantly to maintaining a higher price for smaller farmers because prices will be determined by markets outside Ireland, where we sell practically all our milk. I am probably over-emphasising that point, but we cannot make assumptions based, for example, on the view in the beef industry that once one goes over 30,000 animals a week the price seems to weaken. That is a matter for debate but this does not hold for dairy. New Zealand, for example, has quadrupled the volume of milk production in the past 30 years and the price has roughly doubled in the meantime. This is about world markets for dairy products and it is about getting into markets that can pay premium prices for premium product.

Simon Coveney (Cork South Central, Fine Gael)
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That is a fair point. I have met all the banks in Ireland on multiple occasions to discuss this issue. Many farmers in New Zealand are effectively working for the bank rather than themselves. We cannot allow that to happen to a new generation of Irish farmers with the excitement around quota expansion. Ironically, in some ways the weakening of dairy prices forces dairy farmers to ensure that their business plan is robust. In terms of investment proposition and increasing output, anybody can build a business on 40 cent a litre, but can this be done on 30 or 28 cent a litre? I have said to all the banks, and they say they are listening, that they should insist on business plans on the basis of 30 cent a litre and no more. Some are looking for plans based on 28 cent a litre. If milk has a higher price than that, which I hope it will have, then all the better, but that should be the basis for the business plan.

There is also a big job for us to do in training new dairy farmers, and that is why we are investing significant money in knowledge transfer, discussion groups and education programmes. Our plans for expansion will, in my view, be realised.

Along with the Taoiseach and a few others, I had the privilege of opening some new facilities for Dairygold during the week. The total value of the investment in the two projects in Mallow and Mitchelstown was about €120 million. As a farmer-owned co-operative, Dairygold has direct access to information from the farmers, and based on this it is planning for a 57% expansion in volume in the next five years. This is because Dairygold comes from a part of the country that can do that. Glanbia will have similar figures, somewhere around 60%. Dairygold and Glanbia will probably have the highest figures, but the others are not a million miles behind. Even in Deputy Ó Cuív's part of the country they have very ambitious plans for growth and expansion. The key is for them to operate on the back of good business plans as opposed to having inefficient systems spending money that they do not have, and to put pricing models in place in the dairy sector that can insulate farmers from the price volatility that will undoubtedly happen.

Prices will weaken for the next six to eight months, but I think they will strengthen again after that period. We will get weather patterns that will result in crop failures, and grain and milk prices will increase again. That is the kind of pattern that we have to get used to. We are very well placed to insulate ourselves where possible from that price volatility because of the steadiness of grass production systems in terms of input costs and because we are developing a premium brand around Irish dairy. This is no longer about commodity trading of skimmed, semi-skimmed and whole milk powders, although we have some of that. It is now about premium cheeses and butters - we produce the premium butter in the world in Kerrygold - as well as infant formula and nutrition, sports nutrition and so on. All of that premiumisation of the dairy industry helps to insulate us from the price volatility that exists when one is trading commodities.

Simon Coveney (Cork South Central, Fine Gael)
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The one financial question that you asked me, Chairman, concerned the training and research budget. This looks to be way under-spent. The research programmes and the call for new expenditure always happen in the autumn, so there will be a dramatic increase in expenditure between now and the end of the year. Some of the schemes and funded research programmes are very much autumn-focused.

Simon Coveney (Cork South Central, Fine Gael)
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I suspect they do. If we are going to have about 300,000 more cows in our herd between now and 2020, which is an increase of approximately 25% to 30%, we will get the other 25% growth from increased yield in cows. As a rule of thumb, it takes about one person to milk 100 cows. That is a conservative figure so it may take more in many family farm situations. That means that we are going to have an extra 3,000 people milking cows in five years. Many of those people will not have farms but will be coming in to milk on other people's farms. This will be similar to the current situation in New Zealand, where professional dairy experts advise on management, grazing, feeding, delivering the best yield and feed conversion efficiency, and all of the other things that our dairy industry will be about. This requires training programmes and we are putting some of those in place as we speak, although more are needed.

On the beef question that Deputy Deering asked, we have spent more time on beef this summer than anything else and I suspect we will also be spending more time on it this autumn than anything else. The big target market for the next six weeks or so is the US. We have been working on that for two years and are more or less through all the barriers. Irish beef will be the first European beef into the US market in 16 years, since BSE, and for the first time ever the price of beef in the US is as high as the price of beef in Europe. It is a great time to be getting into the east coast of the US in particular. It will be a big new opportunity for us.

In recent days we have also finalised veterinary certification for exporting beef to Iran, and ironically I have had two meetings with the Iranian ambassador in the past ten days and am meeting a political delegation today. We may take a trade mission to Iran in the spring. They have 80 million people and import a fortune's worth of beef, from Brazil at the moment. They are very interested in trying to get European and Irish beef back into Iranian markets at premium level. We are also going to China in six weeks' time. We will have at least 60 Irish companies with us and all the big beef companies will be there. We are currently selling about €40 million worth of beef hides into China, but if we can sell beef into China and can get the restrictions removed, this would be most exciting as there is a very high-end premium market in big cities like Shanghai, Beijing and Nanjing.

The two markets that will excite the industry most are the US and China, however last year we opened markets in Japan, Qatar, Saudi Arabia, and UAE. Previously 40% of beef in Saudi Arabia was Irish, so these markets have been a proven success story in the past, and there are multiple new market opportunities opening up for us. This is why we should be able to slaughter more than 30,000 animals a week in the future, and still get premium prices for our products. However, we have to be very proactive in opening up some of these new premium markets.

Simon Coveney (Cork South Central, Fine Gael)
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The Deputy is covering a lot of schemes.

Simon Coveney (Cork South Central, Fine Gael)
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My apologies.

Simon Coveney (Cork South Central, Fine Gael)
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The target was to carry out 85,000 TSE tests on prescribed animals, and to date 48,000 have been tested. On animal health, we have learned some valuable lessons from the horsemeat issue. Safety and hygiene inspections and supervision in factories protect the reputation of our industry. If our reputation is damaged, our capacity to enter the new markets we have discussed is affected. Within our Department it would not be an exaggeration to say we are somewhat obsessed with hygiene and food safety. We need to be because when things go wrong it is as if there is a red alert in the Department due to the potential for reputational damage. That is why we have carried out 9,500 food safety and hygiene inspections. By the end of June 8,500 were done. We were supposed to do fewer than 9,500 in the full year but by the end of June we had almost reached the threshold. We will go way beyond the targets we have set for ourselves. We overdo inspections from a safety and hygiene perspective for the reputational reasons to which I referred.

In terms of the all-island strategy, animal and plant health is probably the main and most consistent feature of the North-South Ministerial Council meetings. It is constantly inching forward. There are some problems about which it is important to be up-front. We have spent a lot of money and time building the reputation of Irish beef and dairy products. We have an orange and green programme and quality assurance schemes, and a dairy sustainability assurance scheme is being rolled out. Many of these schemes are not being taken up in Northern Ireland. We have to ask what is the target. In terms of the broader politics, I want a united Ireland at some stage in the future which deals with these issues collectively as a food-producing island. In the meantime, we are working to ensure there is co-operation, collaboration and partnership around managing risk in terms of animal and plant health spread. A good example of that is how we are dealing with ash dieback disease, where there is very close co-operation. We have led on the BVD scheme; there is good partnership and it is being implemented. The North is slightly behind us, but on Johne's disease it is slightly ahead. We are working with it in order that we have the same types of scheme.

On TB, unfortunately there are differences of approach for political reasons. Our approach has been hugely successful. There is a slightly different approach in the UK but we work quite closely together. There are lots of good examples of efforts to create ease of movement of animals North and South in terms of trade and trying to manage risk in terms of disease and animal health so we can create the kind of consistency which, it is to be hoped, will allow us to have a brand around an Irish product coming from the island of Ireland. However, the risk should not be ignored in our efforts to be open to partnership with the North. The risk is that if a product is labelled as Irish but comes from Northern Ireland, and there is a problem such as dioxins, disease or whatever which compromises food safety, as the Minister for Agriculture, Food and the Marine I have to stand over it, even thought my vets were not in the factory where the animal was slaughtered or at the processor which packaged the product. We need to have very tight protocols with Northern Ireland to ensure there are common standards, because if I am to stand over something which was produced in a different jurisdiction there are risks.

There are other issues with regard to currency, for example. If all milk in Northern Ireland is deemed to be part of the Irish milk pool on the island of Ireland and sterling weakens, there would be competitiveness issues which we could not ignore. There are similar difficulties with petrol. We have to manage the North and South in a way that focuses on partnership and working together mutually to build up a reputation for food being exported from the island. I would be open to joint trade missions, for example, but I do not want to undermine the fantastic work done by organisations such as Bord Bia to build a reputation around Irish food produced under our system, which involves controls, checks, inspections and all the rest. The industry is worried about that in the context of a broader ambition to create an island-of-Ireland approach towards food production.

Simon Coveney (Cork South Central, Fine Gael)
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The only issue is that many of these schemes are voluntary, but they have effectively become non-voluntary. Let us consider the beef quality assurance scheme, setting aside what the Irish Cattle and Sheep Farmers' Association has been saying recently. There is an increasing take-up of the quality assurance scheme because farmers get better prices for their beef. Several factories will not now take beef that is not quality-assured. Therefore, it is effectively becoming mandatory. It is part of the premiumisation of Irish beef.

Farmers in the North can buy into that if they want, but there is a far lower take-up. I get what Deputy Ó Cuív is saying. I have been very open to the rolling out of Bord Bia programmes in the North. In fact, quality assurance schemes are available to Northern farmers in many cases. Anyway, we have some work to do yet to create an all-island standard. There are some in the North who would be far happier remaining with British standards. It is an ongoing discussion and we will have it again on Friday week, I suspect, at the next North-South Ministerial Council meeting.

Simon Coveney (Cork South Central, Fine Gael)
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Which section is €5 million above?

Simon Coveney (Cork South Central, Fine Gael)
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The current expenditure outturn for 2014 is currently €128 million. The estimate was €203 million. The expenditure does not always happen in an even manner throughout the year.

Simon Coveney (Cork South Central, Fine Gael)
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Yes, I think so. My understanding is that we are likely to spend our full Estimate this year. That has not always been the case and obviously the process is managed. My understanding is that this is the case. We have made savings in terms of food safety, animal health and so on. Let us consider TB, for example. I am unsure whether it was Deputy Heydon or Deputy Deering who said that we are not making progress on TB. In 2009 there were 23,500 cases of TB. Last year, there were 15,500 cases, fully 9,000 fewer animals. There has been phenomenal progress on TB.

Simon Coveney (Cork South Central, Fine Gael)
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That is the case at the moment. We target resources, including for culling badgers. Herds are frozen, effectively, once there is an outbreak. We are trying to isolate problems, deal with them, slaughter the animals, compensate the farmers and deal with the wildlife issue, including badgers, and I know there is a potential issue with wild deer in the Chairman's area. We must take on these issues, as difficult as they may be. Let us consider the average figures nationally. We have gone from spending approximately €60 million per year on this problem four or five years ago to spending €34 million per year now. It is major progress.

Simon Coveney (Cork South Central, Fine Gael)
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I take your point, Chairman. If there are specific problem areas we will have to try to develop solutions for those problem areas.

Simon Coveney (Cork South Central, Fine Gael)
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The figure for BSE testing is rather small.

Simon Coveney (Cork South Central, Fine Gael)
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The figure is €1.25 million.

Simon Coveney (Cork South Central, Fine Gael)
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We are still carrying out many testing programmes on carcasses to ensure that we are monitoring and on top of that, but it is down. The actual test is not a big expense; compensation is the main expense. Sorry; I am referring to TB. BSE testing represents small money.

Deputy Deering asked me about the fodder crisis. Let us recall when the fodder crisis arose. It had been predicted because we had an extraordinary weather pattern involving a very bad winter, no summer and then straight back into another very wet winter. There was virtually no break for farmers for almost 18 months. Land was totally sodden. Then we had a late spring.

We had virtually no grass growth in much of the country and even where there was growth, the ground was too wet to put animals out on it. An extraordinary number of weather patterns, one after the other, added hugely to the problem. We learned significant lessons from this. We are now in a very healthy position and have been all year in terms of fodder. We had a great summer last year and again this year, the inverse of what happened previously. We had a mild and relatively dry winter and probably the best grass growth ever this year. Some farmers are taking four cuts of silage.

We are entering winter this year in a healthy state from a stock point of view. Teagasc now conducts a national audit of fodder availability at intervals to ensure we are properly prepared. We will not always have summers like that we have just had and need to prepare for the kind of nightmare scenario and weather patterns we had two years ago and ensure we have enough fodder in stock next time. We do not want to have to import grass from France and the United Kingdom. From our perspective, that is a bit like Eskimos importing snow. We should never find ourselves in that position again. Farmers, dairy farmers in particular, have learned lessons from what happened.

Simon Coveney (Cork South Central, Fine Gael)
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Will the Deputy put that question again please?

Simon Coveney (Cork South Central, Fine Gael)
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First of all, I would not accept that. I think there are more people working in those sectors now than there were before. I do not have an exact number on that.

Simon Coveney (Cork South Central, Fine Gael)
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If one looks at the seafood and fish processing sector, there are more jobs now than there were before.

Simon Coveney (Cork South Central, Fine Gael)
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I heard what the Deputy said. As regards forestry and agriculture, if one asks the CSO for clarification of its figures, it is not talking about the food industry but about primary sectors. There is a slight increase in the numbers this year, whereas last year there was a significant increase, although the same methodology was used. I am not suggesting that there is a massive flocking to the land, but the numbers of young people studying agriculture-related courses and those attending agricultural colleges have increased dramatically compared to three or four years ago. Presumably those young people are going somewhere when they leave agricultural colleges. On more than one occasion I have had to increase the staff availability for Teagasc to deal with the number of young people seeking to study farming and agriculture. I think it is credible that there are increased numbers, but to know whether they are as significant as was suggested last year in the CSO report, one would have to ask the CSO.

As regards overall spending on CAP, there was some reduction in the Pillar 1 spend and some adjustment in the transition. However, we are still talking about €1.2 billion or more. It is still a very significant spend on Irish agriculture. The whole point of what we are trying to do in agriculture at the moment is to help farmers make more money from the marketplace, rather than talking indefinitely into the future about solely making a living from the amount of money that comes from Europe. The money we get from Europe should be about supporting incomes for farmers. It is also about helping farmers who do not have the capacity to increase their income from the marketplace because of the challenges and disadvantages they have and the types of farm they have. Primarily, we should be spending money to allow farmers to produce better, safer and more premium products that they can get better prices for. That is what we are trying to do with the Food Harvest 2020 programme.

The average spend on the rural development programme, RDP, over the lifetime of this CAP will be €565 million. That was agreed with the Minister for Public Expenditure and Reform, Deputy Howlin. We are only spending €405 million on the rural development programme this year. So Deputy Ó Cuív is right; it will take a while to ramp this up.

Simon Coveney (Cork South Central, Fine Gael)
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Farmers can look forward to an increased RDP spend every year for the next six years if we are going to get to an average spend of €565 million. However, we cannot go straight from €405 million to €565 million overnight, given budgetary constraints and the expenditure profile. It does show the success of negotiations around getting Exchequer co-funding for a rural development programme which is essentially the same in value terms as the last rural development programme. Given the budgetary pressures we now have, I think that is a pretty good achievement.

We are currently spending €23 million on the beef genomics scheme, but we will be spending €53 million when it is fully up and running. The figure will be €43 million next year plus €10 million, which is €53 million for the suckler beef sector. It is true to say that we are focusing on the genomics scheme for suckler beef, but the dairy industry has been focused on genomics for years - it just has not been paid for it. Those in the industry get their money from better breeding and better-performing animals in terms of DNA assessments and genomic research in dairy. The Deputy is right that in future, as we see an increased dairy herd size, we will get more beef animals coming from the dairy herd. As we see more developments on sexed semen, we will see dairy farmers being able to essentially set aside perhaps 15% of their breeding for replacements. They will then be breeding the rest of their herd to beef animals or bulls in order to get a much better beef animal coming out of the dairy herd. That is a good thing because it will raise standards. I still think the best beef in the country will come from the suckler herd and I certainly hope it will get the highest price abroad.

We need to look after the suckler herd. The last thing we want is to see beef become a by-product of a growing dairy industry. That is why I have been putting a lot of money into the beef sector, particularly the suckler beef sector, when there has not been a lot of money around. We will see that happening into the future also.

Deputy Pringle raised the question of foreign fishing vessels. Prices for whitefish have not been great this year and there are a number of reasons for that. Part of it was that early on in the year there was very little fishing going on. In fact, in January and February we only caught half our normal quota. In an effort to try to get some cashflow back into the industry we agreed to increase quotas significantly in March and April. Other countries did the same and there were market problems in terms of oversupply for a lot of whitefish in those months. I am aware that there are price pressures on the whitefish sector but I am not convinced that that is because of foreign vessels landing in Ireland. If we cannot catch fish with Irish trawlers the next best thing is to have foreign trawlers landing into Irish ports, where we can process, package, add value and grade fish. We can thus employ people in rural coastal communities to do that. There are good examples of that in the pelagic sector, including with blue whiting in Killybegs. There are also some good examples concerning whitefish in places such as Ballycotton and Castletownbere.

I have not received feedback that foreign landings are undercutting prices in the whitefish sector at the moment. We must remember that most of this product gets exported anyway and is sold in the same markets it would be sold into if it were being processed in La Rochelle, Brest or Vigo. However, since the Deputy has asked the question, I will make a few inquiries into it. Not everybody likes the idea that foreign boats are landing more into Ireland. Personally, I think it is a good thing for the sector. It is a way of increasing the volume of fish through our port infrastructure.

I was also asked about aquaculture. The number of licences we have got through so far this year is pretty low. I do not have an exact figure, but nearly all the licences we got across the line last year - and there were more than 200 of them - were effectively in the last quarter of the year. Twenty-five licence determinations are expected for Donegal Bay, with 60 for Dungarvan Harbour, another 60 for Clew Bay, 11 for Valentia and the Portmagee channel, 35 for Galway Bay and 70 in Kenmare Bay. We are trying to do everything we can to progress aquaculture licences when and where appropriate, and to have a transparent and robust system to do that. The Deputy knows only too well that if one does not do this properly one will be in the courts, and it will be a much longer process.

The processing of applications for dairy equipment received in the final tranches under the first targeted agricultural modernisation scheme, which closed on 31 December 2013, is continuing. All applications are now being examined under the dairy equipment scheme and farmers are being notified of any errors. In the case of the sheep fencing/mobile handling equipment scheme, fewer than 400 applications remain on hand.

These applications should be processed by the end of October. The final date for completion of work is the end of August 2015. A new TAM scheme will open in January.

TAMS is not as straightforward as one might think. People apply, get a basic approval, and then sometimes nothing happens. Then they demand an inspection before they can commence work, at a time that suits them, which does not always result in an inspection when they want it, and so on. We also have many approvals that have not resulted in drawdown. Perhaps people are waiting to see what happens with dairy prices before they go ahead and spend money. Next year we will budget for a significant TAMS spend, particularly in dairy, but also in other sectors.

Simon Coveney (Cork South Central, Fine Gael)
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We are required to do certain things before we spend money that is co-financed from Europe. If farmers start work before getting approval, we cannot give them any money. There is an initial approval process and then there is an inspection and a whole series of form-filling, and quotations are needed from multiple contractors to ensure that farmers are getting value for money and so on. It is a bit tedious, but many farmers have worked the TAMS system well and it has worked well for them. We will look at it again next year to see if we can improve the pace of turnaround, but sometimes people get approval and they sit on the approval without doing anything for quite some time. Then, when they decide they do want to move forward, they contact the Department and want an inspection straight away so that they can get on with the work. We will review it and see how we can do things more efficiently for farmers before we open up new TAM schemes in January and February, but for many farmers the system has worked reasonably well.

Simon Coveney (Cork South Central, Fine Gael)
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On what?

Simon Coveney (Cork South Central, Fine Gael)
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I cannot give the Deputy a timeframe because until I get a timeframe for recommendations on my desk, I cannot make decisions and I am reliant on others to do that. That project has complications. It is a very big application. It is a new departure in some ways for salmon farming in terms of scale, and so it is coming under much scrutiny. I have said to the Deputy and to others in the Dáil that I would not grant approval for a project of that scale unless I was absolutely satisfied of-----

Simon Coveney (Cork South Central, Fine Gael)
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Hopefully we will make some decision on it this side of Christmas, but the project has moved very slowly. To be honest, it has been very frustrating from my perspective.

Simon Coveney (Cork South Central, Fine Gael)
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The main component here is the disadvantaged areas scheme, DAS, but it is relatively straightforward. There will not be much change; it is moving from one CAP to another. However, the assessment of land under DAS will change in the coming years. Farmers who have genuinely disadvantaged land are the ones getting the payment. We will have some flexibility on that, as obviously there will be regional stresses, and it will not be easy because nobody likes losing and everybody wants to gain. We will manage it as best we can and we will work with farming organisations in a very open way on that. That does not take effect until the end of 2016, as far as I remember, in terms of the land-based assessment, which will be measuring moisture capacity, quality of soil, depth of soil, etc.

Simon Coveney (Cork South Central, Fine Gael)
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If I could correct myself, Chairman, the new biophysical criteria for what we call the DAS but which will in future be called ANCs, must be in place by the end of 2018, so there is a bit of time, but there is a huge amount of work involved in assessing land plots. There are also many difficult decisions to be made. One of the things I hope people will welcome in terms of differentiating between the challenges faced by farmers is the new island payment, whereby farmers living on an island will get an additional €150 per forage hectare. The original recommendation to me was for much less than that, but I thought we needed to give a decent chunk of money to farmers who farm on islands, or else we will not see a new generation of farmers on these islands. For farmers who are not resident on islands but who have stock on them, there is a rate of €75 per forage hectare. We are trying to give considerable top-ups to farmers who are operating in difficult conditions in many cases on islands. It is really important that we keep farmers on islands. Otherwise we will see the vegetation there changing and they will become unfarmable if we do not keep them stocked. Whether it is the south west, the west coast, or the north-west coast - there are probably a couple on the east coast as well - this is a new departure for island farmers and it seems to have gone down well.

Simon Coveney (Cork South Central, Fine Gael)
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That is true.

Simon Coveney (Cork South Central, Fine Gael)
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We have not differentiated between individual islands. Cape Clear is probably quite different from the Aran Islands, which are different from Beara, which is different from Sherkin. If we were to assess all of those islands and vary the payment depending on-----

Simon Coveney (Cork South Central, Fine Gael)
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That does not necessarily follow because there are lands that are not designated as disadvantaged at all, that are not overly productive either. We will first assess the level of disadvantage of land on the basis of biophysical criteria as we are required to do. Once we have this done, we can make further decisions.