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

On 15 December 2016, the Dáil ordered that the following Revised Estimate be referred to this committee for consideration: Vote 30 - Agriculture, Food and the Marine. The purpose of today's meeting is to consider the Revised Estimate and report back to the Dáil.

I welcome the Minister for Agriculture, Food and the Marine, Deputy Michael Creed, and his officials here today. I thank the officials for providing the briefing to members of the committee. The proposed format of today's meeting will deal with Vote 30 programme by programme. At the outset the Minister will make an opening statement. There are four programmes and we will consider each programme separately, with questions from the members of the committee.

I remind members to ensure their mobile phones are switched off as they interfere with the broadcasting services. 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 or an entity either by name or in such a way as to make him, her or it identifiable.

Members have been circulated in advance with a briefing from the Department on the various programmes. We will now proceed. I call the Minister to make his opening statement.

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I am very pleased to accept the invitation to meet with the committee. This is a valuable opportunity to review how we are progressing with the current challenges and opportunities presented across the various sectors in agriculture, food development, marine and forestry.

Budget 2017 demonstrated the Government’s firm commitment to the agrifood and marine sectors, recognising the challenges faced by rural communities and the ongoing challenge of Brexit. In 2017, the Exchequer contribution to the Vote of my Department will amount to €1.468 billion. This is €1.23 billion in current expenditure and €260 million capital expenditure when a €22 million capital carry-over is taken into account. This represents an overall increase of almost €120 million over last year and recognises the role the agrifood sector continues to play in our economic recovery. The agrifood sector has performed strongly in recent years with Bord Bia estimating that exports reached an estimated €11.15 billion in 2016. This represents a new high for exports and market growth of over 50% since 2009. In addition to the funding received through the Department Vote, in 2017 Ireland will receive some €1.2 billion in direct funding from the EU for the basic payment scheme.

My key focus for 2017 is on maintaining farm payments and protecting vulnerable farm incomes against market volatility, supporting sustainable investment and jobs in rural and coastal communities and strengthening the sector to meet the challenges of Brexit. I have prioritised the ongoing implementation of the rural development programme and the seafood development programme, and fulfilled the commitments in A Programme for a Partnership Government in relation to sheep welfare. I have also continued to provide support to forestry, horticulture, the various State agencies under my remit and the horse and greyhound racing fund.

The UK’s decision to leave the European Union undoubtedly presents an enormous challenge for the Irish agrifood sector. The UK is by far our largest trading partner. In 2016, we exported €4.8 billion worth of agricultural products. Ireland is also the UK’s largest destination for its food exports, which were worth €3.7 billion in 2016.

I and my Department have been actively engaged in assessing the impact of the referendum vote on the Irish agrifood sector, consulting appropriate stakeholders and engaging with relevant politicians and institutions. This work is being done in conjunction with the overall Government response co-ordinated by the Department of the Taoiseach. In response to the challenges posed, I have undertaken a number of important steps within my Department, which include the establishment of a Brexit response committee and a dedicated Brexit unit. I have also created a stakeholder consultative committee which is complemented by frequent and ongoing contact with representative organisations and companies. I also hosted three meetings under the all-island civic dialogue process. All these opportunities for consultation allow me and my Department to establish the issues of critical concern to industry stakeholders.

The impact of Brexit on the food industry has initially been in terms of currency volatility and uncertainty, presenting challenges to maintaining hard-won markets and a need to intensify the process in recent years of diversifying into new and emerging markets which offer good potential for growth. In line with their market intelligence and promotion mission, Bord Bia has responded quickly, engaging with companies and developing a four pillar strategy to provide food and drink companies with market information, advice and practical supports. The four pillars are managing volatility, obtaining consumer and market insight, deepening consumer engagement, and extending market reach. The additional €2 million being provided in 2017, which builds on increased funding in recent years, will enable Bord Bia to undertake a number of activities in 2017. These activities include an export marketing strategy programme to help individual companies to maintain and grow their position in the UK and diversify their market reach, research to identify priority market opportunities, participation in three new trade fairs in Asia, and increased presence at key food shows such as Gulfood, where space will be doubled, and Anuga in Germany.

The activities planned build on the supplementary market and business support programmes which were developed by Bord Bia following the United Kingdom referendum and for which additional funding of €1.6 million was made available to Bord Bia in 2016. Bord Bia is also planning to almost double its drawdown of EU promotion funds to €1.9 million, mainly for activities focused on China.

Skills are an important element in delivering market related research and services. In 2016, sanction was given to Bord Bia to recruit 20 additional staff. The recruitment programme is well advanced, with just four positions to be filled in 2017.

I am engaged in a series of bilateral meetings with my European Union counterparts which are aimed at building alliances to ensure agrifood and fisheries issues are at the top of the EU negotiation agenda. I want to discuss and gauge the importance of Brexit to these member states and assess the degree to which they could support Ireland’s efforts to have these issues specifically and adequately taken into account in the negotiations.

I have just returned from a series of such bilateral meetings in Germany, Netherlands and Denmark and I will be having meetings in Estonia and Poland at the end of the month. I have plans to meet other European Union Ministers next month. I am also in regular communication with the Commissioner Phil Hogan and my officials have taken part in meetings with the Commission and the Barnier task force.

I am also very committed to continuing a very strong focus on trade promotion in 2017. I have participated on trade missions to the Gulf states this year which has enhanced and improved our existing levels of market access, and I am also considering a range of other destinations for the remainder of 2017.

Last October, I announced a ground-breaking measure for the agrifood industry in the form of a cashflow support loan fund. Developed in conjunction with the Strategic Banking Corporation of Ireland, SBCI, by leveraging EU and Exchequer funding totalling €25 million to deliver a total loan fund of €150 million, it was designed to support highly flexible loans for up to six years for amounts up to €150,000. The interest rate applying is 2.95% and the product, which became available in January, was made available to livestock, tillage and horticulture farmers. This innovative loan scheme provides farmers with a low cost, flexible source of working capital and allows them to pay down more expensive forms of short-term debt, such as merchant credit or overdrafts, contributing to the ongoing financial sustainability of their farming enterprises.

The scheme is administered through AIB, Bank of Ireland and Ulster Bank and they will report on progress to the Strategic Banking Corporation of Ireland, SBCI on a regular basis, although no official returns have been received by my Department as yet. However all of the banks have confirmed that they have applications up to the amounts available under the scheme. There may be some residual availability but this will only emerge as applications are processed and loans drawn down.

I am very pleased at the very positive reaction by farmers to the scheme, which has proved that significant demand exists for low cost flexible finance. I hope that the commercial banks will respond positively to this demand by reducing interest rates and providing more flexible terms for cashflow loans in the future. I plan to meet the chief executives of the banks shortly to discuss this and other issues relating access to finance in the agrifood sector.

A key priority for 2017 is to prioritise the ongoing implementation of the rural development programme and the seafood development programme and to fulfil programme for partnership Government commitments. I have also continued to provide support to forestry, horticulture, the various State agencies under my remit and the Horse and Greyhound Fund.

The €4 billion rural development programme provides vitally important stimulus in the Irish rural economy. In 2017 rural development funding will increase by more than 21% from €494 million to more than €600 million.

In 2017, the agri-environmental scheme, GLAS, will benefit from additional funding. Applications under the first two tranches of the GLAS scheme resulted in almost 38,000 farmers being approved into the scheme in its first year of implementation. Furthermore, just under 14,000 applications were received for GLAS 3 which closed in mid-December last. Approvals have now issued in respect of over 90% of these applications, with the remaining applications currently being examined by the Department with a view to issuing further approvals where appropriate. This will bring the overall participation levels in GLAS to well over the targeted participation level of 50,000 farmers.

The 2016 payments represent the first full year of payment under GLAS. At the end of December 2016, there were approximately 37,500 active participants in the GLAS scheme, of which over 86% have now received payments valued at over €112.9 million. Further payments are issuing on a weekly basis where all the required validation checks have been successfully passed.

The sum of €52 million will be available for the beef data and genomics programme in 2017. I believe that this innovative scheme will accelerate the genetic improvement that will drive efficiency and increase profitability at farm level and enhance our reputation as a world leader in sustainable food production.

I have provided €50 million for the TAMS II scheme in 2017. There has been a significant level of interest in the six investment measures that had already opened under the TAMS scheme with more than 10,600 applications received to date. Approvals are issuing on an ongoing basis after the closure of each tranche. Approvals have now issued to over 6,400 applicants.

This month I opened a seventh measure focusing on tillage. Through the Tillage Stakeholder Forum I am aware of the issues facing the tillage sector including the effects of a poor harvest in 2016. This new TAMS II measure includes capital investment measures which will assist the sector in supporting the use of the most modern and efficient equipment and facilities to enable the tillage farmer to improve competitiveness. I would encourage all tillage farmers to examine the provisions of the scheme as I am confident that this new measure will provide a strong platform for investments on tillage holdings.

Some €25 million will also be available for payment to over 20,000 participants in the beef, dairy, equine, sheep, poultry and tillage knowledge transfer scheme. The implementation of the scheme builds on the knowledge and skills base of farmers in key areas and focuses on profitability and sustainability and also important issues such as farm safety and farm succession planning.

I have fulfilled the programme for partnership Government commitment with the introduction of a scheme for sheep farmers and a budget of some €25 million has been provided. The scheme provides support of €10 per ewe to farmers with breeding ewes flocks. Farmers are required to undertake two actions in each year of the scheme, with actions to be chosen from a menu of actions linked to lowland and hill type flocks.

The €241 million European maritime and fisheries fund operational programme, launched in January 2016, will be further rolled out in 2017 with an increased total budget of €43 million made available across my Department and its agencies. This investment will fund a range of programmes including capital investment in the seafood processing, aquaculture and fishing sectors to foster growth in production, value and employment, and to enhance sustainability and competitiveness.

I have also made €85 million in funding available for the food safety animal and plant health work performed by the Department. While we have seen some savings under this heading in recent years due to the reduced instance of disease it is important to remain vigilant and defend out health status and keep our food standards at the very leading edge.

This is a very brief overview of the range of measures that apply in the agrifood and marine sectors for 2017 and I look forward to the discussion and questions from committee members.

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

I will now proceed to take questions on programme A.

Jackie Cahill (Tipperary, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I have a number of questions arising from the Minister's opening statement.

The Minister spoke about the significant uptake for low cost loans. In my opinion the reason for the huge uptake in loans is that farmers' incomes in all sectors are under pressure. They saw the loan scheme as a safety valve to try to reduce their exposure to high cost loans. I am not ridiculing the scheme. It was a worthwhile scheme while it lasted. I remember tabling a question to the Minister at the end of January asking when the scheme would be up and running. The money only lasted three to four weeks. Many dairy farmers have contacted me to say that it came at a time when they had not time to focus on visits to the bank, and by the time they got around to make the call to the bank, the money had run out. Is it possible to run another scheme with similar funds because I am sure the demand is there for it? Second, loans under the scheme were to be for a six year term, however, the banks have shown a reluctance to give a term of that length to their customers. They have been trying to force their customer to take shorter term loans from this scheme. That is running counter to what was envisaged under the scheme. The scheme was to help farmers with their cashflow, to get rid of their merchant credit and to allow them put their affairs back in order during the six year period. The hope is that the product price would improve to help the balance of payments. There has been a reluctance by the banks to give people the low cost loans for that six year term. The Minister stated in his opening statement that he will meet with the chief executives of the banks. I would like him to drive home the points I have made because what they are doing is against the spirit of the scheme which was to allow farmers to make repayments over a longer period and do it at a low cost and keep their overdraft in place. I know of cases where banks have told individual farmers that the loan is for merchant credit and they will only give it to the farmer for a two year period. That defeats the spirit of the scheme. Additional money is needed for another scheme like that one. It is absolutely essential. The demand for this low cost loan scheme shows the pressure that farmers are under. The banks were trying to tailor the scheme to suit themselves rather than their customers.

I can leave my comments on Bord Bia until later.

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

While Deputy Cahill has the floor, does he have any questions on programme A?

Jackie Cahill (Tipperary, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Chairman, I might come back in again.

Michael D'Arcy (Wexford, Fine Gael)
Link to this: Individually | In context | Oireachtas source

On the same point, it is important that the Minister and his officials understand that the banks are not making this money available for a term of six years. It is ranging from two to four years. Numerous people have come to me who would like to have the opportunity to avail of a six year term, but the banks have tried to split the amount into a number of different timeframes for different usages. In truth we anticipated that it would not be overly cumbersome but the banks have refused quite a few people. It is as important for the Minister and the Department to have the analysis on how many people the banks have refused, the reasons for refusal and any other information the Department can acquire. If a person is refused a loan under this scheme, does he or she have the opportunity to go to the Credit Review Office to have the decision reviewed?

If the Bank of Ireland has allocated all the money, but a decision is under review, is it possible for that person to get a loan at 2.9%, or will he or she fall into a different category? From my experience when a bank's provision for low interest loans is gone, it is tough luck as the money is gone.

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

Does Deputy D'Arcy wish to comment on programme A - food safety?

Michael D'Arcy (Wexford, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Chairman, I will come back in later.

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

Deputy Penrose is next.

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

I am not surprised by the banks. I hope the Minister and his officials will not be taken in by them. They have ridden roughshod across the general public for a long number of years. They are doing the same thing in this regard. I understood the loans were to be structured in such a way that people who wanted an interest-only loan for a number of years, could do that. Obviously I would not advise that, because I believe one is better off to get tickling at the capital, if that is at all possible.

In fairness to the Minister, this is a worthwhile scheme and time has been spent in framing it, however it is useless if the banks are behaving as banks do notwithstanding that they have two floors of foundations under them rather than one. Are the banks not making money from this scheme? I am sure they are making money from it. Banks never do anything without making money. This is such a successful scheme, however a number of farmers would benefit if the Minister could widen its availability, particularly in terms of what is up ahead. Would the Minister consider expanding this scheme? I know that the downturn in prices for tillage in the past number of years has brought this scheme to the fore. I genuinely hope the Minister might extend it.

The banks appear to be found wanting again, but that is no surprise to me. The promises and commitments they make are just rhetoric. I believe the scheme should be subject to detailed evaluation and assessment. The Department together with the Strategic Banking Corporation of Ireland should have a major input into this assessment, it should not be left to SBCI alone. Deputy D'Arcy is correct in asking for the reasons that loans were refused and the number of refusals. It should not be a two liner, but a detailed response on the reasons that low interest loans were refused. How will we help those in need who were refused low interest loans?

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

I call Deputies Kenny and McConalogue on the same issue.

Martin Kenny (Sligo-Leitrim, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

I apologise for being late. Having read through the Minister's opening statement, I see he raised the marketing campaign of Bord Bia. I am very conscious that today the European Commission has banned imports into Europe of beef and meat products from four companies in Brazil.

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

Will the Deputy speak on the low cost loans first?

Martin Kenny (Sligo-Leitrim, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

Yes.

Charlie McConalogue (Donegal, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

My understanding of the SBCI loans, was that it was a €25 million loan per annum that was scheduled in such a way that it would recur every year for up to six years. Obviously there was some European money put into the scheme as well as State funding. It was leveraged by taking in additional funds from the SBCI. The overall objective is that loans would be available every year balanced out over the six years.

The feedback that I am getting is similar to what other Deputies have been getting, is that in many cases the banks are limiting the loans to one year or two year term loans. Therefore what happens to the value of the overall fund in years two, three, four and five? Will it not be drawn down in those instances? If the full amount of the fund is lent in year one, once one gets to year two, those who received a one year loan are out of the system. There should be some unspent funds that could be budgeted into year two. Similarly in years three, four, five and six, is the money in the fund not being leveraged and drawn down? Is the money not in the system as a result of the fact that short-term loans were given at the outset? Is the full scope of the loan being drawn down in later years? For example if €3 million or €4 million is lent out for two years, once it comes to year three, will the banks be able to lend money to somebody else for another four years? I am not clear on how the system works.

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

I thank Deputy McConalogue. I have a question on the same issue. I wish to raise the inconsistency of the banks. I know that AIB have dealt locally with all the farmers, however, if one applies to Bank of Ireland, one will get a text message three weeks after making the application, to be told that a bank official will be in contact in a number of weeks, as they are dealing with the loans centrally. I know that several Bank of Ireland customers are still waiting for a response, having applied before the deadline. We are now coming into the busy farming season, when farmers need cashflow.

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I thank the Chairman and members for their questions. It is important to recall the reason the scheme was necessary. In a nutshell if one goes back to the first quarter report of the Central Bank of Ireland in 2016, it did a league table of the cost of credit across the eurozone member states. Ireland was firmly rooted in the relegation zone in terms of what people were paying for credit here relative to Austria, which had the most competitive rate at 2.2%, if memory serves me correctly. That is shades of the point made by Deputy Penrose. The banks have always managed even in difficult times to make its Irish customers pay a premium rate. There are many reasons for that and I do not want to go into them today.

When we received the €11 million as part of the EU compensation package last year, which was available across all the livestock sector, our thinking was that spreading the money thinly would not give anybody anything of benefit. We added €14 million of Exchequer funding and leveraged €150 million at the interest rate, which was 2.95%. The terms and conditions of the scheme is that loans are up to a maximum of six years, but banks were taking account of individual circumstances. I know that some loans were approved for a period of six years; there are loans that were approved for 12 months; and, there are loans for every period in between these timescales. The banks had discretion in terms of their individual clients. There were options for interest-only loans, and a term of up to six years.

The applicants have access to the Credit Review Office. In terms of managing their loan portfolio, each individual bank will need to manage that. From my personal experience of dealing with the Credit Review Office, they turn the reviews around quickly. In regard to a person who was refused a low interest loan and went to the Credit Review Office, which overturned the bank's decision, I do not imagine the bank would be in a position to say that all the money from the fund is gone and they have to hold funds, pending an outcome of an appeals process. We will take a great interest in the experience of this loan fund. We will learn who drew down the funds, the sectors that were funded and the average size of the loans. From hearing the experience of those in my constituency, my information is that the average loans tend to be in the region of €20,000 to €30,000. There might be some at the very top end, but most are in the average band. I think it shows there is a pent-up demand. For those banks outside the three banks that were participating - AIB, Bank of Ireland and Ulster Bank - there is evidence they have responded competitively in terms of other products geared at the agriculture sector. That is what we wanted from this. In many respects it would have been a goad to the banking industry to step up to the plate and provide access to funding.

We will be tracking this and we will get details of the profile, the average loan amount and the average loan in due course.

On Deputy McConalogue's point, if the fund is given out but it is paid back in 12 months, that does not mean the fund is not there. There is €150 million of loan approvals, whether over 12 months or five years, and that is the term of the loan product. We await with interest the full profile returns from the sectors that were involved, including the size of the loans, in order to see what lessons we can learn from it. Generally speaking, I believe the experience has been a positive one.

Charlie McConalogue (Donegal, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I want to come back to the Minister for further clarification on the point I made. Am I right in saying that the €150 million has been lent out?

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

All of the banks have indicated that their funds are committed. It is a case of whether they have been drawn down.

Charlie McConalogue (Donegal, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

By and large, the €150 million is committed at this stage. The idea of the €25 million, which is part State-funded and part EU-funded, was that it would ensure that overall pot of €150 million over six years and it provided the basis on which the lower interest rate could be had from the banks. When the SBCI loan was announced at €150 million, my expectation was that this would mean there would be €150 million of potential credit in the system for up to six years, although people would obviously be paying it back over that period. Let us say that all of the loans are approved and that there is €150 million in the system and that €50 million of this is lent for one year only, then by the time the second year arrives, there will be only €100 million of loans in the system. Obviously, money will be paid back over time, for example, by the third year if some of it is lent for a three-year term. That is my point. My understanding was that the structure of the loan was such that it allowed for six years. If it is the case that a certain amount was budgeted in that way and if a certain amount of it is just one-year, two-year or three-year finance, can that then re-enter the system and can it be re-lent by the banks under this SBCI scheme? This would mean that any money lent for a one-year term could potentially be re-lent for up to five years to somebody else. Otherwise, the loan is diluted and is not of as much value to the farming community as it had appeared to be when it was initially launched.

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

The Deputy is asking about recycling some of the money.

Charlie McConalogue (Donegal, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Yes.

Michael D'Arcy (Wexford, Fine Gael)
Link to this: Individually | In context | Oireachtas source

The Minister said AIB has allocated all of its funding. Has he requested an analysis in respect of how many people were refused? If he does not have that information, I believe he should get it and give it to the committee as quickly as possible. It is also important that we find out how many people were refused by SBCI and how many did not meet the criteria, given that there were qualifying criteria.

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

There was no qualification for SBCI.

Michael D'Arcy (Wexford, Fine Gael)
Link to this: Individually | In context | Oireachtas source

There was a form to be sent to SBCI and it was to sanction the bank to go ahead with the application. I am pretty sure there was. We need to do as much analysis as we can. There is no point having the analysis in four months' time.

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

We will have to wait until there is drawdown.

Michael D'Arcy (Wexford, Fine Gael)
Link to this: Individually | In context | Oireachtas source

There is no drawdown if a person is refused.

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

We will get the profile of applications, approvals and rates.

Michael D'Arcy (Wexford, Fine Gael)
Link to this: Individually | In context | Oireachtas source

We need to find out now how many people have been refused.

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

We will have that as soon as possible.

Jackie Cahill (Tipperary, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

While the Minister said the scheme was envisaged to run over different periods, that is not my understanding. Banks have forced men to take shorter terms than they wanted. I know of numerous people who wanted a six-year term but this has reduced to four, three or even two years in some cases. The farmers saw the availability of cheap credit over a period and believed it would ease cashflow problems to pay the money over as long a period as the scheme allowed. I cannot understand why the banks have done this. The scheme was designed to be a six-year scheme with, as has been said, an option that the first three years would be interest-only, if the client so desired, although, like Deputy Penrose, I do not think that was such a good idea. I do not understand why the banks have forced customers to take shorter terms than were envisaged under the scheme. The scheme was to ease a farmer's cashflow and help him to get back on the rails when he was under pressure to clear current debt levels. I would like the banks to explain why they have refused clients who wanted a six-year term and forced them to go for a significantly shorter term.

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

As some bank customers received de minimispayments previously, this would have affected the amount they could draw down. Is that correct?

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Yes.

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

How does that system work? Would that be the only reason a person would have to accept a term shorter than six years?

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Under the scheme, we extended the availability of the loan to the mushroom and tillage sectors. The Department keeps a record of all beneficiaries who would have benefited from de minimispayments up to now. It then had to keep track of whether the subsidy element that was available if this loan exceeded the €15,000 threshold over a three-year period. That is important. I would imagine that very few people are impacted upon by this and that the level of subsidy would only possibly kick in for people who are taking out a loan at or near the maximum amount.

On Deputy McConalogue's point, the €25 million that went into it was not part of the capital that was borrowed, it was actually a subsidy to the cost of the loan scheme and the interest rate. Once the capital is loaned out and the subsidy is available to the beneficiary - whether it is over one year, five years or six years - and the loan is repaid, the capital is not available for a second or third time. For example, if the original loan is for three years, the capital is not available for three more years.

I take Deputy Cahill's point that people wanted five or six years and ended up with half of that or less. Under the scheme, the interest rate was subsidised and other elements made it more cost effective, and people did not need the deeds of the farm because it was an unsecured loan. Apart from that, however, normal terms and conditions applied in regard to the banks' criteria and assessment of a loan application.

Jackie Cahill (Tipperary, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

With respect, when a scheme is designed to run over a six-year period to help a fellow with cashflow problems, why should the bank have the prerogative to reduce the length of the term? This was a scheme the Department brought in to give the opportunity for a six-year term for cashflow issues but the banks forced clients to take significantly shorter terms. The banks have done it and got away with it but I cannot understand why they were allowed to do so. If the farmer wanted a six-year term and the scheme allowed for that, why should the banks have the prerogative to force him to take a shorter term?

Michael D'Arcy (Wexford, Fine Gael)
Link to this: Individually | In context | Oireachtas source

To clarify, we all know it is an unsecured loan, and that is in the terms and conditions. However, there are farmers getting much greater loans at much higher interest rates for machinery, and with one quarter of the paperwork and effort that is going into this loans process from the same banks. Somebody has complicated this nicely in order for the banks to benefit.

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I would be very concerned about bank lending. We have come through quite a steep learning curve in terms of bank lending and inadequate paperwork. I would not be an advocate of there being inadequate or shoddy paperwork.

Michael D'Arcy (Wexford, Fine Gael)
Link to this: Individually | In context | Oireachtas source

The Minister is misunderstanding me. What I am saying is that the banks have made it overburdensome.

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

To come back to Deputy Cahill's point, the scheme was for a maximum of six years. It did not state that every loan applicant was entitled to six years. The State's input was to subsidise the loan and address a market gap. It was not a question of the State getting into the banking business. It was unsecured credit, a subsidised interest rate, an option for interest only, for a maximum of six years. That did not mean that every loan was going to be approved at six years. After those elements of the scheme were designed any individual loan application was subject to normal banking considerations.

Valid points have been raised. This has been in many respects a maiden voyage for the Department to address a gap in the market. Broadly speaking, the interest in it has proved that it was a wise route to take in terms of the funding we had to play around with. As soon as we can gather and collate the information we intend to do that and see what lessons we can learn from it. At this stage we cannot draw those conclusions and it would be wrong to do so. The questions are: Why was it one, two or six years in different circumstances; what sectors benefited; what message do we take from the fact that it may have been excessively dairy and tillage rather than beef and is there another issue to be addressed in other sectors? The €11 million that the European Union, EU, put into it has to be drawn down by the end of September 2017. That is the absolute deadline by which we will have all the data. I suspect, given the level of interest, that it will be much earlier than that. Establishing the approvals, drawdowns, rejections, the reasons why and who benefited, what the terms were and the conclusions we can draw from all of that information are important exercises from our point of view. We will undertake them in conjunction with the banks involved and the Strategic Banking Corporation of Ireland, SBCI, at the earliest possible date.

Jackie Cahill (Tipperary, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I am not happy. Why would the banks reduce the time a client wanted? The longer it was for a client with cashflow difficulties the better for the client. What did the bank gain by forcing him to take a third of the length of time he wanted? There has to be a gain for the banks. It definitely was not a gain for the clients. The banks have not operated the scheme in the spirit the Department intended. I have no issue with the Department. The banks have manipulated the scheme for their own benefit. Reducing the term of the loan is not in the client's interest. The longer he had the cheap money, the easier it was going to be for him to get his cashflow right.

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

In so far as the Department or the State had an influence it was on the unsecured, the interest-----

Jackie Cahill (Tipperary, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I am not blaming the Department at all. I want to know why the banks made the decision to force clients to take a shorter term.

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Within the terms of the scheme it was not a guaranteed six years. If the Deputy reads the terms he will see it states a maximum of six years.

Jackie Cahill (Tipperary, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I accept that fully.

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I am not defending the banks and we will have to find out why when we get the information.

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

It might be appropriate for the committee to invite the banks in here soon to give a rundown of their position and the process they put through. Would that be helpful?

Jackie Cahill (Tipperary, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

That might not do any harm.

Charlie McConalogue (Donegal, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I am still not clear on the structure of the scheme and would like the Minister to explain how the fact that short-term loans are being offered does not mean that the fund is being under-utilised.

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

The funding that the State and the EU put into the loan scheme and that was used to leverage the fund at €150 million, at the subsidised interest rate, was to make it available to farmers without having the security that banks would normally have, for example, the deeds of the farm, and to have it at a competitive interest rate, unsecured, interest free for a few years. That was the State's input. Thereafter it was subject to normal terms and conditions. We see that in a few weeks the fund has been drawn down completely. We await the information from the individual banks and the SBCI to see what lessons we can draw from that, the sectors, the size of the loans and their terms. We want to know what lies behind the terms between one and six years, all for future purposes.

With €14 million of Exchequer funds and a total cost of €25 million to subsidise it, this has not been a cheap product but it has identified a gap in the market and driven others to be more competitive. Until we get the full information on the drawdown we will not be able to answer all the detailed questions. I will meet the chief executive officers, CEOs, of the pillar banks and it would be appropriate for the committee to meet with them too on that and many other issues.

Charlie McConalogue (Donegal, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

It is a good scheme and I hope it will help drive down the interest rates in the market. There will be lessons to be learned from it and engaging with the banks will be important.

The Minister, however, could give more clarity in response to my question. The Department, with the SBCI and the banks, structured and put this scheme together. The perception at the outset was that it would be available to farmers for terms of up to six years. The Minister has outlined that the €25 million ensured the cost of that lower interest rate for terms of up to six years.

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

There is also the fact that it was unsecured and the cost of that.

Charlie McConalogue (Donegal, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

If a significant proportion of it – and we do not yet know the proportion – is one year or two year terms, part of it will not have been used. The only way that would not have been utilised is if the Department, working with the banks and the SBCI, had factored into its figures the fact that a proportion of these loans would be for a one, two or three year term. Did the Department plan for the fact that it would be a one year term? If it did, so be it but that would mean the €25 million would have been utilised.

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

The terms were up to a maximum period. It was always envisaged that there would be loans from anywhere between one and six years. We have to factor in the cost of that over €150 million.

Charlie McConalogue (Donegal, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Did the Department factor in that a proportion of the loans might be one, two or three year terms and how did it do that?

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Of course. That is where the €25 million went and that is why the terms of the loan scheme stated up to a maximum of six years. It was always envisaged that there would be loans from everywhere between one and six years. When we get the full feedback we will-----

Charlie McConalogue (Donegal, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I know we will not be sure until we get the final information but I want to clarify the drawdown of the loan maximising the €25 million being invested by the EU and the State? The answer is yes or no in respect of how the Department structured it. If it did not provide for a certain percentage being one, two or three year terms I put it to the Minister that much of that value is being under-utilised.

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I am satisfied that in the very extensive engagement we had originally with the SBCI and then through it with the pillar banks the product we delivered in all its terms and conditions was the best that could be negotiated for €25 million in terms of delivering it cost-effectively to farmers. We await the experience of the drawdown and will learn the lessons of the scheme if there are lessons to be learned.

A maximum of six years is in the terms and conditions but it was always envisaged that there would be terms of fewer than six years.

Charlie McConalogue (Donegal, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I put it to the Minister that if he was handing over €25 million to the banks for that purpose and he was not clear on the percentage of loans that would have different terms, then it was wide open for the banks to get the better end of the bargain and make as much money as possible. To play devil's advocate, if all the loans were to be handed out over two years, in two years' time that €150 million would be out of the system and it would be normal bank lending again. That would be the extreme end of it but I want to be clear on whether the Department of Agriculture, Food and the Marine had clear targets and guidelines in terms of the proportion of loans that could have different terms.

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

As I said, until we get the figures on the drawdown we cannot answer that question but we always envisaged that there would have been loan terms of anything from one to six years.

Charlie McConalogue (Donegal, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

When the Minister says "envisaged", as part of the Minister's agreement with the banks, were targets set as to the percentage of the overall loans that would be for certain terms? If the Minister had agreed with the banks that he would give them €25 million for this product but left it to them to decide the number of years for that €25 million, then it would be a very loose deal.

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Until individual farmers walked into the banks and made applications, we could not say there would be X number for one year, X number for five years and X number for six years. In structuring a loan portfolio like that we would have had to engage with the banks, as the Strategic Banking Corporation of Ireland, SBCI, did, and said that this is what we want to achieve. In terms of the profile of lending across various sectors, there would have been sufficient experience within SBCI and my Department to ensure we got the best result possible for the €25 million. We could not state definitively how many applications would come in for one year, five years or six years. Ultimately, in terms of the individual banks, that became a decision for the banks to make. Our subsidy was to ensure that the interest rate, the term of the loan and the unsecured nature of it made it more attractive than anything already in the marketplace, but we await the outcome on that.

Jackie Cahill (Tipperary, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

The banks have forcibly reduced the terms for loans with clients. Following fierce resistance from clients, they have halved the terms in cases. The banks had a policy of reducing the length of time and in my view that was against the spirit of the scheme.

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I am familiar with loans that have been approved. I have had many approaches from people and, by way of information, I have to say it is not the Department that approves them but the individual banks. I have personal knowledge of loans being approved for constituents with terms of six years and others with terms fewer than six years. The full profile is there, but we await the detailed feedback from the banks to see what the outcome is, and we will share that with the committee as soon as we have it. We are very anxious to ensure that whatever lessons need to be learned from the scheme are learned but I am very satisfied that in the negotiations, we constructed a scheme that was unlike anything in the marketplace up to now.

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

Until we get representatives of the banks in to give a profile in terms of who, what, where and when, we will not get all the answers we want today. I do not mean to cut off any speaker but-----

Charlie McConalogue (Donegal, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I accept that but I will make a final point. It is not clear from the responses the Minister gave to the questions I asked that value for money was got regarding that €25 million. He is not giving us the information that would give us clarity on whether that value for money was got.

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

In terms of the value for money, if anybody went into a bank and borrowed the same amount of money, as he or she did, at a term of one year or six years, he or she would have been paying much more.

Charlie McConalogue (Donegal, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I understand that. The farmer is benefitting but-----

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

It is undoubtedly true that he or she is getting value for money.

Charlie McConalogue (Donegal, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

-----has the Minister already agreed that the banks will get all of that €25 million or could there be an underspend in that regard? To summarise, it is clear from what the Minister is saying to me, although he is not able to give me the details, that he has agreed with the banks and the SBCI that they would get €25 million. That figure is clear. It is also clear that the maximum amount that will be lent out is €150 million but the Minister cannot give me clarity on the loan terms. What proportion of the different loans will be for what terms? The banks are getting €25 million-----

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

To be fair, how do I know who went into the bank on the main street in Ballybay or Letterkenny-----

Charlie McConalogue (Donegal, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

The Minister knows what he agreed with the banks.

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

-----and applied for what level of loan? We have to wait until we get-----

Charlie McConalogue (Donegal, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

My point is that the Minister could be clear on what he was getting for the €25 million he was paying the banks, but he cannot do that.

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

At the risk of repeating myself ad nauseam, we are getting a subsidised interest loan, unsecured credit-----

Charlie McConalogue (Donegal, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

For how much? The Minister cannot tell me that.

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I cannot tell the Deputy because I do not know what individual farmers have borrowed so whether someone borrowed €5, €25 or €105, until we know the profile and the terms-----

Charlie McConalogue (Donegal, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

The Minister is giving them €25 million but he does not know how much cheap credit he is purchasing in total.

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

It would have been on the basis of SBCI's engagement with the banks, discussing their profile of agricultural lending and how we could engineer that to be more affordable for farmers and looking at subsidising the interest rate, unsecured credit, which is a cost, as opposed to having security for credit. The €25 million went into ensuring that the scheme was more competitive than anything already in place. We will get the detailed breakdown from the banks and then give the Deputy the full picture of it.

Michael D'Arcy (Wexford, Fine Gael)
Link to this: Individually | In context | Oireachtas source

In all likelihood, what would have happened is that they took a figure of three years and decided that would be the average term for the loans. Every 1% subsidy the banks get paid, and this is how it would have happened going back to the 1980s and 1990s, is €1.5 million, so instead of it being 2.9% it should be 5.9%. That 3% is close to €5 million per annum. That is where the money is going.

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

We have given the issue enough of an airing.

Charlie McConalogue (Donegal, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

The Minister was not able to tell us that. That is what I was asking the Minister but I presume that was the type of agreement that was done.

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

To move on, the Minister is meeting the CEOs of the banks. We will invite representatives of the banks to come in as soon as we can. That will be an important conversation to have and we will get the details. I hope members will have the same questions for the banks' representatives when they come before the committee and that they will interrogate them in the same way. It would be very important to get answers from them as well.

Jackie Cahill (Tipperary, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

There will be no concerns in that regard.

Michael D'Arcy (Wexford, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I might not be here for the banks' representatives. I spent two years in this room and I do not know-----

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

The Deputy has the experience. Are there any questions on Programme A, which is food safety, animal health and welfare, and plant health?

Michael D'Arcy (Wexford, Fine Gael)
Link to this: Individually | In context | Oireachtas source

This is a subject that is a little raw for me at the moment. In terms of plant, I am using this example to make a general plea and I ask the Chairman to allow me some scope in that regard. The usage of quads on farms is becoming very dangerous. The number of people killed or paralysed per annum is far too high. I spoke to a health and safety specialist who made the valid point that if there was a device on a building site that did as much damage as quads every year, it would be banned. There was a tragedy in my own area in the past week involving good friends of mine who lost their son. The number of accidents on these machines is too high. I am not saying quads should be banned but the Department, with the Department of Finance, should be able to do something to improve safety. The only way to improve safety is to get rid of them. There are much safer vehicles available. The Gator buggies are much safer. They are slower, wider and they do not turn over to the same extent. For a period of time the VAT and VRT on those vehicles should be reduced to zero to give the farming sector the opportunity to rid farms of quads. Too many people are killed or paralysed every year.

The committee should take up this matter. We all give out about overbearing Government agencies, but it is not overbearing when one has to visit a farm after a tragedy.

Jackie Cahill (Tipperary, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I have a question on the number of residue tests carried out in a calendar year. Are they done on a random basis and are they carried out in processing plants or on farms? The target for 2017 is 19,000, which is an increase of 500 on last year. What criteria are used for arriving at that figure of 19,000?

Charlie McConalogue (Donegal, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Is the beef data and genomics programme dealt with here?

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

That is in the next section.

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

On Deputy D'Arcy's question about farm safety generally, the Department does a large amount in this area in terms of the half-day farm safety course for people drawing down their grants, the knowledge transfer groups and a series of initiatives. In truth, we are losing the battle. There is no point in saying otherwise. I had a meeting earlier this year with the Health and Safety Authority in conjunction with the Minister of State, Deputy Pat Breen, to discuss how we might address this issue. We have to take an approach whereby nothing can be ruled out in this regard. I am familiar with the point the Deputy made about quads. I am also aware of fatal accidents in my constituency involving quads. I do not wish to give an exact figure in case I am wrong but, if my recollection is right, accidents involving farm machinery constitute a very high proportion of the overall number of accidents. We might have to contemplate issues that are unpopular.

I visited a rural national school in west Cork recently. The school has safety ambassadors and one of the points I made to the children was that when they went home they should badger their parents about getting the tractor serviced. There are simple problems such as faulty brakes. We would never consider driving a car in those circumstances but we are not as vigilant about the safety of farm machinery. Twenty years ago tractors on farms were much smaller. Now they are enormous vehicles, so we must ensure all of them are fit for purpose and serviced regularly.

Michael D'Arcy (Wexford, Fine Gael)
Link to this: Individually | In context | Oireachtas source

What about my question on quads?

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I do not have the capacity to ban quads. The Deputy appears to think they should be banned. However, we must create an awareness of how to use them appropriately. I sympathise with the Deputy's friend who lost their son. I read about the accident. On reducing the VAT rate on alternatives to zero, that is an issue for the Minister for Finance. My view is that we need a change in attitude in our approach to farm safety, particularly to operating machinery. Part of that involves education and another part would be the compulsory servicing of machinery to ensure it is fit for purpose. If my recollection is correct, most fatal accidents on farms are machinery related.

Michael D'Arcy (Wexford, Fine Gael)
Link to this: Individually | In context | Oireachtas source

That has to stop.

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Regarding the residue, it is targeted sampling. It is an EU regulation and requires random sampling at various points, so it might be on the farm or at the processor. It is to meet EU regulations on the level of residue sampling.

Jackie Cahill (Tipperary, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Is there a percentage we have to fulfil?

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

To be honest, I am not certain but I am advised that we are obliged to carry out a minimum level of sampling.

Jackie Cahill (Tipperary, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Are the results made public?

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I am sure they would be if we were failing to meet the criteria. We publish the residue sampling tests. All of this is part of the criteria that underpin our offering on markets abroad. It is a critical part of our food safety.

Jackie Cahill (Tipperary, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I accept that. I was just wondering how the figure was reached and what the criteria were for selecting 19,000.

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

It is an EU requirement.

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

We will proceed to programme B, which is the farm payment schemes. Do members have any questions?

Charlie McConalogue (Donegal, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

The beef data and genomics programme, BDGP, relates to animal welfare under programme A, which is why I asked if it would be dealt with there. Currently, 24,500 farmers are signed up under the programme. The Minister indicated that €52 million is available for the programme in 2017. We have had a debate, and will probably debate it again, on the need for additional supports for the suckler cow herd and, in particular, whether there is capacity to increase payments under the BDGP towards €200. There was a commitment at the outset to open it to a capacity of 35,000 farmers. Is €52 million sufficient funding for that to happen this year and to accommodate the additional 10,500 farmers? Perhaps the Minister will comment on that.

Jackie Cahill (Tipperary, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I see there are no more applicants to be paid under the rural environment protection scheme, REPS, the agri-environment options scheme, AEOS, organic and the green low-carbon agri-environment scheme, GLAS. I realise there has been supplementary funding for GLAS for the hen harrier designated land, but I understood there would be a specific compensation scheme for land that is designated a special area of conservation, SAC. There does not appear to be any funding for a specific scheme for those areas.

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

On the BDGP, we are examining that at present but no decision has been reached on it yet. The Deputy labours under an illusion that there is an enormous, unspent pot of gold in the Department, but if there was, we would open it immediately. I hope there might be some room for manoeuvre but no decision has been made on it yet.

On Deputy Cahill's question, we tendered for the appointment of a consultant to design a scheme on the hen harrier. I am advised that a preferred consultant has been identified but the contract has not yet been signed. The principle is that when the contract is signed with the successful tenderer, they will design a scheme in conjunction with the Department and those who hold designated lands. It is envisaged that applicants will be invited into such a scheme in 2017 with payment in 2018.

Jackie Cahill (Tipperary, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

There is no provision for it in this year's budget.

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

It would stretch us to get a scheme up and running, with applications in, validated and paid, in the time we have left, so payment is in 2018.

Jackie Cahill (Tipperary, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

When will the criteria for the scheme and information on the monetary compensation be available?

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I expect it will be before the end of the year.

Charlie McConalogue (Donegal, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I will not get stuck into the issue of the underspend in terms of the Government's commitment. I have been very clear about the Minister following through on the Government's commitment to fund the rural development programme to the extent committed to across the various schemes when the rural development programme and the schemes were announced by the Minister's predecessor.

However, that is not the question I asked the Minister. I was concentrating specifically on the beef data and genomics programme, BDGP. I asked whether the €52 million in the Estimates, which we are discussing today, is sufficient to reopen the scheme to facilitate the 35,000 farmers committed to be facilitated within the scheme or whether additional funds would need to be found to reopen it with the inclusion of an additional 10,000 farmers.

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I am not sure from where the Deputy got the figure of 35,000. I am not aware of any commitment from this Government or the previous one of 35,000 participants in the BDGP. However, in the context of the funding available for 2017, we are exploring the options that might be available to us.

Charlie McConalogue (Donegal, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

What was the commitment, as far as the Minister understands?

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

The commitment was to see what scope there was within the rural development programme to open the scheme to new applicants.

Charlie McConalogue (Donegal, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Yes, but-----

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

The extent to which the scheme will be opened will be determined by the present financial scope, which is limited.

Charlie McConalogue (Donegal, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

My understanding is that when the beef data and genomics programme was announced and launched by the Government, a specific budget was allocated to it and, if I recall correctly, €250 million was to go towards the BDGP to facilitate 35,000 farmers being part of it. That was the Government's commitment. Perhaps I am wrong about that, and if I am wrong-----

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

The Deputy's figure of 35,000 is well wide of the mark.

Charlie McConalogue (Donegal, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

How wide?

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I will tell the Deputy when I have done the maths on it and we see what discretion we have in terms of the funding-----

Charlie McConalogue (Donegal, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

No-----

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

If there is scope in the context of the €52 million to open the scheme, we will consider that. That exercise is under way in the Department.

Charlie McConalogue (Donegal, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I am just putting it to the Minister what the Government committed to, that is, 35,000 farmers.

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

A figure of 35,000 was never mentioned.

Charlie McConalogue (Donegal, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

The Minister cannot clarify the actual figure committed to.

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

No, but I know it was not 35,000.

Charlie McConalogue (Donegal, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Can the Minister’s officials clarify the figure committed to under the BDGP? Specifically, within the €52 million for this year, can the Minister give us a breakdown-----

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

The €52 million, as the Deputy is aware, is the funding being used to pay the current scheme. It depends on the cost per applicant and what scope remains within the €52 million then to reopen the scheme, if any, and these matters are under consideration. I am satisfied that the €52 million will meet all our existing liabilities. The question is what discretion there may be within that envelope to meet additional payments.

Charlie McConalogue (Donegal, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I will ask the question about the €52 million another way. There are 24,500 farmers in the beef data and genomics programme at the moment. We are agreed on that. What is the projected cost of paying those 24,500 farmers this year?

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

It varies from one applicant to another. When we have the full figure, we will know what discretion we have.

Charlie McConalogue (Donegal, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I find it incongruous that we cannot be clear on this matter today, towards the end of March. We know 24,500 farmers are currently in the beef data and genomics programme. I am simply asking how much it will cost this very year, which we are a third of the way through, to pay these 24,500, and the Minister is not able to tell me.

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

It will cost in the region of €48 million.

Charlie McConalogue (Donegal, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

If it will cost €48 million, that means that within the current beef data and genomics programme this year, €52 million is budgeted, which means there is €4 million, potentially, in the current budget to work with. Therefore, if the Minister were to reopen significantly the beef data and genomics programme this year, particularly if he were to reopen it for the 10,000 additional farmers, which I am saying was committed to at the start, he would have to find additional funds to do so. It would not be provided for in the current €52 million. He would only have potentially-----

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

As I said-----

Charlie McConalogue (Donegal, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

-----according to current projections of €4 million-----

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I never committed to a figure on this. I am not aware from where the figure of 35,000 to which the Deputy alludes comes. There may also be, in terms of the €48 million to pay liabilities, other liabilities carried over from 2016 which may have to be paid out of the remainder. We are exploring all these options. If there is discretion, we will consider what the best way is to use that discretion.

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

What kind of timescale is the Minister talking about if there is discretion?

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

If we want to spend the €52 million, it would have to be later this year - as soon as possible. As I have said previously in the Dáil Chamber, we are working through a full overview of our rural development programme commitments through the lifetime of the programme to see what scope, if any, is there. I can confirm without having full sight of all the details that the scope is extremely limited, as I said, notwithstanding myths being perpetuated to the contrary. If there is scope, it is a question of where we use it to best effect.

Charlie McConalogue (Donegal, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

It is not a myth to quote back to the Minister the Government's own promises as to how many participants will be in the scheme and how much will be spent on it. He chooses to regard-----

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

The Deputy is fabricating a figure of 35,000.

Charlie McConalogue (Donegal, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

The Minister talks about myths. I am quoting back to him his predecessor’s commitments in respect of this programme and in respect of GLAS. They may have become myths at this stage but they certainly were not myths when the commitments were made.

I will move on to the question of expenditure on the GLAS programme. GLAS III has reopened and 14,000 farmers have applied to it. This year's budget for GLAS III is €214 million. If those 14,000 additional farmers under GLAS III are to be paid for the full calendar year of 2017 and if the average payment is the same as what it was until now for GLAS I and GLAS II, that is, approximately €4,500, it would take €236 million in 2017 to pay fully those 14,000 additional farmers who have applied and who have been told they will be accepted. However, the figure in this year's budget for GLAS is €214 million. There is therefore approximately a €20 million or €22 million discrepancy in the figures - that is, if the average payment is what it has been until now. Obviously, those 14,000 farmers who have applied to GLAS III are hoping to be paid for the full year and hoping the budget will be there this year. I ask the Minister to address this discrepancy in the GLAS budget for this year. Does it arise from the fact that farmers will not be paid for the full 12 months or the fact that the Minister expects the average payment to be less than what it has been until now?

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

In many respects, GLAS accurately paints the picture of the rolling programme of payments that happen under the rural development programme. The Deputy is aware that we are paying out in the calendar year of 2017 what would have been considered 2016 liabilities in some respects. Therefore, we are paying out some of 2016's liabilities from the envelope of money provided for in 2017 and we will also pay out applications for 2017 from it. People may not get 100% of their 2017 payment. We have increased the number of applicants by 13,000 this year, taking the figure to more than 50,000. It is the most successful environmental scheme. There is a rolling element to it. All applicants, it is envisaged, will get an advance payment. Whether or not they will get 100% of their payments, from Deputy McConalogue’s assessment of the figures, it is likely that the balancing payment will slip into 2018, just as the 2016 payment is being paid to some in 2017. That is the nature of all the schemes the Department runs.

Charlie McConalogue (Donegal, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

It is very disappointing to hear that. Our experience of GLAS payments for 2016 was that commitments were made that the farmers would be paid in December but this has not happened. That has rolled into this year. There are many farmers - up to 5,000 at the moment - in a very difficult position because of this. Regarding the Department's operation of the scheme and the learning of lessons from it, I would have expected that we could be crystal clear about those 14,000 farmers who have signed up for GLAS III and what percentage of their payments they will get this year. They would have assumed in fairness that there would be a sufficient budget in place so that when they signed up at the end of last year to start the scheme this January, they could rightfully expect to be paid and not be subject to the kinds of delays we have seen recently because there is not sufficient funding in the budget.

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

It is all about choices. When we opened the scheme, we took in every applicant, some 13,000 extra. We could have taken in half of them or less and paid everybody the full amount, instead of taking in everybody and managing the payments in order that they would all be paid. In the calendar year 2017 farmers will receive some of their 2016 payment and some of their 2017 payment. The numbers in the latest tranche have gone up from 38,000 to over 50,000 and I felt it was better to take in every applicant and pay as many as possible. I acknowledge that we are having difficulty in getting all of the payments out, but I think we are making the right choice because we are getting as many beneficiaries as possible into the scheme.

Charlie McConalogue (Donegal, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Each of the 14,000 farmers who applied to participate GLAS III made the choice to apply and signed up to a plan, much of which they will carry out from 1 January this year until December in the expectation that they will be paid. If the Minister's choices mean that they will not receive the full payment this year, perhaps he might confirm what his choices were for the 14,000 who signed up in good faith for the GLAS scheme. It would be better if they were informed in order that they would know in advance what their financial position would be, rather than finding out next December that they will not be paid because of a choice the Minister has already made. We need to learn from the hardship farmers participating in GLAS have experienced in the past year or two. The onus is on the Minister to communicate to farmers where they stand on payments due at the end of the year.

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

The choice we made around the time of the closing date for GLAS III was that we would take in everybody. It was after the budget and included in the Estimates for 2017. Given the environmental gain from the schemes and the financial benefit to individual farmers, the best thing to do was to leave in all applicants and manage the payments in order that they would all be paid. However, not all of them will receive the full payment for 2017 in the calendar year.

Charlie McConalogue (Donegal, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Does the Minister plan to communicate that information to them?

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I think farmers are well aware of it.

Charlie McConalogue (Donegal, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I do not think we are. The Minister has made apologies and excuses in the past few months for the mess which has resulted in many farmers not being paid and it is clear that preparations were not made to ensure this would not happen. There is an expectation that if they are committing to a plan that will take up 12 months, they will be paid. If there is confusion about this, the onus is on the Minister to give them advance warning to avoid what happened last year when farmers were expecting to receive their payment in October or before Christmas but 5,000 of them have still not received it.

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

We have this circuitous debate all the time. We are still paying REPS and AEOS applicants. The applications did not fit comfortably into a five-year programme but spilled over. We took in GLAS applicants for 2017, with a closing date of last December, and they will receive payments for five years. The alternative suggested by the Deputy is that they will receive payments for three years under the rural development programme.

Charlie McConalogue (Donegal, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I am not suggesting that at all.

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

The arrangement for a 75%:25% split in payments is provided for in legislation that has been in place for a long time. We could have decided not to open GLAS III and to pay everybody or open it for far fewer, but our ambition was to get as many members into the scheme as possible and pay the full five years' payment to all who complied with the terms of the scheme. That is what we will do.

Charlie McConalogue (Donegal, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

The scheme will be of great benefit to the 14,000 farmers who have been accepted, but the Minister is saying he cannot be sure whether or how much they will be paid during the year. The budget is underfunded for the purposes of paying all of them this year. Can the Department do the figures and provide clarity on how much and when farmers will be paid? Can it then communicate this information to farmers in advance in order that they will know where they stand? They deserve that much.

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Farmers will be aware of when payments are being made because the Department always communicates this information. The payments have always been made in two tranches and thejschemes have never run on a calendar year basis, as suggested by the Deputy. There will be farmers who will receive both a 2016 and a 2017 payment this year because that is in the nature of these schemes.

Charlie McConalogue (Donegal, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

The Minister has said he made a choice to pay more than he had budgeted for.

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Is the Deputy saying I made a mistake?

Charlie McConalogue (Donegal, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

No, certainly not, but there should be sufficient funds to pay them this year.

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

There are sufficient funds to pay them a five years' payment.

Charlie McConalogue (Donegal, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

The Minister should communicate with farmers to tell them how much they will be paid in order that they will know where they stand.

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

The Deputy is clutching at straws.

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

In the Minister's last appearance in front of the committee we spoke about difficulties under TAMS such as money not being drawn down. What is the current position?

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I can give the full financial drawdown.

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

Has the position improved? The last time the Minister was here only a couple of hundred had drawn down money.

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

A total of 650 have been paid.

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

How many approvals have there been?

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

The total number of applications was-----

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

The total number of approvals was 6,500.

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

There has been an issue under TAMS with people who have received approval but not proceeded to do the work.

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

Has the position improved? There was a fear the money could not be drawn down.

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

There have been nearly 900 claims and a total of 650 have been paid.

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

That is an overall figure of 10% for approvals.

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Yes. Management of the Department's finances has changed. This affects the calculation of any underspend or overspend. There will be a time-limited approval rate in the future and differences between the number of approvals in respect of plant and machinery and that in respect of buildings, including for nutrient management.

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

Does the Department have any idea as to what percentage of the other 5,000 applicants who comprise 90% of the total will draw down money in the calendar year?

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Our problem was that, up until recently, there was no timeline on their obligation. We have changed that now and hope that it will facilitate the process. It will also enable us to manage the Department funding. We put up a certain amount for 2017 and we cannot be certain that it is going to be drawn down. Certainly, if the works are done, the money is there to pay it and we will pay it as quickly as we can, once all of the checks are carried out and subject to notification that the works are complete.

Michael D'Arcy (Wexford, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Just to clarify, the outstanding TAMS claims - 5,000 plus or whatever number it is - are open-ended. Is that correct?

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Yes, most of them. The ones in the most recent tranches have had a limitation on the timelines. I am subject to correction but my recollection is that for plant, if one is buying a low-emission slurry spreader or whatever, the revised arrangement is six months. It is one year for fixed assets, such as buildings. We have 860 claims in, in respect of which 650 payments have been made. Over 6,300 approvals have been issued. Just over 10,000 applications have been received.

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

Are there any more questions on that programme?

Charlie McConalogue (Donegal, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I welcome the animal welfare scheme for sheep. I think the Department has done a good job in terms of structuring the scheme and in the context of the measures that have been put in place. I think I am right in saying that it is now closed for applications. The total annual budget allocated for the scheme is €25 million. How much of that €25 million has been applied for? Will it take the full €25 million to actually pay for the sheep in respect of which applications have been made?

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

A total of 22,500 farmers have applied. That accounts for approximately 2 million ewes.

Charlie McConalogue (Donegal, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

So, will €20 million be approximately-----

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Yes, something more than €20 million.

Charlie McConalogue (Donegal, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

So €5 million of that €25 million would be spare.

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Yes, that is our assessment of it at this stage.

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

Are there any other questions on that programme? I will move on then to-----

Charlie McConalogue (Donegal, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I have a very quick question. I see that €202 million has been allocated in respect of areas of natural constraint, ANC, payments. That is expected to increase by €25 million for next year. As it is relevant to the actual scheme, can the Minister provide an update on the mapping? I know that the structure for payment is going to be changed for 2018. What is the position regarding mapping? When publishing the scientific data relating to those maps, will the Minister ensure that there is consultation in advance on proposals for areas of specific constraint?

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

The timeline that we are operating to, as determined by the Commission, is that we must have this matter completed for basic payment applications for 2018. We are working against the set of criteria that the Commission has laid down. As the Deputy knows, it was done previously under socioeconomic criteria. We are now operating on what they call biophysical criteria to do with slope, gradient, drainage, soil composition, elevation, etc. That work is under way. We expect to have maps in early summer to midsummer. That is what I am led to believe. We are committed, as the Deputy knows, in the programme for Government to increase the payments for 2018 by €25 million. There will be a consultation and engagement with stakeholders, including farmers, on this matter. Our ambition, as I have repeated, is that we would hold what we can where possible. That is certainly something to which I would be personally committed. I have no doubt that this is something my Department will hopefully be able to work towards as well. The criteria are laid down for us. We will be engaging with stakeholders as soon as we have maps to work with on those matters.

Charlie McConalogue (Donegal, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

On areas of specific constraint, in which up to 10% of the eligible landmass is to be included, will these be the subject of consultation with farmers in advance of the Department actually publishing any proposals?

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

My primary objective is to hold the designation. The categorisation within the designation is a further matter, but my overwhelming objective is to hold the designation for the country in areas that are currently designated. We have not considered the sub-categories within that at this stage. I think the highest payment relates to the islands. It varies from that to a much lower payment. At this stage, the overwhelming objective will be to retain the classification.

Charlie McConalogue (Donegal, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Obviously, the classification will be based on biophysical criteria. That will be done in terms of testing, etc. The part in which there is more flexibility is the 10% specific constraint. Any proposals the Minister might have for the specific constraint would not have to be published alongside the maps outlining the results of the biophysical criteria outcomes and assessments. Is that something the Minister will commit to doing later on after consultation or is it something that he is intending to publish all at once alongside the biophysical maps?

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I think it is a job for a later date. The immediate work is in terms of classification and, hopefully, retaining the area that we currently have.

Charlie McConalogue (Donegal, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I have one final question on that. There are three categories within the standard ANC payment. Then there are the islands. What is the capacity for bands within any new system? Would it be a flat-rate payment or is there capacity for bands-----

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Under the revised arrangement, there is provision to retain that stepped approach for payment.

Charlie McConalogue (Donegal, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Is there flexibility whereby there could be more bands or would it have to stick to the existing three tiers?

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

My understanding is that it would be the three different tiers as they currently apply.

Charlie McConalogue (Donegal, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Would the Minister have the discretion to vary the payments within those three tiers-----

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

That discretion was availed of in recent changes introduced, by means of which the island payments were significantly increased.

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

I call Deputy Cahill for a brief comment.

Jackie Cahill (Tipperary, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I fully accept the Minister's comment to the effect that retention of the areas currently included is his main priority. However, there are significant areas, particularly on the Border, that would feel very hard done by in the context of previous classifications. It cannot be carte blanche, namely, that one is in or one is out. I can quote several examples of areas that would feel very unjustifiably treated. The criteria the last time kept them out. It was not based on soil quality last time around. They were kept out perhaps due to population density or economic reasons, such as a large number of dairy herds in a particular townland. Those are not the criteria this time around. Some areas that were excluded the last time will feel that the criteria being used on this occasion will allow their inclusion.

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

As I said, that process is under way. They will obviously be included if they meet the biophysical criteria.

Charlie McConalogue (Donegal, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I just wish to make a point about the whole concept behind ANC, which is that it is a payment for farming land depending on how difficult that land is to farm. It is particularly dependent on the natural constraint relating to the relevant land. It is crucial that there is fairness brought to the system as part of this review in order that for those farming poor land, hill land and much poorer land, the categorisation and the bands ensure that there will be payments proportionate to the constraint on the land being farmed. The biophysical considerations are coming into it, but I think the banding system and payment levels are crucial. There must be a full reassessment and review of that. There must be some fairness brought into the system with regard to the final outcome.

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

No doubt the Deputy has a particular view on that.

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

We move on to programme C, policy and strategy programme.

Michael D'Arcy (Wexford, Fine Gael)
Link to this: Individually | In context | Oireachtas source

The Minister said in his speech there would be an increase of €1.6 million for Bord Bia. The actual document states that it is €2 million. We are in the territory of a 6% increase, which is not sufficient for Bord Bia's needs. Without the potential of food tariffs being applied in 2019, a standard increase might be fair enough. However, with the value of our exports to the UK at almost €5 billion and almost €4 billion in imports, a €2 million increase for Bord Bia is very low. With a €2 million increase there will not be an aggressive campaign as required to bring our food products to other markets. That €2 million will not cut much mustard internationally especially when 40% or 50% of our product goes to the UK. There is a lack of ambition there. I do not want to waste money but the food sector will be hardest hit by Brexit. If the Minister had proposed €4 million or €6 million, I do not believe the committee would have told him he was overspending, but €2 million looks very small. I think he has lowballed it. Whoever put the figures together does not seem to realise the impact Brexit could have on the food sector.

Jackie Cahill (Tipperary, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Following on from what Deputy D'Arcy has said, I refer to an issue I raised previously. We were told earlier that Bord Bia is to take on 20 additional staff. Are they to be paid out of this additional €2 million? With the challenges the beef and horticultural sectors are facing, this kind of an increase for Bord Bia is inadequate. I appreciate that some new markets for live exports opened up in the latter part of 2016, but we need to export far more animals than at present if we are to avoid a very serious situation. That is only dealing with the increase in cattle numbers we have and does not address the consequence of potential reduced access to the British market which would be a very steep hill to climb. If the €2 million is to pay for the additional 20 staff, it leaves very little money for new initiatives. Even without Brexit we need to develop new markets. We have heard a lot about the Egypt market reopening. We need a significant number of live cattle exports in 2017 if we are to avoid a serious situation at the end of this year.

I cannot understand why organic inspections are not included in the Bord Bia lamb quality-assurance inspections. Dairy farmers are now incorporated into the beef-inspection scheme. A dairy farmer with a beef operation will have both inspections on the one day. I do not understand why organic farmers are not included along with the quality-assurance inspection. It would make common sense. Obviously for farmers who are not organic they could just delete the item from the form. Organic farmers appeared before the committee and there were questions over whom they represented. Leaving that aside, we have an organic section in farming production. Bringing it under the auspices of the quality assurance would streamline it. I do not understand why organic inspections are not included in quality-assurance inspections.

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I appreciate the concerns over having adequate resources to meet the challenge of Brexit and all of the other challenges of being an island that exports 90% of what it produces. It is not true to say it is €1.6 million as Deputy D'Arcy said. After 24 June 2016 we put €1.6 million extra into Bord Bia for the remainder of 2016. On top of that figure we have put an additional €2 million into it for 2017. When the original 2016 figure is compared with the 2017 figure, there is an increase of €3.6 million.

We must also bear in mind that funding available for Bord Bia for 2017 from the European Union will be €1.9 million, which is double what it was in 2016. With that €900,000 there is about €4.5 million extra. I anticipate that includes the additional staff that have been approved. Feet on the street in new markets is the only way that we will meet the challenges we face. In the relatively short period of time that I have been in this role, I have come to recognise that Bord Bia does an exceptional job. I met Bord Bia staff only last week in Germany but previously across north Africa, the Middle East and South East Asia.

We could throw endless resources at this thing. Through the embassy network now having responsibility for trade, the Bord Bia office now often operates out of the same campus where those offices are located, we get a much more significant punch than we would if they were stand-alone. Most recently we have opened offices in Singapore and Warsaw. Bord Bia is putting in considerable effort into its endeavours in the United Kingdom. We are certainly not walking away from that market.

I have made a public commitment that in respect of the roll-out of the challenge and the scale of it, we can revisit this. It will be one of the most important things we will be doing in coming years. When we consider the €1.6 million, €2 million and €900,000 cumulatively, it has significantly increased. We have an open mind about it.

Michael D'Arcy (Wexford, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Five or six months ago the expectation was that the worst-case scenario would be World Trade Organization tariffs, if the EU and UK did not come to a position 24 months after Brexit is triggered at the end of the month. Prior to the November speech by the British Prime Minister, Mrs. May, nobody expected the UK to leave the customs Union and the Single Market. That was certainly unexpected. I have been making the point for some time - it was based on bitter experience following the banking inquiry - that nobody did the analysis for the worst-case scenario. The beef sector is likely to be the worst-case scenario because of World Trade Organization tariffs on quantities of beef. I have made the point on numerous occasions - not to the Minister or his officials - but to the IFA at the launch of its Brexit report and to the Secretary General of the Department of Finance. There has been no analysis of the worst case scenario of a trade war, which now cannot be written out of the conversation. It was not even in the conversation five or six months ago and no analysis has been done.

Bord Bia is talking about spending an extra €4 million or €5 million on the beef sector, which is worth €4.5 billion. The potential exists for a catastrophe in the beef sector in two years time. I do not think a longitudinal worst-case scenario analysis is being done by anybody. Nobody wants to go there. Nobody wants to get into a trade war, but that possibility cannot be discounted.

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I should have alluded to our multifaceted response to these issues in response to Deputy Cahill's questions. The Department is putting a great deal of effort into working with Bord Bia to seek new markets, for example in the live export area. The number of cattle now leaving the country as live exports is greater than ever before.

Jackie Cahill (Tipperary, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

We have more of them to go too.

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I appreciate that. We have had more cattle before than we have now. The effort is going into the area where it should be going. While I take Deputy D'Arcy's point about Brexit in its broadest sense, it is really wide of the mark to say we have not prepared for or looked at all the scenarios.

Michael D'Arcy (Wexford, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Has the possibility of a trade war been analysed?

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Yes. If the Deputy is talking about WTO tariffs on beef at-----

Michael D'Arcy (Wexford, Fine Gael)
Link to this: Individually | In context | Oireachtas source

No, I am talking about a trade war. I am not talking about WTO tariffs.

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Who would be at war with whom?

Michael D'Arcy (Wexford, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I suggest the potential exists for a trade war to erupt between the EU and Britain. I am not talking about WTO tariffs.

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

WTO talks happen when there is no agreement.

Michael D'Arcy (Wexford, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Correct, but there is a scenario in which there might be a trade war beyond tariffs.

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I advise the Deputy not to lose sight of the fact that the UK is a food importer. The UK cannot feed itself. Ireland is the closest market to the UK. We have modelled every possible scenario in the context of Brexit. We send more than 50% of our beef exports, or 253,000 tonnes, to the UK. The WTO can impose tariffs of 50% on beef. I suspect that the events of recent days have damaged that possibility. If the UK decides in a post-Brexit scenario that it wishes to import beef from Mercosur countries, that might significantly displace much of our beef. If there is a level playing pitch in areas like animal welfare standards, veterinary certification and veterinary standards, we can compete with most countries. However, we cannot compete with beef from South America if the systems of production and the animal welfare standards are different.

Michael D'Arcy (Wexford, Fine Gael)
Link to this: Individually | In context | Oireachtas source

That is not what I am asking about.

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

We are looking at all of these scenarios. Bord Bia is deeply engaged with purchasers of Irish beef in the UK market. I have met the chief executives of Tesco and Sainsbury's and I have travelled to the UK to meet the Secretary of State, Andrea Leadsom. When I expressed to Ms Leadsom our concern about how we would be adversely affected if the UK were to conduct its own trade deals after Brexit, she instinctively made the point that UK farmers and consumers have raised the same issues with her. In the negotiated outcome, we would like the UK to be somewhat constrained in its capacity to do trade deals with third countries in the agrifood sector. At the very least, it needs to be ensured in any such deals that producers from third countries are held to the same standards and certification obligations as EU producers. We believe we could face any competition in such circumstances. All of these things are the subject of negotiation. Part of our strategy involves engaging in the UK to cement our relationships with purchasers there and to try to navigate this difficult situation. For historical, geographical and cultural reasons, it is entirely logical that the UK market is our most important market. No other market pays a higher premium for beef. It would be a foolish strategy to walk away from it. Part of our strategy involves resourcing Bord Bia to look for other markets for live exports and processed beef exports. It would be critical in the context of a trade war like that alluded to by the Deputy for us to have other export opportunities.

Michael D'Arcy (Wexford, Fine Gael)
Link to this: Individually | In context | Oireachtas source

The Minister has said that data on a potential trade war is available. Can he make the worst-case scenario data from the Department, Bord Bia and other relevant parties available? In the event of a trade war, our products would be prevented from going in at all. That is the worst-case scenario. I have not seen any research on that. To my knowledge, nobody has done such research. If it has been done, I would like it to be made available because of the potential catastrophe if it is handled badly. To date, the UK and the EU have handled all aspects of the Brexit issue badly.

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

Are there any other questions?

Charlie McConalogue (Donegal, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I would like to ask a question about Bord Bia. Earlier in this meeting, the Minister and I contested a point regarding the targets and the Government commitments for the beef data and genomics programme. When the Minister, Deputy Coveney, issued a press statement announcing the establishment of the programme in May 2015, he committed to provide €300 million to assist approximately 35,000 beef farmers. When I mentioned that figure earlier, the Minister said it was "well wide of the mark" and alluded to "myths being perpetuated".

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I said I had never committed to-----

Charlie McConalogue (Donegal, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

That is where it came from.

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I did not commit to-----

Charlie McConalogue (Donegal, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I did not get the figures wrong.

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I have always said at this committee that I am open to reopening the scheme. I have never mentioned a figure.

Charlie McConalogue (Donegal, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I want the Minister to know where I was coming from when I mentioned the figure in question. The feedback from industry representatives and Bord Bia officials who attended a meeting of this committee was that additional resources are needed because the current level of resources is insufficient. I agree with the Minister that the quality people who work in this area carry out their role well within the resources they have. As the Minister indicated, this is a crucial issue in the context of meeting the challenge of Brexit and trying to maintain existing markets and open new ones. The feedback suggests there is a widespread feeling that the current allocation of 20 - it was 16 last year, with four more to be hired - is simply insufficient to meet the challenging tasks that exist, particularly the challenge of trying to diversify while opening new markets and reopening markets which would have been available to us in the past. I accept the Minister's point that we do not have limitless funds and we need to make the most of what we have. I put it to him that there is a unanimous feeling that additional funding is needed in this area. Will the Minister give us a breakdown of the operations of the 20 people who have been hired or are being hired to carry out this important role? What divisions are they going to? I know Bord Bia is responsible for how it deploys its staff, but it is important to get a handle on where they are going. When I heard that an additional €2 million was being provided this year, my understanding was that approximately half of that money would be allocated to the beef side of things in Bord Bia. I suggest that would be a very small figure, particularly in the context of big challenges like trying to develop new beef markets.

I would also like to ask the Minister about the market access personnel in the Department of Agriculture, Food and the Marine. I know it was previously proposed that a specific market access unit with dedicated staff should be developed in the Department. I know some staff across a couple of sections of the Department spend a lot of time on market access issues. Can the Minister comment on the proposal I have mentioned? Is he open to it? Does he think it would enhance the current structures in the Department? I would also like to ask about the Brexit unit that has been established by the Minister. I understand from the Minister's replies to parliamentary questions that there are three members of staff in the unit at the moment. I understand the point made by the Minister when we debated this matter in the Dáil last week that this matter is occupying the minds of staff across all sections of the Department.

On the Brexit unit, which has been established with three people, will the Minister elaborate on the role of the unit and the reason that only three people have been assigned to it? It seems a very low number, given the enormity of the task of co-ordinating and researching the impact of Brexit on the various components of the agricultural sector.

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

In response to the Deputy's question on Bord Bia, if one takes the EU funds of €1.6 million and the €2 million extra, the cumulative figure is €4.5 million above the 2016 provisional figures. It is significant. I have no doubt that if we had more money Bord Bia could spend it. However, in terms of a start on the challenge we face, that is good. The staff of Bord Bia do a tremendous job.

I engage with the industry in all its manifestations, both inside and outside the farm gate, farm organisations and the representative bodies of the processing sector. I have not had any single one of them say what the Deputy has said about Bord Bia. The interesting thing, as I have said to Deputy McConalogue before, I have done sectoral dialogues on Brexit with the dairy, beef, sheep, pork, poultry, grain, forestry, prepared consumer foods, fishery sectors and continue to dialogue with all of them. I have been on trade missions with them and I have not heard what the Deputy has said.

I have made the point that Brexit is an enormous challenge. As for hanging one's coat on the issue that the Brexit team comprises three people, I repeat there are 3,000 staff in my Department and every one of them is a critical player in the context of Brexit. Anybody who goes to an international meeting, anybody who is involved in the agencies such as Bord Bia or BIM is a player in terms of Brexit. When we go to market - and part of the strategy is to diversify, part is to secure the foothold we have in existing markets - anybody who is involved in quality assurance inspection or in ensuring that the produce we take to market, be they farmers or Department officials, is critical to the Brexit effort. To make the flippant point that the Brexit unit is just three people is to miss the point about the scale of the challenge and the scale of the Department's response. The response of the departmental officials at all levels has been phenomenal. Their commitment has been exemplary.

The high-level Brexit unit is involved strategically in liaising with the Department of the Taoiseach, in engaging with Michel Barnier and his team and is involved in bilateral meetings in which I am involved with various ministerial colleagues across the European Union. It is a complex response of which they are at the helm in terms of strategising, looking at the implications and scoping out the scale of the problem at a high technical level.

The market access unit, although technically not the Brexit unit, plays a critical part. It is headed by an assistant secretary and is an equally important part of our strategy. The market access unit engages with countries all over the world. We trade with 180 different countries and are knocking on other doors to get into new markets for various different products. That unit engages with our ambassadorial diplomatic team, at a technical, veterinarian and peer-to-peer level in respect of ministries in other countries. A phenomenal amount of work goes on in the market access unit.

These are challenging times and there is a provision in the budget for the Department to take on 200 additional staff across the Department. They will be deployed into strategic areas that will be identified as needing additional resources. I have no doubt that the skill set required in those areas to meet these challenges will be looked at. That is always something that is under review. It is important to point out that regardless of whether one is a Department inspector in a meat plant or a person involved in on-farm quality assurance inspections or operating in the Brexit unit or in the market access unit or anywhere in between, because the agriculture industry exports 90% of what it produces, everybody in this Department is focused on making sure that we can stand over that product. Fortunately we can. We have a great reputation and that is due to all those people, Bord Bia, Origin Green and the phenomenal effort that they put into it. We are never resting on our laurels. We are never saying we have it cracked; it is constantly under review. It is particularly under review in the context of the Brexit challenge. It has got additional resources but it is the overarching issue that informs every single thing that the Department does at this stage. I think it is through the collaborative approach, that is, the close collaboration between the agencies I have mentioned, the Department, the farm organisations, the individual farmers and the industry in all its manifestations that we will be able to meet this challenge. In my view, this challenge is unprecedented. I have gone on the record of saying there is no upside in this for the agrifood sector. We may poach a financial or an EU institution but one will not make a broker out of a beef farmer if the industry goes down. We in the Department are fighting might and main to protect the interests of the industry, to protect the markets we have in the UK, to negotiate the best possible outcome but equally are not anticipating anything in terms of those outcomes and therefore are looking at additional markets as well. It is a whole-of-Department and a whole-of-Government approach. It is not three people, it is not 20 additional staff in Bord Bia, it is all of that and a great deal more.

Jackie Cahill (Tipperary, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I have a question on the reduction in the number of places on educational courses that Teagasc provided, as there is a reduction of nearly 200 places available. My understanding is there is a waiting list for Teagasc courses and that they are over-subscribed. I would be concerned about the potential reduction of 12% to 13% in the number of places available.

Second, I asked a question about the organic inspections.

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I will come back to the Deputy on that issue as I do not have the answer but I will get an answer to his question.

In response to the Deputy's question on the Teagasc figures, there was an extraordinary bulge in 2015 because of the new young farmer and the national reserve applications. The numbers will be slightly less than that but they are approaching more manageable proportions now.

The Deputy knows that in 2015 in respect of the national reserve, there was a specific concession made to persons who were applying for these scheme. Previously one had to have the educational course completed in 2015 but the concession the Department gave, about which the European Commission was not particularly pleased, was that once a person had enrolled and had one module completed in 2015, he or she was eligible - provided he or she followed through and completed the educational qualification - to apply for the young farmer and the national reserve entitlement.

There had not been a scheme like that for several years before that. We are now having a separate scheme in 2017 but a lot of the heat was taken out by the 2015 process. The numbers are falling back and are a bit more manageable now.

Jackie Cahill (Tipperary, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Is the Minister satisfied that there will be sufficient places available with this reduction?

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Yes.

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

At next week’s meeting we will hear from the other side of the organic farmers. We had asked the Department for a review of a number of recommendations from the previous committee. We will also deal with that next week.

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Those figures would have been computed in consultation with Teagasc. They would be Teagasc figures.

Charlie McConalogue (Donegal, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Deputy Cahill spoke about Teagasc training places. Has the budget been reduced this year?

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

What is that for?

Charlie McConalogue (Donegal, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

It is for Teagasc agricultural training and education.

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

It is not a cut. It is €10.5 million which is the same as last year.

Charlie McConalogue (Donegal, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I will give an example from the north-west area. More than 500 farmers from Donegal, Sligo and Leitrim are waiting to do the part-time green cert course. There might be some duplication on that waiting list because some of them may have also applied for some of the full-time agricultural colleges. That is a massive number. The part-time green cert course takes two and a half years from commencement to completion at one day per week.

I understand that by the autumn there may be five or six new classes across the Donegal, Sligo and Leitrim area for part-time green cert courses. At an average of 30 per class that could potentially provide places for up to 180 of those. That is not confirmed yet and it is dependent on a number of staff being allocated to the north-west region from what I think is 20 people that Teagasc is hiring later this year in the training section. If the north west gets six of those it might be able to run up to six courses. That might cater for 180 people, but the waiting list is over 500. That is a massive demand of by and large young farmers awaiting those courses. Once they get on a course it takes two and a half years to completion. The Minister should look to provide additional funding to Teagasc for training. It is particularly important to provide additional staff in the north west this summer and autumn so that it can address the waiting list.

On Brexit, I take the Minister’s point on the importance of all staff. Given the enormity of the issue, I question whether it is sufficient for that unit to have only three people; the Minister believes it is. However, given what the high-level Brexit unit is being asked to do, having three people sounds like an understaffed unit. I am not saying that is the be-all and end-all, but I do not believe the numbers in that unit are sufficient to deal with the task being asked of them.

I met some representatives of the processing industry this morning who stated that Bord Bia is understaffed and needs a significant increase on what has already been provided to it. I will ask them why they do not put these points to you if they put them to me. That was the feedback as recently as this morning.

Earlier Deputy Martin Kenny touched on opening new markets, including Brazil. Where does the Minister stand on his engagement with the European Commission?

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

I would like to wrap up on this section.

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

On the latter point I have been in contact with Commissioner Andriukaitis and my departmental officials have also been in contact with the Commission on the matter. We are awaiting a response.

I do not have the regional breakdown on Teagasc. However, I know that the Department of Public Expenditure and Reform has recently given approval to Teagasc for 15 new temporary posts to deal with the educational backlog. I do not know how they will be deployed on a regional basis. In a way it is a reflection that the industry is attracting new blood and young people, which is welcome. As the Deputy knows, Teagasc is undergoing a review of its green cert and educational offering to farmers, which is appropriate. We need to keep the matter under review. The approval of additional 15 temporary posts will enable Teagasc within its budget to deal with how it allocates resources.

In acknowledging the role my Department’s Brexit unit plays, I repeat the point that every one of the 3,000 employees in the Department is critical to the Brexit effort because of our export focus. The Brexit unit, the market-access unit, anybody who is involved in quality assurance and every individual farmer, who is committed to production to the highest standards and meeting the regulatory requirements under which they operate, are all critical to our Brexit effort. We will keep the resources under review.

Regarding Bord Bia, I believe feet on the street is the most effective response. It is currently recruiting additional staff. It has had a significant increase in resources over its 2016 allocation. We will keep the matter under observation.

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

We will move onto programme D, the seafood programme.

Charlie McConalogue (Donegal, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Obviously Brexit offers a stark challenge on seafood regarding access to British waters. Are resources being allocated to help to address that? I ask the Minister to comment on the Department’s preparations for that challenge.

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

The challenge on the fisheries side is particularly acute because we compete for the resource across the European Union. Much of the competition for the fishing resource is in UK territorial waters. In the event of a hard Brexit and we are locked out of UK territorial waters, displacement of fishing effort into the remaining EU waters, particularly off our west coast, would be intense and yet quotas would not rise. So displacement and quota share are critical issues.

We catch about 40% by volume in UK territorial waters and approximately the same in value terms. In a worst case scenario, it would be a disaster for the Irish fishing industry. In the negotiations we are attempting strategically to link the fisheries sector into the wider trade negotiations. If these negotiations are conducted on a silo basis where fisheries are dealt with in a stand-alone basis, the UK would have a very strong hand. However, it requires market access to the European Union for 70% of its produce. That is not as strong a card for us to play as one might think.

In the context of the worst-case scenario to which Deputy D'Arcy alluded previously, WTO tariffs on fisheries are at such a low level that it would not have a material impact if the UK were to have access to the EU market subject to those tariffs. We are trying to create a common platform on the fisheries issue and I have engaged in numerous bilateral meetings to that end with counterparts from like-minded member states. At the December Council, we will fight to the nth degree for a single fishery for the Irish fishing industry but, at the same time, there are Brexit-related fisheries issues in respect of which Ireland and the remaining member states have a common interest. I am trying to forge an alliance of like-minded member states to take a common position with the Barnier negotiating team to protect our interests. As I said, it is 40% by volume but if one takes some of the most valuable fisheries like scallops and pelagics, we are talking about 45% and almost 60%, respectively, in value terms. They are the two biggest ones for Ireland so it would be a huge loss in terms of what we catch in UK waters in the worst-case scenario. We are strategically involved in negotiations at a political and technical level with other member states.

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

Are there any other questions on that programme?

Charlie McConalogue (Donegal, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I have a question on the review of the mackerel quota. I know that it is not directly related to the figures but I ask the Minister to update us on the status of that review. I would also make the point, in terms of the concept, that Killybegs vessels in particular have built up a mackerel quota over many years and the review has the potential to take that from them and reallocate it. Given the fact that the people who own those vessels worked hard to develop that quota and that it is particularly important to the Donegal economy, I do not believe the approach is fair. I ask the Minister to provide an update on the review. I urge him to draw a line under the matter and to leave matters as they stand in terms of the quota allocation that is in place.

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I do not propose to comment in detail on that. We have just concluded a consultation process and we received quite a number of submissions from various interested parties. Those submissions are being considered by the Department and we will make a decision on the matter in due course.

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

We will move on to appropriations-in-aid. Are there any questions?

Michael D'Arcy (Wexford, Fine Gael)
Link to this: Individually | In context | Oireachtas source

The 2016 Estimate versus the outturn shows a difference of almost €150 million. I ask the Minister to explain that.

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

This relates to a 5% retention by the Commission of rural development programme, RDP, funding. The refund to us is not something that we can anticipate in any given year. While it came through significantly higher than what we had budgeted for in 2016, next year it could be much lower. Actually, sorry, that is wrong. This refers to the 2007 to 2013 RDP and the Commission's final accounting exercise on that. Once the Commission was satisfied that everything had been dealt with properly, it refunded the equivalent of 5% to us.

Michael D'Arcy (Wexford, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Was that 5% on the entire programme?

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Yes, on the entire programme.

Michael D'Arcy (Wexford, Fine Gael)
Link to this: Individually | In context | Oireachtas source

In one year?

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Yes.

Michael D'Arcy (Wexford, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Was the Department not anticipating that the refund would be coming at some stage?

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

The Commission retains that sum until it closes out all of the schemes from an audit and inspection point of view.

Michael D'Arcy (Wexford, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Yes, but would the Department not have been anticipating that the refund would be coming at some stage? When it did not come in 2014 or 2015, did the Department not expect that it would come in 2016?

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Our anticipation was that the refund would not come until 2017 but it came in from the Commission in the final days of 2016.

Michael D'Arcy (Wexford, Fine Gael)
Link to this: Individually | In context | Oireachtas source

In terms of that 5% of the overall programme, had we paid that out previously?

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Yes.

Michael D'Arcy (Wexford, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Effectively, it is just an accounting exercise. Where did that money come from while we were waiting for it to come from the EU budget?

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

It is an accounting process. The EU, until it signs off on the various schemes, retains 5%. In closing out the 2007 to 2013 scheme, the refund was expected in 2017 but it came during the last days of 2016. To take the example of a scheme like REPS, we would have paid out the funding under that scheme. The EU would have withheld 5% and once the EU had gone through its processes, it would have refunded us for funding what we had paid out already to individual applicants. That is the same across all of the various schemes so the figure is cumulative.

Michael D'Arcy (Wexford, Fine Gael)
Link to this: Individually | In context | Oireachtas source

It is such a colossal amount that it makes the 2016 figure look grossly incorrect.

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

We had no certainty as to when the Commission would pay us. If we had put a figure into the 2016 Estimates and the refund had not come through, we would have been before the select committee with a Supplementary Estimate. It is accountancy. It is money that we had paid out to individual applicants but which the Commission only refunded to us once it has signed off on our books.

Michael D'Arcy (Wexford, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Okay.

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

Does Deputy Cahill have a question?

Jackie Cahill (Tipperary, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I have a question concerning the veterinary fund. We had a debate recently about regional laboratories. Does the Estimate for 2017 cover the costs of all of the laboratories that we have at present?

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Yes.

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

Deputy McConalogue is next.

Charlie McConalogue (Donegal, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I have a general question on tillage and the need for a crisis fund for tillage farmers, as discussed during a Private Member's debate in the Dáil. I ask the Minister for an update on that. Is there capacity in these Estimates to cater for such a fund?

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

As I said to the Deputy previously, where there is a way, there is a will. It is not an easy one to deal with in terms of being able to audit and verify something for which the Department has no records. That said, negotiations between farm organisations and my officials are ongoing in terms of the details of any scheme.

Charlie McConalogue (Donegal, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

I emphasise the importance of progressing this in light of the season that it is in it and the fact that time is moving on.

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Even in the event of a scheme being devised, it will have to take its place in the queue in terms of the payment arrangements that must be put in place.

Charlie McConalogue (Donegal, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

In terms of the background, I make the point that we are talking about a crisis fund.

Many farmers have been affected by it and are now in a difficult position. I would prefer if the process and the audit were agreed to with the farming organisations. The Minister's approach of taking one's place in the queue is unacceptable. Given the nature of the crisis and the fact that many farmers are under financial pressure, there is an onus on him to ensure payments are made promptly. A lot of time has been lost in dealing with this issue.

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

The Deputy should be under no illusion that if there is a scheme, it will be extraordinarily complex. It will involve a lot of paperwork to validate claims. It will not be an easy task.

Jackie Cahill (Tipperary, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

The volatility payment is not mentioned in the Estimates. What is a volatility payment? It will not be available next year. There was a temporary cessation scheme. Will some of the money be paid out in 2017?

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

What was the first payment the Deputy mentioned?

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

To what page number is Deputy Jackie Cahill referring?

Jackie Cahill (Tipperary, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

The line reads: "Market Volatility Payment (Dairy & Pigmeat Sector)".

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

Where is it mentioned?

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

The market volatility payment relates to the Strategic Banking Corporation of Ireland. Does the figure amount to €13.9 million?

Jackie Cahill (Tipperary, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

No; €2.6 million.

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Where is it mentioned?

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

Will the Deputy identify the relevant page?

Jackie Cahill (Tipperary, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Can everyone see the line "Guarantee (Measures fully funded by the EU)"?

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Is the Deputy referring to a programme or group?

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

To what programme is the Deputy referring?

Jackie Cahill (Tipperary, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

It is on the last page of the document that was circulated.

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

Is the Deputy referring to appropriations-in-aid?

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

We have dealt with that issue.

Jackie Cahill (Tipperary, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

There is a line on the last page which reads "Co funded receipts (measures co funded by EU)". One can see that the figures for the basic payment scheme have remained the same for 2016 and 207. Below that line there is the word "Other" and the payments column is blank. On the next line it is stated the market volatility payment was €2.6 million in 2016, but there is no-----

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

From which document is the Deputy quoting?

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

The Deputy is referring to the last page of the document on the Estimates.

Jackie Cahill (Tipperary, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Can the Minister see the line that reads "Market Volatility Payment (Dairy & Pigmeat Sector)"?

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I am advised that the item refers to the compensation scheme in 2016.

Jackie Cahill (Tipperary, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

The temporary cessation scheme.

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

No. I am advised that it represents the last payment under the 2015 market support scheme.

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

The dairy scheme.

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Yes.

Jackie Cahill (Tipperary, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Is the temporary cessation scheme that was introduced at the back end of the year listed anywhere?

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Is the Deputy referring to the current scheme?

Jackie Cahill (Tipperary, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Yes.

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

We are awaiting approval from the Commission to make payments.

Jackie Cahill (Tipperary, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Is there a reference to the scheme in the Estimates?

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

No. It is an EU-funded scheme.

Jackie Cahill (Tipperary, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

As is the basic payment scheme.

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

We do not yet have approval.

Jackie Cahill (Tipperary, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Does the Minister have a figure for the amount that will be spent?

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I am advised that the payment will be made directly from Brussels, not by my Department.

Jackie Cahill (Tipperary, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

What is wrong with including it in the Estimates? I have asked a lot of questions.

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

The debate moved well for a while.

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

The answer is the same as that on the point raised by Deputy Michael D'Arcy. It will be an appropriations-in-aid payment at the end of the year.

Jackie Cahill (Tipperary, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Will it be included in that list?

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Yes.

Jackie Cahill (Tipperary, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Does the Minister have any idea of how much money this country will receive?

Michael Creed (Cork North West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I do not yet have that figure.

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

That concludes our consideration of the Revised Estimate. On behalf of the select committee, I thank the Minister and his officials for assisting us in our consideration of it and dealing comprehensively with members' questions.