Oireachtas Joint and Select Committees

Wednesday, 30 September 2015

Joint Oireachtas Committee on Agriculture, Food and the Marine

Estimates for Public Services 2015: Vote 30 - Department of Agriculture, Food and the Marine

11:00 am

Photo of Andrew DoyleAndrew Doyle (Wicklow, Fine Gael)
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I welcome the Minister for Agriculture, Food and the Marine and his officials. We just had a discussion, which delayed us a little, about the nature and structure of the whole system under consideration here. I think there is general frustration among the members of the committee with the way the performance indicators, as they are currently outlined, work - or do not work.

Due to the limited time, rather than go into session 1 we will move straight to part 2, the opening statement from the Minister. At the end of the meeting, the committee will make a report on the outcome of the deliberations and lay it before both Houses, as well as circulating it to the working group of chairmen. We would like to see if we can find a way for the Departments, the committee secretariat and the liaison group to come up with a more workable formula. We have been shown a model based on the New Zealand model, which may represent best practice. Perhaps that could be further developed.

As it is, there is frustration with how the indicators are laid out. For example, the projections mention Origin Green, but it is not clear how that manifests itself as a benefit to the Department. Bord Bia takes care of it. Will it result in a better outcome for the agri-sector? In the same way, the enactment of the consumer and competition Bill is mentioned, although this Department is not directly responsible for it. At the same time, it is clear that, if implemented and enforced, the Bill would give tools to the relevant authority which should benefit the agriculture sector. When a target is given without explanation, it seems a little bit vague and people have to pick up on it.

Photo of Simon CoveneySimon Coveney (Cork South Central, Fine Gael)
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Can I respond to some of those claims?

Photo of Andrew DoyleAndrew Doyle (Wicklow, Fine Gael)
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Yes.

Photo of Simon CoveneySimon Coveney (Cork South Central, Fine Gael)
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We have looked at the criticisms. Perhaps the Chairman will give me a couple of minutes to respond. I can also answer questions, if he so wishes. We are a little tight for time, but it is up to him to decide.

Photo of Andrew DoyleAndrew Doyle (Wicklow, Fine Gael)
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I will give the Minister a couple of minutes and then he can make his opening statement.

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

Photo of Andrew DoyleAndrew Doyle (Wicklow, Fine Gael)
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First, I shall mention privilege. 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 by name or in such a way as to make him or her identifiable.

I invite the Minister to make his opening statement.

Photo of Simon CoveneySimon Coveney (Cork South Central, Fine Gael)
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Today I will also attend a meeting of the Joint Committee on Justice, Defence and Equality to discuss the mid-year Estimates, where we will go through the same process. We have used the committee system to introduce better performance measurement and management tools in order to ensure there is more transparency around how Departments perform. Their performance can be tested in committee. This committee's secretariat has done a good job by putting a paper together which contains constructive criticism. It deals with the Department's measurements and its internal processes, but claims that the generalised statements do not give committees enough details to get stuck into in terms of compiling questions. I accept that claim to a certain extent. It is important that we respond to some of the criticisms. People now apply the New Zealand model to what happens in Ireland. People want to know why we cannot do things like New Zealand. There are a lot of good things in the New Zealand model, but that country faces different challenges from Ireland. For example, half of the expenditure that comes through my Department is EU money, and there is a whole series of requirements to go along with that funding, such as inspections and audit systems. Ireland is assessed regularly throughout the year, in a very detailed way, by the European Commission. It ensures that our systems are robust, analyses how we spend the money and assesses whether we get value for money. If we fail in any of those measurements we get significant disallowances. New Zealand faces none of that because it does not have a Common Agricultural Policy.

A big part of our performance indicators are audited by the European Commission, which spends well over €1 billion through my Department each year. There are very tight control and monitoring systems that we are obliged, through the legal regulations of CAP, to deliver on, and we cannot just ignore all of that. When we talk about a wish to deliver control and inspection programmes to underpin the protection of funds and their timely delivery, the committee secretariat says that is an example of our supplying information that is vague or is not definitive in terms of targets. The targets that are set for us have been set down in regulations and they are absolutely definitive. The Department is not perfect but there are a lot of good things happenings, in terms of performance indicators, that we need to apply, particularly with regard to EU moneys that are spent.

There is no other Department - apart perhaps from the Department of Jobs, Enterprise and Innovation, through its Action Plan for Jobs programme - that is more focused on long-term and medium-term target setting, delivering on these targets in terms of deliverables and recommendations, and measuring them on a monthly, never mind an annual basis, than the Department of Agriculture, Food and the Marine.

Every year my Department publishes a report entitled Milestones for Success. Earlier, the Chairman mentioned Origin Green and the sustainability journey. My Department writes a full report every year which, to my knowledge, has never been debated by this committee. That situation is a reflection on us. Perhaps we should have brought it in here. The Milestones for Success reports are published every year; they are in the media every year, and we launch them. A huge amount of work goes into compiling them. It is a fair criticism by the committee that we have not debated those reports here, because they are actual deliverables that we need to get across the line, and those in the industry are involved in that as well.

We have a plan, Food Harvest 2020, that was put together by the last government, to its credit, which contains 215 recommendations that needed to be acted upon and completed. There is now a report that measures our outputs in terms of those recommendations. I do not see the same thing happening in New Zealand. We now have a Food Wise 2025 programme which has 386 recommendations. I chair a monthly meeting with all of the stakeholders, which included, in the past, an implementation group for Food Harvest and now includes the same for Food Wise. We had a meeting this morning where we went through the recommendations and identified who was responsible for all of them. Four key agencies are responsible: BIM, Bord Bia, Teagasc and Enterprise Ireland. As chairman of the stakeholders' group, I point the figure and say to people, "Who takes responsibility for X, Y and Z?". I ask when will they be delivered on and say, "Let us assess as we go along." To be fair, this committee should be involved in some of those discussions a little bit more than heretofore. I accept the criticism, if it is one, that we have not been more open about setting targets. There are 23 items in an Action Plan for Jobs that we need to finalise. I can assure the committee that the Taoiseach will point his finger at me if we do not get those things done.

I accept that we can improve. I accept that we need lean management systems across all Departments which insist on continuous improvement and allow committees such as this one to benchmark performance, under whatever performance indicators we agree on, so that we can show we are improving year on year. If we do not improve then the committee must ask us hard questions that we must answer.

The suggestion that we have tried to avoid setting targets and deliverables is an unfair criticism. It may be a fair criticism to claim that we have not introduced targets and deliverables to the discussions that we are having with the committee. I am anxious to work with the committee on this matter. If we can improve how the Department measures its output, I am confident that we will score pretty well. The New Zealand model is relevant and there are elements of it that we should do more of here. We have also done other things very well, and we should not pretend that has not happened. That is the only comment I want to make on the matter. I am open to making the Secretary General and anyone else in my Department available to the committee and its secretariat so that we can all work together to improve things for next year.

Photo of Éamon Ó CuívÉamon Ó Cuív (Galway West, Fianna Fail)
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The debate we had was not about the total amount of information that the Department gives to Europe or the amount of information that it gives in public documentation. It is the process of accountability to this Oireachtas for the money that is given by the Oireachtas to Ministers to spend. It is unreasonable for the Department to expect Deputies and Senators to get all of this information from all the various documents and create a parallel set of indicators. From what the Minister has said, the Department has much more definitive indicators in all sorts of other accountancy systems, but it shares them with the Oireachtas in a direct manner. In other words, they are not written in the Book of Estimates. Let us look at the information we got this week. All of the subheads used to be published in the Revised Estimates, but this week, for example, we got a breakdown of REPS, the agri-environment options scheme, AEOS, GLAS, etc. under a heading of "Agri-environment schemes." We are in the last day of the ninth month, but we got a breakdown that used to be published in the Revised Estimates.

Photo of Andrew DoyleAndrew Doyle (Wicklow, Fine Gael)
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I advise the Deputy that there is a vote in the House.

Photo of Éamon Ó CuívÉamon Ó Cuív (Galway West, Fianna Fail)
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Nobody knows who is going to be where next April. We need, as an Oireachtas, more accountability to the taxpayers of Ireland, and this meeting is the only place where such analysis takes place. Not to the EU, not to Bord Bia, but here in this room.

Photo of Andrew DoyleAndrew Doyle (Wicklow, Fine Gael)
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I advise everyone that there is a vote.

Photo of Simon CoveneySimon Coveney (Cork South Central, Fine Gael)
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For the record, we publish all of that information.

Photo of Éamon Ó CuívÉamon Ó Cuív (Galway West, Fianna Fail)
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It is not in the Revised Estimates.

Photo of Simon CoveneySimon Coveney (Cork South Central, Fine Gael)
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The information is on the Department's website and we publish it voluntarily.

Photo of Éamon Ó CuívÉamon Ó Cuív (Galway West, Fianna Fail)
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The Revised Estimates used to give all the subheads as a matter of course.

When we introduced performance indicators, suddenly and miraculously, it disappeared out of the Revised Estimates. It is fine to say it is here and there but the Minister will know from being a backbencher previously what is involved in terms of resources to start going to this and that website and so on. I believe it should all be in one place and easily accessible for us to do our work. I believe that through interaction with senior officials in the Department we could come up with a far more efficient way of doing our business.

Photo of Andrew DoyleAndrew Doyle (Wicklow, Fine Gael)
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I may have to suspend the meeting in a moment. I think there is agreement. Perhaps the monthly milestones could be discussed with the Department officials without having to wait for the Minister to be available to discuss the performance indicators. Similarly, with Food Wise 2025 and the implementation groups, perhaps we could get a periodic report on how implementation is working across the sectors. That might be useful for the committee because it would represent an overview. After that, we can get down to the money end of it. Anyway, we need to get at it earlier, unfortunately. The fact that the budget has been brought forward two months has not helped the process either.

I have to suspend the meeting because another vote has been called in the House. Perhaps we can get agreement after the vote. There are four Government Deputies and one Opposition Deputy at the moment. If we had two more Opposition Deputies we could have agreed to move on. However, we cannot get agreement and we have not spoken to the Whips.

Photo of Éamon Ó CuívÉamon Ó Cuív (Galway West, Fianna Fail)
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What do you mean?

Photo of Andrew DoyleAndrew Doyle (Wicklow, Fine Gael)
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We could have agreed to continue without voting. We are going to suspend the meeting now anyway.

Photo of Simon CoveneySimon Coveney (Cork South Central, Fine Gael)
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I presume people are not paired.

Photo of Andrew DoyleAndrew Doyle (Wicklow, Fine Gael)
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No, they are not paired. We will be back as quickly as we can.

Sitting suspended at 11.40 a.m. and resumed at 12 noon.

Photo of Andrew DoyleAndrew Doyle (Wicklow, Fine Gael)
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I understand the Bill is going to finish today at 12 noon. With luck we will not be called out again. It always happens when we are under tight time restraints.

We have thrashed out a general overview of the accountability issue and how to try to develop a better working relationship between the Department and the committee. I will move on to the Minister's opening statement. I gather we only have an hour. Is that correct, Minister?

Photo of Simon CoveneySimon Coveney (Cork South Central, Fine Gael)
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Yes. I have until 1 p.m.

Photo of Andrew DoyleAndrew Doyle (Wicklow, Fine Gael)
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We are tied to an hour. When the Minister concludes his opening statement, perhaps members will ask up to three questions each. If they have general point on the programme as well, we can go through the subheads. Otherwise, we will not get through them. Is that agreed? Agreed. We will try to get around to the Minister after one round of questions.

Photo of Simon CoveneySimon Coveney (Cork South Central, Fine Gael)
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I am in your hands. Whatever way you want to do it is fine by me.

Photo of Andrew DoyleAndrew Doyle (Wicklow, Fine Gael)
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I call on the Minister to make his opening statement.

Photo of Simon CoveneySimon Coveney (Cork South Central, Fine Gael)
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I will go through it quickly and then we can move on to questions. I am very pleased to accept the committee's invitation to this hearing. This is a valuable opportunity to review how we are progressing with the various challenges and opportunities presented across the various sectors in agriculture, food development, marine and forestry and to talk about market prospects across these areas and new investment opportunities for the coming year.

The agrifood sector continues to play a considerable role in our economic recovery. The sector remains Ireland’s largest indigenous industry and accounts for almost one in nine jobs, many in rural and coastal areas where few other employment opportunities exist. Earlier this year Bord Bia confirmed a fifth consecutive year of growth in agrifood exports. The value of Ireland’s food and drink exports grew by some 4% during 2014 and reached almost €10.5 billion, which is another all-time high. That is some €3.2 billion higher than in 2009, representing an increase of more than 45% in that period.

In July the Taoiseach launched a very important plan for a new ten-year strategy for the agrifood sector, aptly named Food Wise 2025. Food Wise 2025 predicts that over the next decade Ireland can: increase the value of agrifood exports by 85% to €19 billion; increase value added to the sector by 70% to €13 billion; and increase the value of primary production by 65% to €10 billion. This should deliver a further 23,000 jobs in the agrifood sector by 2025 and will present many challenges for us to face. I think that prediction of 23,000 jobs is quite conservative.

In April this year the milk quota system ended and opened up opportunities and sustainable growth for the dairy sector for the years ahead. Nationally, we can conservatively predict that the next five years of dairy expansion will deliver approximately 10,000 new jobs across rural Ireland. Ireland’s plan for a 50% increase in milk volume in five years is unmatched in the EU; other member states expect no more than 20% extra milk. Almost simultaneously with the ending of the quotas, a number of factors, including a Russian ban, reduced demand for dairy product and increased stocks and production in China have resulted in significant downward pressure on dairy prices. I think we are all familiar with that. This is putting significant pressure on farmers. It is a global issue but it is also very much an Irish issue and it is not possible to address to it in isolation here in Ireland. I am engaging on a continuous basis with EU counterparts and the Commission to ensure that every possible measure is taken at EU level to mitigate the effects of the current situation.

The key measure recently given effect by the Commission is the facilitation of advance payments of 70% under the direct payments scheme and 85% for rural development schemes before completion of controls. In other words, €750 million will given out next month on 16 October, which would not, or certainly that amount of money would not, have been given out but for that advance payment. This will be of significant benefit in terms of easing the cashflow of farmers.

Furthermore, the European Commission announced earlier this month that it is providing a €420 million direct aid package for European farmers. Ireland’s share of this fund will amount to just under €14 million. Among other measures announced, the increase of more than 100% in the rate of private storage aid for skimmed milk powder is very significant, as well as storage aid for cheese. We had our first meeting of the dairy forum yesterday and I was very blunt and forthright with the farming organisations in terms of trying to get some feedback from them as to how they wanted us to spend that direct income support for farmers. I agree with them that we should look at basing our distribution model on flat-rate payments, which, I think, will positively discriminate in favour of smaller farmers. That would be a good thing to do. It is not a huge amount of money but it will help cashflow for many dairy farm families. We need to separately allocate some money for the pig sector as well and we will probably give some priority to young farmers by way of some percentage top-up in terms of those flat-rate payments as well. I would be interested in people's views on that approach. We have not finalised any decisions.

I can assure members that I will continue to work with the industry, other member states and farming organisations to consider how we can refine and improve mechanisms to help farmers to cope with downward price cycles when they arise. We spent a good deal of time yesterday talking about price volatility.

Today’s meeting will allow us to look back over the year to date, look at the remainder of the year and, as we are now close to budget 2016, it will allow me to get some feedback from the members and to take questions from them in that regard. In the financial data we have supplied, we have tried to tie the financials and the outputs together in the briefing and I am happy to elaborate on any elements the members may wish to discuss. This year the Exchequer contribution to the Vote of my Department amounted to €1.26 billion, €1.044 billion in current expenditureand €216 million capital expenditure.This represents an overall increase of €41 million over last year’s figures and is the first time my Department’s budget has increased since 2009. Expenditure so far this year is in line with profiles and it is expected that this will continue over the remaining quarter.

My overarching priority for 2015 has been to deliver the first part of the Government’s commitments to the farming and fishing sectors in the commencement of actions under the new rural development and seafood development programmes. These supports prioritise vulnerable sectors and support the incomes of family farms. Overall, I secured €439 million for investment in the rural development programme, up from €405 million in 2014. Schemes under the new rural development scheme, including the green low-carbon argi-environment scheme, GLAS, the beef data and genomics scheme, TAMS II and areas of natural constraint, ANC, are up and running, and I am pleased that, despite an additional two weeks allowed for application, €114 million of ANC payments issued to farmers last week.

Next month will see payments under agri-environment schemes begin to issue. This year €155 million worth of payments will issue to 17,000 rural environment protection scheme farmers, closing out that important scheme, 19,000 farmers under the agri-environment options scheme and to up to 26,000 farmers under the new GLAS. This scheme, when fully open, will support up to 50,000 farmers and require funding of €250 million. It will build on the success of these earlier programmes and encourage farmers to farm in an environmentally friendly manner.

The total allocation for the various on-farm schemes planned under TAMS II is €395 million over the course of the rural development programme. For 2015, I allocated €34 million of grants under TAMS, which represents a 100% increase on the 2014 budget. This provides for final payments on TAMS I, new schemes under TAMS II as well as a new farm safety scheme, which, unfortunately, we are reminded again today is extremely important. I recently extended the period for receipt of applications under TAMS I and the farm safety scheme by two weeks and I am pleased that this additional period of time allowed many farmers to submit applications for finished projects. Officials in my Department are working on those applications now with a view to processing payments for issue over the coming months.

In August I announced the opening of a new TAMS II scheme for pig and poultry investments and recently opened two more new TAMS II schemes. One is the animal welfare, safety and nutrient storage scheme and the second one is the low emission slurry spreading scheme, or LESS as it is known now. The benefits of the schemes range from the construction of new animal housing, the provision of nutrient storage facilities and the ever important safety elements to a more sustainably-friendly approach to the spreading of slurry, with knock-on benefits for Ireland’s ammonia and climate targets.

As members will know, 2014 was a year when tragedy struck too many Irish farm families. Conscious of the loss of life and injuries sustained on farms in recent years, particularly during 2014, I opened a farm safety scheme in October of last year. Following on from the demand from the farm safety scheme, which saw applications from over 6,000 farmers, I was pleased to be able to relaunch the safety component of this new scheme - the animal welfare, safety and nutrient storage scheme. This will give all farmers an opportunity to assess what can be done on their farms to improve safety and save lives, we hope, on family farms. I am determined to do everything possible to reduce the tragic accidents that we have seen on farms, particularly in the past 18 months or so. Unfortunately, I think, the figure so far this year is 14.

There is a family grieving as we speak.

As the beef industry experienced a very difficult year in 2014 I was conscious of the need to give particular priority to providing the level of support that can contribute to restoring confidence in the sector. I was pleased that we were in a position to fund support measures worth in excess of €83 million. The cornerstone of this support package is a significant increase in the funding allocated to the new beef data and genomics programme from €23 million to €52 million. This 126% increase will place Ireland at the international forefront of genetic improvement in beef and will make an important contribution to improving the carbon efficiency of Irish production. Payments under this scheme will issue to participating farmers later this this year. There are just under 30,000 farmers in that scheme.

I also prioritised innovation as part of the smart agenda through a substantial fund for research and development and training amounting to €28 million under FIRM, Stimulus and forestry funds and Teagasc training courses. The new call for research proposals will shortly issue.

The allocation of almost €147 million for Ireland under the new European maritime and fisheries fund is significant for the sector. In aggregate terms this represents a doubling of Ireland's allocation of EU funds relative to our allocations under the former European fisheries and EU financial instruments for sea fisheries control and data collection.

The Department has prepared a new operational programme in consultation with the industry which has been submitted for approval by the European Commission. The new and substantially improved allocation of funds, combined with more than €90 million of national co-funding, will enable me to launch new schemes under the seafood development programme aimed at driving investment in fisheries and seafood development to 2020 and securing the future of the marine sector.

Taking account of the fact that the Irish bloodstock industry is of enormous economic benefit to this country - we saw that in terms of sales yesterday - I increased State support for the horse and greyhound industry by €14 million to €68 million last year. It has been estimated that the industry provides in excess of 14,000 jobs, approximately €1.1 billion in economic output and is responsible for exports worth in excess of €200 million. The increase in State support for both industries is a recognition of a significant shortfall in funding going into the horse and greyhound sectors in recent years as a result of a downturn in the economy.

Budget 2015 saw a suite of taxation measures designed to support modernisation, restructuring and the promotion of growth and expansion. The tax package which was worth about €300 million to the farming community, was largely negotiated and put in place by the person on my left, who did a fantastic job on it with the Department of Finance. Overall, 2015 has been a challenging year. We have had to develop and launch the new basic payment scheme which will see some €1.2 billion of funding issued to Irish farmers, 70% of this will be issued in mid-October, recognising the difficulties farmers are currently experiencing. Many countries in the European Union cannot make those advance payments because they do not have the systems in place to do that on time. It is a recognition of how robust our systems are that with a few weeks notice a decision can be made for 70% advance payment and we can make it happen. I hope we will deliver that on time with the full amount of money involved.

We have also had to develop and open new schemes under the rural development programme. Opportunities following the abolition of quotas were undermined by the downturn in world demand for dairy and the Russian trade embargo and have required a swift EU response to put in place supports. I remain confident in the future for dairy in Ireland in the medium to long term. We are already seeing signals that the market is starting to turn.

The Government remains committed to agriculture and the marine sectors. I am determined through the Department's initiatives, schemes and programmes to continue to support and develop these important pillars of Irish society and of the Irish economy.

Photo of Andrew DoyleAndrew Doyle (Wicklow, Fine Gael)
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I thank the Minister. I invite spokespersons to make a brief comment and to limit their questions to three. I will try to get around to members a second time if possible. I call Deputy Éamon Ó Cuív.

Photo of Éamon Ó CuívÉamon Ó Cuív (Galway West, Fianna Fail)
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I have an awful lot of questions.

Photo of Andrew DoyleAndrew Doyle (Wicklow, Fine Gael)
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Perhaps the Deputy would limit them and give everyone a chance.

Photo of Éamon Ó CuívÉamon Ó Cuív (Galway West, Fianna Fail)
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I hate when someone comes into such a crucial meeting, so late in the day, and we are suddenly told we have three quarters of an hour to discuss a budget.

Photo of Andrew DoyleAndrew Doyle (Wicklow, Fine Gael)
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That is out of my control.

Photo of Éamon Ó CuívÉamon Ó Cuív (Galway West, Fianna Fail)
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We could, maybe-----

Photo of Andrew DoyleAndrew Doyle (Wicklow, Fine Gael)
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I know.

Photo of Éamon Ó CuívÉamon Ó Cuív (Galway West, Fianna Fail)
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We could suggest that we debate it for first three quarters of an hour today and come back and finish it. Is there any time limit on this?

Photo of Andrew DoyleAndrew Doyle (Wicklow, Fine Gael)
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Is there a time limit?

Photo of Éamon Ó CuívÉamon Ó Cuív (Galway West, Fianna Fail)
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Does it have to be done by a certain date?

Photo of Andrew DoyleAndrew Doyle (Wicklow, Fine Gael)
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No. It usually has to be done before the budget.

Photo of Éamon Ó CuívÉamon Ó Cuív (Galway West, Fianna Fail)
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I know but that is allowed.

Chairman:Members can ask three questions. I will try to get around a second time and get answers. Depending on how far we get today and if the Minister can make himself available to come back in, I do not know if this can be done without the Minister's presence, possibly not-----

Photo of Simon CoveneySimon Coveney (Cork South Central, Fine Gael)
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We will look at it but it is a very busy time between now and the budget for us. That is the problem.

Photo of Andrew DoyleAndrew Doyle (Wicklow, Fine Gael)
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I understand that.

Photo of Éamon Ó CuívÉamon Ó Cuív (Galway West, Fianna Fail)
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We would have been available in June if the Minister came in.

Photo of Simon CoveneySimon Coveney (Cork South Central, Fine Gael)
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This was supposed to be a two-hour meeting. We have been unfortunate because of votes and other things.

Photo of Andrew DoyleAndrew Doyle (Wicklow, Fine Gael)
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We will continue. We have 45 minutes.

Photo of Éamon Ó CuívÉamon Ó Cuív (Galway West, Fianna Fail)
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My first question is as follows. The Minister said the value of Ireland's food and drink exports grew by 4% during 2014 and was €3.2 billion higher than 2009. Perhaps he would develop on that theme. Was that caused by volume or price increases? The second issue is germane to this debate. What policy decisions, particularly those in regard to expenditure, had most effect in increasing the value? If we knew that, we could then put more money towards those particular policies. The Minister mentioned a massive increase in dairying, 50% in volume. Will this be achieved by getting more milk from the same number of hectares or by people swapping land usage to dairying from other farming activities? Has any analysis been carried out by the Department on the possible impact of this on other sectors of the farming economy? The upside is obvious but the downside needs to be looked at if there is to be a massive shift of land usage. Given that 85% of rural development schemes are being paid out this year, will that affect the Estimates with 100% of the money on the RDP being paid between now and the end of the year? I have one other question. An interesting document was published yesterday, Building on Recovery: Infrastructure and Capital Investment 2016-2021. It provides, in a table on page 21, the agriculture, food and the marine Exchequer capital envelope 2016-2021, €198 million; 2016 - €217 million; 2017 - €208 million; 2018 - €208 million, 2019 - €208 million; 2020 - €208 million; and 2021 - €208 million.

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

Photo of Éamon Ó CuívÉamon Ó Cuív (Galway West, Fianna Fail)
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Presumably when the Minister was drawing up that programme and getting approval from the Department of Public Expenditure and Reform he had to give a detailed breakdown of what is involved in that. Presumably there is quite an amount of detail. For example, the names of piers have been mentioned down to that kind of micro detail. Can the Minister give us a copy of the micro detail since those figures, obviously, do not hang in the air?

Photo of Simon CoveneySimon Coveney (Cork South Central, Fine Gael)
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I can give the Deputy a very detailed explanation for those figures.

Photo of Éamon Ó CuívÉamon Ó Cuív (Galway West, Fianna Fail)
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Will the Minister send on that information rather than go into detail on it now?

Photo of Simon CoveneySimon Coveney (Cork South Central, Fine Gael)
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Let me give a verbal response first and then the Deputy will understand.

Photo of Andrew DoyleAndrew Doyle (Wicklow, Fine Gael)
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I will come back to the Minister. Is Deputy Ó Cuív finished?

Photo of Éamon Ó CuívÉamon Ó Cuív (Galway West, Fianna Fail)
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They were my three questions.

Photo of Andrew DoyleAndrew Doyle (Wicklow, Fine Gael)
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I will come back to Deputy Ó Cuív. Senator Comiskey is the only other member who has indicated.

Photo of Michael ComiskeyMichael Comiskey (Fine Gael)
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I thank the Minister for his presentation. How many people are participating in GLAS this year? Does the Minister expect that payments will be made under the GLAS scheme by the end of the year?

We discussed beef genomics earlier. I welcome the fact that approximately 30,000 farmers are in that scheme. The only downturn I see from my discussions with farmers is that when they have made all the payments for testing and so on, the size of the payment they receives is quite small, it is €60 to €70. Is there a possibility of increasing that figure to €100 or €150?

Photo of Willie PenroseWillie Penrose (Longford-Westmeath, Labour)
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I thank the Minister for his presentation. Without agriculture and the agri-industry, rural areas would be decimated because IDA Ireland and other bodies have washed their hands of rural areas. We must continue to invest. It is far more productive when spending penetrates down into rural communities, helping to retain rural businesses.

In respect of GLAS and AEOS will the €250 million be allocated in 2016 to ensure payment in full to all GLAS and AEOS participants? The TAMS has been a success with €34 million disbursed last year. Does he anticipate that sum will be increased in the budget? The Minister opened two new schemes and the payment is very important in that context.

In the area of knowledge transfer, I read somewhere about administrative and indemnity issues in relation to the operation of the scheme with Teagasc. Has that been sorted out? I anticipate that will be ironed out and the revenue issues will be sorted so that the Teagasc personnel are not put at a disadvantage.

I am unequivocal in my support for the beef data genomics programme. It is absolutely critical to the beef industry. Some time ago the Minister indicated that he would meet the farm organisations. Perhaps he and his officials would meet the farm organisation to iron out some teething problems. Clarification is required. One hears daily about people wanting to leave the scheme, but that is foolhardy and I urge them to reconsider and stay within the scheme. I see significant potential in that scheme. It is important that the Minister goes into a room with the farm organisations and clarifies matters for them.

The comprehensive review of agri-taxation issues is worth €300 million a year. This is very welcome. This is targeted to increase land mobility and restructuring. Farmers like many who are self employed are being treated inequitably in the taxation system, because a self employed person is entitled to a self employed income tax credit equivalent to that available to the PAYE sector. I ask the Minister to beseech his colleagues, the Minister for Finance to ensure that it is given to self employed and farmers in particular. It is very important to bring equity and equality within the taxation treatment of individuals. Farmers are no different and it would be very important to them, especially for farmers on low incomes.

There is the issue of income averaging in terms of those who derive an income from forestry. The income generation is up and down. That is extremely important. I urge that this be brought into play immediately.

Photo of Martin HeydonMartin Heydon (Kildare South, Fine Gael)
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I thank the Minister. I have a specific question regarding the beef data scheme. Prior to the commencement of the scheme there was a great deal of talk that the figure of 30,000 members who had been predicted to enter the scheme, would not be reached. What is the final cut-off point? Are the people who are in the scheme in it and is there a point of no return? Is there a sense that farmers are looking to withdraw from the scheme?

Photo of Mary Ann O'BrienMary Ann O'Brien (Independent)
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I welcome the Minister's comment on the bloodstock industry and on Goffs, which raised €23 million from the sale of amazing yearlings, all Irish bred. The China Racing Club paid the top price of €1.7 million for a yearling bred by a Cork man who started with nothing and now owns the Alexander Hotel, the Davenport and a farm in County Kildare. The horse has come to be broken here in Ireland. It is excellent that the people in China want that amazingly valuable animal to be broken-in in Ireland. That is a great success story and I thank the Minister for supporting the industry.

I really welcome the Origin Green programme by Bord Bia in which I participate. It must continue to be supported in a great way. We deal with the multiples in America, Europe and Scandinavia, - we are off to Norway next week - but they will not deal with us in the future unless we have a visionary sustainable programme for our little food company. That applies to everybody in the food business.

Photo of Simon CoveneySimon Coveney (Cork South Central, Fine Gael)
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It is not that little any more.

Photo of Mary Ann O'BrienMary Ann O'Brien (Independent)
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No, it is huge. I was at the first global economic forum when we set significant targets for the Pathways For Growth. It has been an amazing story. We are on a journey and one has to stay on it because one will not be part of the game unless one has a sustainable badge.

Photo of Andrew DoyleAndrew Doyle (Wicklow, Fine Gael)
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We have all the main questions. There is a general point on the output which is not directly related to budget but perhaps will be, cognisant of the ongoing climate change obligations, that is our output increase and current output to which land mitigation is factored in so that we do not face huge penalty or curtailment. The next point is particularly relevant in my area, which is that TB is still an ongoing issue. While the number of animals has decreased the incidence in herds is static at best, if not increasing. There is an issue with regard to dairy farmers, and I am not a dairy farmer, for income compensation which is quite low per animal and is limited to a limited number of animals.

I will ask the Minister to answer these questions before we go around again.

Photo of Simon CoveneySimon Coveney (Cork South Central, Fine Gael)
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I will start by responding to the questions put by Deputy Ó Cuív.

The export of Irish food, a trend that started about six years ago, has kept going. We have increased our exports to France by 21%; to the Netherlands by 43%; to Germany by 34%; to Belgium by 23%; to Sweden by 15%; to Denmark by 43%; and to Poland by 72%. One or two member states, Italy and Spain are down a bit in value. The growth in food export to the UK is up by 24% in value. One the things that is really adding to our numbers this year, despite the fact that dairy prices are down, and dairy is the most valuable export followed very tightly by beef, is the exchange rates. When sterling is as strong as it is against the euro, it makes Irish product very good value in terms of competitiveness. One will see many of our suppliers into UK retailers will be upping their numbers and having very strong years even though the price in sterling might not have changed hugely the exchange rate has changed and therefore Irish companies are much more competitive versus their counterparts either north of the Border or in the UK.

The market to Africa has grown by 46%, America is up 36%, Asia is up 122% driven by China. To be honest dairy exports to China have gone from roughly €60 million to nearly €400 million in that period, mainly around infant formula.

Even though China is buying much less powder this year, it is probably buying more volume from Ireland this year than last year because we have helped to insulate ourselves from the trade in basic powders by having much more infant formula from companies like Wyeth, Abbott, and Danone, and new commercial propositions like the partnership between Beingmate and Kerry Group, producing product for the Chinese market in Charleville. This is a direct dividend for a rural town like Charleville, producing a product for the Chinese market, a very high-end, valuable market, selling for about $45 a tin or such like. It is a good example of how a rural community can benefit from a growing market.

Some people think about China and they just think about the big companies. There is a reason we are seeing €120 million being spent on dairy-drying facilities in Mallow, while near Waterford Portwe are seeing nearly €200 million, in Charleville €50 million, and another €40 million in Mitchelstown. All of these rural economic drivers are built on the back of these markets. The direct question Deputy Ó Cuív asked was whether this was driven by value or volume. It is driven mainly by value. For example, seafood has increased in value export terms by almost 40% in the last four years.

Photo of Éamon Ó CuívÉamon Ó Cuív (Galway West, Fianna Fail)
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I did not say value. We know that if the Minister is saying it is €3.2 billion, that is money. I want to know what created the extra money, was it extra volume or increased prices?

Photo of Simon CoveneySimon Coveney (Cork South Central, Fine Gael)
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Both.

Photo of Éamon Ó CuívÉamon Ó Cuív (Galway West, Fianna Fail)
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Increased prices include, of course, currency exchanges over which we have no control. The Minister has not got the data there. He should come back with that analysis. Furthermore-----

Photo of Simon CoveneySimon Coveney (Cork South Central, Fine Gael)
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Let me answer the question and we will come back to Deputy Ó Cuív again.

Photo of Éamon Ó CuívÉamon Ó Cuív (Galway West, Fianna Fail)
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The question was which elements in the €1 billion the Minister is spending are the ones that created-----

Photo of Simon CoveneySimon Coveney (Cork South Central, Fine Gael)
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I am coming to that. I am trying to give complete answers, if that is all right. The answer is that both volume and value have contributed to the increase, but more value than volume.

Photo of Éamon Ó CuívÉamon Ó Cuív (Galway West, Fianna Fail)
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It is due to prices.

Photo of Simon CoveneySimon Coveney (Cork South Central, Fine Gael)
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No, it is not just price. When one sells infant powder rather than skimmed milk powder-----

Photo of Andrew DoyleAndrew Doyle (Wicklow, Fine Gael)
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Value is added.

Photo of Simon CoveneySimon Coveney (Cork South Central, Fine Gael)
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-----it is value one is increasing, not just price. There seems to be an attempt by Deputy Ó Cuív to dismiss this and say that world prices have gone up and that explains all the figures.

Photo of Éamon Ó CuívÉamon Ó Cuív (Galway West, Fianna Fail)
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If the Minister could give me how much is-----

Photo of Simon CoveneySimon Coveney (Cork South Central, Fine Gael)
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Premiumisation and value added is what we are talking about.

Photo of Éamon Ó CuívÉamon Ó Cuív (Galway West, Fianna Fail)
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-----because of product development, how much is because of currency fluctuations, how much is because of price and how much is because of volume, it would be very useful information.

Photo of Simon CoveneySimon Coveney (Cork South Central, Fine Gael)
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What I am saying is that the biggest driver around the increase in value of food and drinks exports in Ireland has been the premiumisation of product and value added; increased price, in some areas, although there have been decreases in prices in some areas as well; and dramatic increases in volumes. There have been dramatic increases in volume in whiskey, for example. Some 6 million cases of Irish whiskey are now sold. Four or five years ago that figure would probably have been 3 million. They plan to double volume again by 2020 and again by 2030.

It is a mixture across multiple sectors of more volume, more value, more premiumisation, and these factors are helped in some sectors by either currency exchange rates or increased commodity prices globally. We have had the downside of commodity prices too, particularly in the grain sector and obviously this year in terms of dairy. Our expenditure on R&D and innovation is very important In terms of getting a dividend from increased exports. The latest call we had, which was €28 million around research projects, is driving a reputation in Ireland now for innovation in the food and drink sector, which is helpful. That is one of the reasons Kerry Group will open its global food innovation centre tomorrow. When that is fully up and running, it will have 900 people, mostly postgrads, designing the foods of the future, adding value to raw material in Ireland. That is what is driving growth. The supports we spend on Irish family farms to keep them in business through good times and bad are also critical. If we do not have the raw material coming from family farms and if they are not making money out of producing that raw material, then we cannot have the basis for the export growth and value added that we talk about.

In terms of the rural development programme advance payments, there is no issue with direct payments. In regard to advance payments-----

Photo of Éamon Ó CuívÉamon Ó Cuív (Galway West, Fianna Fail)
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I asked a question before that. I asked whether the expansion in dairy was due to extra production per hectare or people changing from one enterprise to another and, if it is the second, what effect that will have on the other industries.

Photo of Simon CoveneySimon Coveney (Cork South Central, Fine Gael)
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First, it has not happened yet, so we cannot give definitive answers on that but I anticipate that the current herd number will be able to produce between 15% and 17% more milk. That is the estimate we have. In other words, we can improve the yield per cow significantly. Many NGOs, in particular, that talk about concerns around emissions and climate change miss this point. The Irish dairy herd can produce much more milk and reduce the emissions intensity of that milk production because the same cow of the same age will be producing more milk by better grazing management, better feed conversion efficiency and so on. We are putting a great deal of research into that.

There will undoubtedly also be an increase in the herd size between now and 2020. We think this will be about an extra 300,000 animals. Correct me if I am wrong, but I think those are the figures. Obviously some more land will be needed for that, but there is a great deal of land in Ireland that is under-utilised in terms of stocking rate and with improved efficiency and better grazing management, many dairy farmers will be able to expand their output without requiring a lot more land. Certainly there will be more competition for land among dairy farmers. That is true. We are not predicting a significant reduction, for example, in beef output as regards suckler beef on the back of that. What we will see now is a more focused look at how we use agricultural land more efficiently and more sustainably. In all of our counties there are good examples of farms that could be more efficient and getting more young farmers into farming will help on that journey in terms of applying a more science-based approach to production.

There will be an increased herd size. We have already seen that in terms of the calving numbers this year, which are strong, and we have seen about a 12% increase in output of milk. We have probably had the best grass growth this year that we have ever had. If one speaks to the co-ops, as we did yesterday, at the moment dairy farmers are getting very strong bonuses in terms of quality in milk components, which is helping with the difficulty as regards base price.

There will be advance payments on GLAS and organics. What we had planned was €20 million on GLAS and €10 million on organics. We are now trying to plan €22 million on GLAS and €11.5 million on organics, which would be an 85% advance payment rather than a 75% advance payment. We should, I hope, be able to factor that into our Estimates for this year.

Photo of Éamon Ó CuívÉamon Ó Cuív (Galway West, Fianna Fail)
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The areas of natural constraint scheme is neutral on a full-year basis because the Department has tied the balance up before Christmas. Is that correct?

Photo of Simon CoveneySimon Coveney (Cork South Central, Fine Gael)
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Yes, that is what we are trying to do.

Photo of Éamon Ó CuívÉamon Ó Cuív (Galway West, Fianna Fail)
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It is a cashflow issue.

Photo of Simon CoveneySimon Coveney (Cork South Central, Fine Gael)
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Yes. There will be some spillover on GLAS payments from this year into next year, but that is the norm. The priority for farming organisations and farmers is always to get the maximum number of people in. If we have to split it between December and January to span two accounting years as regards Estimates, then we try to manage that as best we can.

On the capital programme, I am glad to have an opportunity to explain the approach the Department of Agriculture, Food and the Marine is taking, because it is different to most other Departments. We have an agreed capital figure for 2016, which is €217 million. That is enough for us to do all the things that we are promising to do for next year. We then attempted to put numbers in terms of capital expenditure, linked to forestry; to the rural development programme, mainly TAMS; and to the capital expenditure we will need, for example, in fishery harbours and so on. We tried to put that profiling right up until 2021, but it was proving almost impossible to do that and get agreement on it because many of these schemes are demand-led.

Farmers approved for TAMS have two years to spend the money and they decide when they spend it. It is not like building roads, where the State can plan for expenditure depending on how much money it has. Essentially, we have agreed a baseline figure through to 2020. Incidentally, 2021 will be a new Common Agricultural Policy year so who knows what money will be available then.

We have agreed a baseline figure of €208 million, which is a significant increase on what was spent up to this year, and we have agreed with the Department of Public Expenditure and Reform that we will add to that baseline figure annually taking account of what is likely to be spent year on year, which will be significantly more than €208 million in most years between now and 2020, to accommodate the commitments under the rural development programme, the forestry programme, the seafood development programme and so forth. For the first time in a Government-published document there is a full commitment from the Government to plan and estimate for the full delivery of the rural development programme by 2020. I am very happy with the outcome there. We have agreed the figure to be spent next year and a baseline figure after that, with very strong wording that states those figures will be topped up to accommodate the expenditure profile of the RDP as it rolls out. I hope that gives the Deputy an explanation of the numbers.

Photo of Éamon Ó CuívÉamon Ó Cuív (Galway West, Fianna Fail)
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I have a quick supplementary question.

Photo of Andrew DoyleAndrew Doyle (Wicklow, Fine Gael)
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Deputy, we want to get around the points.

Photo of Éamon Ó CuívÉamon Ó Cuív (Galway West, Fianna Fail)
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I accept the Minister's point about the European schemes. However, marine capital expenditure is the same as roads expenditure in that the Minister controls it.

Photo of Simon CoveneySimon Coveney (Cork South Central, Fine Gael)
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Yes, for the harbours, but not for the seafood development programme.

Photo of Éamon Ó CuívÉamon Ó Cuív (Galway West, Fianna Fail)
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Yes. Can the Minister give details of what he has allocated for the projects that are proceeding?

Photo of Simon CoveneySimon Coveney (Cork South Central, Fine Gael)
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There are two priority projects on which we hope to make major progress in the next five years. One is in Castletownbere, where we have committed to spending approximately €20 million on extending the Dinish pier to accommodate a significant increase in both foreign landings and activity generally. The second will be in Rossaveal, where we are considering an investment project over the lifetime of the capital programme. We will announce details of that when we have them.

Photo of Andrew DoyleAndrew Doyle (Wicklow, Fine Gael)
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Can the Minister clarify one point? He said earlier that some of the areas are demand led, so what happens in the event of storms like those that occurred last year occurring again?

Photo of Simon CoveneySimon Coveney (Cork South Central, Fine Gael)
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If that happens, we will have to get a Supplementary Estimate if it is a major amount of money. That will have to come through in the same way as on the last occasion. When there were bad storms two or three years ago a €70 million fund was put together by the then Minister, former Deputy Phil Hogan, and that was spent through different Departments. Our Department spent approximately €13 million. I presume that would happen again if there were storm damage that required a response.

Incidentally, there will be ongoing maintenance and other projects in fishery harbours. In Dunmore East, for example, we are spending €7 million this year on a dredging project. There is also a project on Cape Clear. There will be other projects in fishery harbours. There will be a project in Killybegs. People in Greencastle are seeking money to be spent there, and that might also happen. Many projects have to be financed and we have factored that into our numbers. However, regarding the two big flagship projects to which we are making a commitment, we have already announced some details about Castletownbere and we will do something similar about Rossaveal in the not too distant future.

Photo of Éamon Ó CuívÉamon Ó Cuív (Galway West, Fianna Fail)
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Rossaveal has planning. Is the Minister going straight to tender now?

Photo of Simon CoveneySimon Coveney (Cork South Central, Fine Gael)
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No, we must look at the expenditure profile and when we can spend the money.

Photo of Éamon Ó CuívÉamon Ó Cuív (Galway West, Fianna Fail)
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Does the Minister envisage it in 2016 in celebration of Padraig Mac Piarais and Connemara?

Photo of Simon CoveneySimon Coveney (Cork South Central, Fine Gael)
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This project is very close to Deputy Seán Kyne's heart, so we are working hard to try to get it done.

Photo of Éamon Ó CuívÉamon Ó Cuív (Galway West, Fianna Fail)
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What does the Minister-----

Photo of Andrew DoyleAndrew Doyle (Wicklow, Fine Gael)
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In fairness, Deputy, we must move on.

Photo of Éamon Ó CuívÉamon Ó Cuív (Galway West, Fianna Fail)
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I cannot believe the Minister put a programme together and does not have an idea of whether it will be in 2016, 2017, 2018 or 2020. Does it come after Castletownbere? Where is it in the figure here? I am as entitled as the other Deputy to as much information.

Photo of Simon CoveneySimon Coveney (Cork South Central, Fine Gael)
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We have not published any detail on that yet. The capital plan was only agreed yesterday.

Photo of Éamon Ó CuívÉamon Ó Cuív (Galway West, Fianna Fail)
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Everybody on Radió na Gaeltachta can tell us but the Minister will not tell us.

Photo of Simon CoveneySimon Coveney (Cork South Central, Fine Gael)
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The capital plan was only agreed yesterday. We will launch the full details of the Rossaveal profile of expenditure.

Photo of Éamon Ó CuívÉamon Ó Cuív (Galway West, Fianna Fail)
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When?

Photo of Simon CoveneySimon Coveney (Cork South Central, Fine Gael)
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I cannot do it today.

Photo of Éamon Ó CuívÉamon Ó Cuív (Galway West, Fianna Fail)
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When? Next week?

Photo of Simon CoveneySimon Coveney (Cork South Central, Fine Gael)
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No. The profile of the spend will have to be agreed with the Department of Public Expenditure and Reform.

Photo of Andrew DoyleAndrew Doyle (Wicklow, Fine Gael)
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We will move on. Senator Comiskey had questions about GLAS and genomics.

Photo of Simon CoveneySimon Coveney (Cork South Central, Fine Gael)
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I will try to move through the questions more quickly. We will spend €20 million on GLAS this year. There will be 26,000 farmers in GLAS. We will open a second round of GLAS for applications starting, hopefully, in the week of 12 October. We will accept another 10,000 or so. They will start their membership of GLAS from 1 January next and they will be paid next year. There will be approximately 36,000 farmers in GLAS.

We are moving towards the 50,000 figure. Some people would like us to take in more than 10,000 this time but we must be responsible in scaling up GLAS. We cannot spend €250 million on GLAS next year. I would love to be able to do it, but we cannot. We never said we would be able to do that. We said we would accept as many farmers as we could from the first day and 26,000 was far more than most people were seeking when it was being designed. To have 36,000 in it by the end of the first year is not a bad performance. We will take in the other 15,000 as soon as we can afford to commit the full €0.25 billion a year that will be spent on GLAS. It will be done as soon as possible.

A number of members asked about beef genomics. We are setting up a working group and the farming organisations will be included in it. When the beef genomics scheme was launched there were concerns that it was too complicated and unworkable. To be honest, the Department should have done more in terms of information meetings at that point. We have tried to make up for that by holding those meetings in different parts of the country and we will do more of that. Many people have been reassured about beef genomics. I attended a number of public meetings and there was talk that there would be a mass exodus from the programme and that there would be no more than 5,000 farmers in it. There are almost 30,000 farmers in the programme. A small number of farmers decided to pull out for their own reasons, but the vast majority of people are staying in beef genomics and are now talking it up.

We have written to everybody in the scheme to give them a detailed outline of how it will work. The Irish Cattle Breeding Federation, ICBF, has given farmers information on qualification criteria, and 90% of the farmers in the scheme are already at a star rating in their herds that they are required to reach by 2018-19. They are at that point now. It is about bringing the other 10% up to that standard in the next few years by improving the information they have about breeding, linked to both performance data and the DNA of their herds. In time, the beef genomics scheme will be one of the most innovative schemes ever introduced as part of a rural development programme. Of course, there are challenges at the start to ensure that people understand what is required of them. The farming organisations have been involved in that. They are not shy about telling me when there are problems. There will be a mid-term review of the scheme at the end of next year and if there are problems and changes are required, we will make the changes. I have said that previously. We are trying to help farmers with this, not catch them out. I believe beef genomics will be a big success. We have tied up a large amount of money in it, so it must be.

Deputy Penrose asked many questions. I answered the question about GLAS and the €250 million. We will reach that as soon as possible, but it will not be next year. Expenditure on TAMS will be €34 million this year. Next year it will be much more. Expenditure on TAMS has proven remarkably difficult to estimate. There will be less spent this year than we were expecting.

We will need to reallocate some of that money to make sure we get the expenditure, and we need to carry over some of the money into next year because the TAMS bills will keep on coming. They do not respect calendar years.

On knowledge transfer schemes, some of the Teagasc advisers have a concern that there may be a tax liability with regard to the form of payment that is being proposed for them as individuals. We need to address that issue with the Revenue Commissioners. It is a question of making sure they are paid through the Teagasc infrastructure. When I read this story it was the first time I had come across it, but I will do my best to address it.

The working group on beef data will very much involve the farming organisations, who asked for that and will get it. On land mobility, one of the great successes that has been quietly happening in agriculture is the move away from conacre towards long-term leasing since we made the tax changes to encourage that over the past couple of years. The increase in the numbers of farmers in long-term leasing is significantly up, maybe by 27%, and we need to keep pushing it because for young farmers to get a piece of land for 11 months is a disaster on lots of levels, especially when it comes to borrowing money on the back of it and investing in the soil in a field if they do not know they are going to have it the following year. We need to get long-term leasing in place, and it is starting to work.

Self-employed tax credits are a matter for Deputy Michael Noonan. I am always supportive of farmers and try to help their income levels. We have a very able team of people negotiating with the Department of Finance, and they got a great result last year. The conversation is continuing this year so we will hopefully get a good result in a few weeks' time.

There is no commitment from the Department of Finance on income averaging in forestry. I would like it to consider this, and it was very much part of discussions between our Department and the Department of Finance last year in the build-up to the budget, as it has continued to be. If there is no income averaging for people in forestry, they will cut a certain amount of trees up until the threshold where taxation kicks in.

Photo of Willie PenroseWillie Penrose (Longford-Westmeath, Labour)
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That is right.

Photo of Simon CoveneySimon Coveney (Cork South Central, Fine Gael)
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They will harvest maybe 70 acres of trees but leave the rest of the plantation, so that we have piecemeal harvesting of trees as opposed to being able to clean out 200 or 300 acres, if it makes sense to do that in one year, and averaging the income over four or five years to take into account the taxation treatment. There is real frustration in the forestry sector on this issue. To be fair to the Department of Finance, it has been unbelievably accommodating on issues we have raised with them, the proof of that being in the past number of years. There are issues relating to this particular request, but we will keep working with the Department of Finance until the budget. I do not, however, want to over-promise on this, as I am not sure it is going to be agreed.

Photo of Éamon Ó CuívÉamon Ó Cuív (Galway West, Fianna Fail)
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The big downside of this is that mills have to import from outside the island in order to keep going just for tax reasons. There are a massive number of jobs in really rural areas in the mills, so it is not just affecting the guy who sells the trees. There is a knock-on effect on the viability of some of our very large and successful timber mills, which have survived the downturn intact, amazingly, so I am a bit surprised that the wise heads in the Department of Finance cannot recognise that they are losing the PAYE tax and PRSI from mill workers.

Photo of Simon CoveneySimon Coveney (Cork South Central, Fine Gael)
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I am convinced by the arguments and we will continue to try to make the case. Deputy Heydon asked about the beef scheme. The irony of the beef genomics scheme is that a lot of farmers who decided, for whatever reason, that they did not want to get into it now want to get into it. If we are not spending the full amount that we anticipated we would spend - and we may be slightly under that this year - we will, of course, look to let more people in, but the rural development programme only has a set amount for the beef genomics scheme and we cannot spend more than that. There are issues around young farmers who are starting out and who may want to come into the beef genomics scheme late, having not been in farming at the start of the scheme. We need to prioritise them, but we will keep it under review with the working group and we will see how we can make sure we spend the full allocation. If that means letting more people in late, we can look at that, though it is not that easy to do, as one signs up for a certain number of years. If everybody in the scheme has signed up for five years and we take people in late there are knock-on problems because the scheme then goes beyond the lifetime of the current scheme into the next rural development programme into the 2020s. Late applicants are a headache for the purposes of managing the scheme, but we will look at making exceptions and showing flexibility where we are allowed to do so by the Commission.

I congratulate Senator O'Brien on the growth of her own company. I see her products all over the world when I travel.

Photo of Mary Ann O'BrienMary Ann O'Brien (Independent)
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Thank you so much.

Photo of Martin HeydonMartin Heydon (Kildare South, Fine Gael)
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Does the Minister see or sample?

Photo of Simon CoveneySimon Coveney (Cork South Central, Fine Gael)
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I sample. One can get them even on planes now. The product plays a great role as an ambassador for the Irish food industry.

Photo of Mary Ann O'BrienMary Ann O'Brien (Independent)
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Yes, but I was in PricewaterhouseCoopers yesterday talking to companies making €10 million which were trying to get to €20 million. I am a very simple person with a great team, but I worked with Enterprise Ireland and Bord Bia over the years and they drove me crazy with business plans and lean manufacturing ideas. We went through a lot to become the company we are.

Photo of Simon CoveneySimon Coveney (Cork South Central, Fine Gael)
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The more companies there are such as the Senator's, the more a light is shone for others to follow. Other people say: "That could be me if I put the right plan in place." Four and a half years ago, Bord Bia had 350 companies on its books, but it is now helping approximately 750. That is an indication of what is happening in the small foods sector. Some of them are not small any more but are very much medium-sized companies with big growth plans. We have not seen too many Irish food companies go from medium to big in the past ten years, even in this growth period. There are glass ceilings that are very difficult to break through in terms of funding and the ability to put infrastructure in place to become the next Glanbia, Kerry Group or Greencore. We have to help companies make that jump.

The Senator's comments on the racing industry are welcome. The sales yesterday are an indication that spending money in this sector pays dividends, and we have managed to keep it going through a very difficult economic period.

I am a very big supporter of Origin Green, and I hope that by the end of next year, all Irish food and drinks companies will either be signed up to Origin Green or already in the programme. In this way, our €11 billion or €12 billion of exports will all be under an Origin Green banner, which represents a commitment to continuous improvement around stability and measuring, internationally and independently certified for credibility.

One of the areas in which this committee could do a lot more work with our Department is climate change. I am hugely frustrated by commentary we sometimes get across mainstream media platforms about agriculture being the big problem, which neglects to mention that Ireland is probably doing more in terms of climate change in agriculture than any other country in the world right now. Some 46,000 beef farms in Ireland are currently measuring carbon footprints in their herds with a carbon calculator. No other country in the world is even talking about that but we are doing it. All 17,000 of our dairy farmers have signed up, through their farming organisations, to a dairy sustainability scheme, for which they are not being paid. Virtually all of our food companies are either in Origin Green or have signed up to Origin Green. We are focusing on output and adding value but also on a sustainability journey that is measured and benchmarked as we go. It would be great if the committee focused on some of that to raise awareness of it, perhaps by bringing in some NGOs to talk about it.

The idea that Ireland needs to reduce its carbon footprint by simply producing less does not make sense from either a climate change or an economic perspective. On disease, we had a big step forward in relation to brucellosis recently when Northern Ireland achieved brucellosis-free status the week before the ploughing championships. We have managed now to do away with pre-movement testing of animals, which is great news for farmers North and South of the Border on a practical level. I acknowledge that there is a particular TB problem in Wicklow, which we think is linked to deer or badgers. The herd has a TB incidence of 4.92%, which is down from a high of 15.72% in 2010, but there is still an issue in Wicklow, which we need to keep working on. There has been huge progress in the number of reactors per thousand animals tested, which is now down to 5.19 from 8.85 in 2014. That is in Wicklow east. While there is a problem, there has also been a significant improvement in the numbers there. I think I have answered everything.

Photo of Andrew DoyleAndrew Doyle (Wicklow, Fine Gael)
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I have a comment on land leasing which occurs to me and which I may have mentioned already to the Minister. Some of those involved with the farm managers and Macra na Feirme approached me at the National Ploughing Championship and said that while the €40,000 upper limit is very good and helpful, there is an issue whereby young farmers are getting a 25% top-up as more of the money is being extracted in the lease. It was suggested that a maximum per acre should be applied as a control. In other words, one would get up to €40,000 tax-free for a long-term lease, but, taking a figure of €200 per acre, the rest is taxable. I imagine if that could be implemented, the Revenue Commissioners would love it. I am not sure it can be. However, it puts a brake on the price increase, especially as it applies to young farmers who landowners will know are in receipt of top-up payments. It is the opposite of what we usually look for. We are looking for a control measure here to aid young farmers. It is something that should be discussed with Macra and farm managers in particular. That is who mentioned it to me at the ploughing championship.

Photo of Simon CoveneySimon Coveney (Cork South Central, Fine Gael)
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Macra na Feirme, the IFA and other farming organisations have done a great deal of work in this area and on land mobility issues generally, particularly Macra. Macra has taken on somebody whose full-time job is to talk to farmers about land mobility and to put arrangements in place. They asked me at the ploughing championships whether, over a certain amount per acre of spend, one would not provide a tax break in order to keep prices down a bit. One is kind of moving into the territory of price fixing in that case, which sometimes has knock-on consequences in terms of the availability of land. The most important thing here is that as much land is available for lease as possible. We do not want any disincentive to landowners in respect of making land available for lease. If we start to control prices and change the incentive, thereby reducing the amount of land available, we will be in a dangerous circle of having less land, thereby driving the price up even more, and trying to force it down through tax measures. We will look at it, but that proposal is a double-edged sword.

Photo of Éamon Ó CuívÉamon Ó Cuív (Galway West, Fianna Fail)
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What the Minister could do is say the tax relief is only on X amount per hectare. A person can pay what he or she wants; it does not control the market. Say, for example, the person letting the land could only claim a tax relief. If one buys private health insurance, which takes pressure off the public system, one can only get X amount of tax relief. After that, if one wants to increase one's policy, one is on one's own. There is nothing to say that somebody cannot pay €400 per hectare with the tax relief incentive on the first €200, and one is on one's own after that. Otherwise, it is a major incentive and a bonus to the person who is getting big money per hectare. It encourages inflation in the market. It is worth looking at. The Chairman has raised a valid issue.

Photo of Simon CoveneySimon Coveney (Cork South Central, Fine Gael)
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We will look at it.

Photo of Andrew DoyleAndrew Doyle (Wicklow, Fine Gael)
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It applies to smaller holdings. If one has 200 acres and gets €200 tax free, that is fine for a long-term lease. If one gets €300 per acre, one is getting a lot more and one only gets the €40,000. Smaller acreage is particularly where it applies. It is often a very big addition to a young farmer's enterprise where he or she is actually able to add perhaps 50 acres. If he or she has to pay €400 an acre, which is the price that was quoted to me - whereas the farmer is well within the limits - he or she would still be well within the limits.

Photo of Éamon Ó CuívÉamon Ó Cuív (Galway West, Fianna Fail)
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It is very dangerous that adjacent acres-----

Photo of Andrew DoyleAndrew Doyle (Wicklow, Fine Gael)
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The health insurance analogy is very relevant.

Photo of Éamon Ó CuívÉamon Ó Cuív (Galway West, Fianna Fail)
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I understand the Minister arrived at a conclusion on the LPIS issue and that the figure was €67 million. How will that impinge on the Department's Estimates? Where does the money come from?

Photo of Simon CoveneySimon Coveney (Cork South Central, Fine Gael)
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That is a negotiation between ourselves and the Department of Public Expenditure and Reform.

Photo of Éamon Ó CuívÉamon Ó Cuív (Galway West, Fianna Fail)
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Will it come out of the Department's Estimate?

Photo of Simon CoveneySimon Coveney (Cork South Central, Fine Gael)
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That is an ongoing negotiation. My intention where possible is to ensure that it does not impinge on any other spending programme that we have an Estimate for and that this would be treated separately. We are negotiating with the Department of Public Expenditure and Reform to look at how that is paid and whether farmers contribute or the State picks up some or all of that burden. We will certainly have a decision on it before the end of the year.

Photo of Éamon Ó CuívÉamon Ó Cuív (Galway West, Fianna Fail)
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Will it be this year's Estimate or next year's?

Photo of Simon CoveneySimon Coveney (Cork South Central, Fine Gael)
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We may need a Supplementary Estimate if we have to spend money on it this year. It is something we need to finalise with the Department of Public Expenditure and Reform.

Photo of Éamon Ó CuívÉamon Ó Cuív (Galway West, Fianna Fail)
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Is there a chance of getting a Supplementary Estimate this year?

Photo of Simon CoveneySimon Coveney (Cork South Central, Fine Gael)
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There is.

Photo of Éamon Ó CuívÉamon Ó Cuív (Galway West, Fianna Fail)
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Will that get the whole thing cleared?

Photo of Simon CoveneySimon Coveney (Cork South Central, Fine Gael)
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Well-----

Photo of Éamon Ó CuívÉamon Ó Cuív (Galway West, Fianna Fail)
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The Department of Public Expenditure and Reform has got a lot more money in.

Photo of Simon CoveneySimon Coveney (Cork South Central, Fine Gael)
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It may sound like the obvious thing to do, but there are issues.

Photo of Éamon Ó CuívÉamon Ó Cuív (Galway West, Fianna Fail)
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Normally the Departments of Finance and Public Expenditure and Reform want to depress on a very good year how much ahead-----

Photo of Simon CoveneySimon Coveney (Cork South Central, Fine Gael)
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We will do everything we can to have as farmer-friendly a solution to this issue as possible.

Photo of Andrew DoyleAndrew Doyle (Wicklow, Fine Gael)
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I thank the members, the Minister and the officials for this engagement. I hope the Minister appreciates from the earlier part of the meeting that the committee wants to be proactive on targets and outcomes.

The joint committee adjourned at 1.10 p.m. until 2 p.m on Tuesday, 6 October 2015.