Pat Deering (Carlow-Kilkenny, Fine Gael)
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Apologies have been received from Deputy Thomas Pringle. I ask those present to ensure that all mobile phones are turned off. The meeting has been convened to consider a Supplementary Estimate for Vote 30 - Agriculture, Food and the Marine, which was referred by the Dáil to the committee on 21 November 2017 with an instruction to report back to the Dáil no later than 6 December 2017. On behalf of the committee, I welcome the Minister for Agriculture, Food and the Marine, Deputy Creed. I also welcome his departmental officials and thank them for circulating briefing papers beforehand. The Minister will make a brief address to the committee after which members who indicate they wish to speak will have an opportunity to make a brief response. We can then consider the Supplementary Estimate. Is that agreed? Agreed. I remind members that, in accordance with Standing Orders, discussion should be confined to the item constituting the Supplementary Estimate only.

I invite the Minister to make his opening statement.

Michael Creed (Cork North West, Fine Gael)
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I thank the Chairman for the opportunity to present this request for a technical Supplementary Estimate for 2017. I am seeking the committee's approval to use savings on the Department's Vote to fund other desired expenditure. As these proposed transfers and expenditure involve significant changes to the original 2017 voted allocations, it is important to seek the committee's input and approval.

This technical Supplementary Estimate will transfer savings of €9 million in certain areas of the Vote to fund the Brexit loan scheme I announced in budget 2018. In addition, I am requesting the committee's agreement to transfer €14.5 million of savings in certain areas of the Vote to the agriculture environmental schemes to ensure that there is sufficient funding available to pay 85% advance funding to all farmers who have established their eligibility. A further €4.5 million will be moved to the areas of natural constraints, ANC, scheme and €6.6 million will be transferred to Bord Bia to assist with ongoing promotional work in addressing the market challenges relating to Brexit. Finally, a further €14 million will be transferred to the World Food Programme to support its humanitarian work across the world.

The €48.6 million current funds required will be transferred from various subheads where, due to changed circumstances, savings have emerged, most notably in the context of the administrative budget pay subhead, the beef data and genomics programme, BDGP, the knowledge transfer programme, the animal welfare scheme for sheep, the European Maritime and Fisheries Fund, EMFF, seafood development programme, research, the early retirement scheme and the development of agriculture and food.

On the payroll underspend, the savings arise from a lower than estimated pay bill due to recruitment of additional replacement staff not proceeding as quickly as planned. The delay in the recruitment process will give rise to a saving of approximately €12 million in 2017 payroll allocation.

On the €8.2 million in savings in development of agriculture and food, these are primarily due to funding which had been allocated to this subhead of the Department's Vote pending the development of a programme of activities to support the food and drink sectors in addressing the market challenges relating to Brexit by Bord Bia. It is proposed to transfer this to Bord Bia under the Supplementary Estimate. Other savings are arising because there has been a lower than projected spend on lean reviews by food companies. In addition, a specialist food producer scheme which is currently in development has yet to be launched. It is now expected that this will be launched in 2018.

On the animal welfare scheme for sheep and the sum of €8 million, this scheme was launched in December 2016 and is centred on a payment of €10 per breeding ewe on foot of the flock owner undertaking two animal health-related actions. The original Vote allocation provided for full payment in respect of all ewes in the national flock. While a high percentage of sheep farmers are participating, not all potential participants choose to do so. Year 1 advance payments commenced on schedule in mid-November and some €16 million has issued to more than 20,000 farmers. Balancing payments will issue in 2018.

On the BDGP and the sum of €3 million, 23,150 farmers are currently participating in BDGP 1. The programme was reopened in 2017. However, fewer than anticipated numbers applied to participate. Some applicants were ineligible to participate while others did not comply with the mandatory requirements of BDGP 2. Ultimately, 1,550 farmers are participating in BDGP 2. The €3 million reduction in the Estimate for 2017 is attributable to the take-up and the compliance with mandatory requirements relating to BDGP 1 and 2 being less than projected. Payments in respect of BDGP 1 and 2 will commence in December to those herds who are compliant with the requirements of the schemes.

On the knowledge transfer programme and the sum of €2.8 million, the programme is designed not only to help develop the skills base of Irish farmers but also to support a number of other themes and measures in Ireland’s rural development programme. The original allocation of €25.6 million provided for 20,000 participants satisfying all scheme requirements. A saving will arise because approximately 19,000 farmers are currently enrolled in knowledge transfer groups and a minority of these have not complied with all the conditions required to receive full payments. Payments under the knowledge transfer programme commenced at the end of October and, to date, more than 13,700 farmer payments have issued.

I made €43.6 million available in 2017 for the EMFF operational programme in the budgets of my Department and its agencies. However, there are some savings as schemes roll out. There will be a saving of €4.5 million in respect of the current expenditure budget of Bord Iascaigh Mhara, BIM, primarily regarding the sustainable fisheries scheme and the skills and training measure. There will also be savings of €2.5 million on other EMFF budgets managed by my Department, mainly on a marine development team and marine spatial planning project. These savings will not affect the overall budget available for the seafood sector under the EMFF because these investments will occur over the latter years of the programme.

Other savings are in the early retirement scheme, where participants receiving the State pension reduces the early retirement scheme spend by a corresponding amount, and research grants, where, due to a later than scheduled launch of the 2017 research call, €7 million of expenditure will not arise until 2018.

Overall, these current expenditure savings amount to €48.6 million and, with the select committee's approval, they will be transferred to fund the following measures. A total of €9 million of the savings identified will be used to contribute to the €23 million Brexit loan scheme I announced on budget day. This scheme will be operated in partnership with the Department of Business, Enterprise and Innovation. The aim behind it is to make up to €300 million of working capital finance available to SMEs and mid-cap businesses that have up to 499 employees. Given their unique exposure to the UK market, my Department’s funding ensures that at least 40% of the fund will be available to food businesses. The finance will be easier to access, will be more competitively priced - with a proposed interest rate of 4% - and will be offered at more favourable terms than current offerings. This will give businesses impacted upon by Brexit time and space to adapt and grow into the future.

The new scheme will be delivered by the Strategic Banking Corporation of Ireland, SBCI, through commercial lenders. SBCI issued an open call on 21 November inviting lending institutions to participate. The scheme is expected to be in place in March 2018 and it is anticipated that it will remain open until March 2020. Supporting lower-cost, flexible finance is a key response to Brexit. The very successful agriculture cashflow loan scheme has provided a template for such schemes, including this one for businesses. I also announced in the budget that I have secured funding of €25 million for my Department to facilitate the development of new Brexit response loan schemes during 2018 for farmers, fishermen and food businesses.

On the GLAS scheme and the sum of €14.5 million, there are now in excess of 50,000 farmers approved into the GLAS scheme over the three tranches, that is, GLAS 1, 2 and 3. The environmental benefits to date are evident. In September, the European Commission agreed to my request that provision be made for an increase to the advance payments for Pillar 2 rural development schemes, with the rate increased up to 85% under those schemes. GLAS advance payments will begin this week at the higher advance rate of 85%. The additional €14.5 million sought in this Supplementary Estimate will facilitate this. I urge all participants to ensure that they submit all outstanding documentation so that they can avail of this advance payment in 2017.

The sum of €6 million for Bord Bia will ensure that it can fund a programme of additional activities to support the food and drink sectors in addressing the market challenges relating to Brexit. The funding, which is additional to the substantial funding already provided to Bord Bia for 2017, includes further market promotion and support activities internationally, in the UK and in other markets within the EU.

The programme of activities draws on analysis of data from the Bord Bia Brexit barometer exercise which was completed by 139 food, drink and horticulture companies and follows my Department's request to Bord Bia to undertake a major market prioritisation exercise to identify the best prospects for sustainable growth in individual sectors.

Areas of natural constraint, ANC, require €4.5 million. The significant level of financial support delivered through the ANC scheme over the years recognises the issues which pose a significant threat to the future viability of these farming communities. In budget 2018, I was pleased to fulfil the programme for Government commitment to allocate an additional €25 million to the scheme. Almost €200 million has been paid out under the ANC scheme this year and this extra €4.5 million allocation will ensure the maximum number of eligible participants is paid this year.

The World Food Programme requires €14 million. Including the advance payment of €10 million that I am requesting here, Ireland will have contributed €60 million to the World Food Programme for the years 2016 to 2018. The additional €10 million provided for the World Food Programme in this Supplementary Estimate represents an advance payment of next year's commitment under Ireland's strategic partnership agreement with the World Food Programme. This earlier disbursement is at the request of the World Food Programme's executive director, who has written to inform me that this funding will significantly contribute to enhance the World Food Programme's capability to plan its interventions and better address the several growing humanitarian crises around the world. I also propose to provide an additional €4 million to the World Food Programme which will contribute to its lifesaving work around the world, including helping 4.3 million people who are facing crisis or emergency levels of food insecurity in the Kasai region of the Democratic Republic of the Congo. They include 350,000 children in the region who are at risk of severe acute malnutrition. This funding, while generally targeted at the World Food Programme's emergency and protracted relief operations, is provided on a non-earmarked basis which gives the World Food Programme the flexibility to plan and target this funding in the most strategic, efficient and effective manner and provide lifesaving assistance for people living on the front lines of hunger, conflict and climate change. Ireland will become a member of the World Food Programme's executive board in February 2018.

This is a technical Supplementary Estimate. The savings I have outlined will be used to fund the World Food Programme, the Brexit loan scheme, green low-carbon agri-environment scheme, GLAS, and ANC payments, and Bord Bia and I earnestly recommend this Supplementary Estimate to the committee for its support. I am happy to respond to members' questions.

Jackie Cahill (Tipperary, Fianna Fail)
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On the €4.5 million for ANC, I would have thought €200 million was adequate to cover applicants. Will the Minister clarify why €4.5 million is needed for the ANC scheme? I welcome the extra money for Bord Bia because with the challenges we are facing with Brexit, which we do not have to elaborate on here, Bord Bia needs all the funding it can get to withstand the market challenges it would face in a hard Brexit. We had farmers who were aggrieved that they did not qualify for the loan scheme the last time. Will it be at the same interest rate as the last time? Will people who failed to qualify get priority for this extra €25 million?

It is charitable for a country such as ours to provide €14 million to the World Food Programme but Fianna Fáil raised a Topical Issue matter last week which highlighted the fodder crisis in the west of Ireland and the pressure that will be there in the spring of 2018. This was an ideal opportunity for the Minister to put aside money for aid for those farmers and I am disappointed that there is no provision for funding for that impending crisis. There will be a severe further shortage in the west. A number of funding sources are available and I would be disappointed if one of those was not used to address this crisis. Eight of us spoke on it last week in a Topical Issue debate in the Dáil and that is the one significant disappointment I have with this reallocation of funds and it is a serious missed opportunity. I welcome the money for Bord Bia, which is sensible, but I would like clarification on the €25 million for ANC. Will that be at the same interest rate and will farmers who failed last time around get priority?

Michael Creed (Cork North West, Fine Gael)
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Each year, the vast majority of participants in the ANC scheme are paid in the calendar year but some cannot establish eligibility until the end of the year so payment is delayed until the following year. Some €9 million of the payments that have issued to date in the 2017 budget was used to pay successful applicants who established their entitlement from 2016 so there is a roll-over. The €4.5 that is being provided for now is to pay people who have carried over liability from a previous year and established their entitlement at a later stage. There are stocking density requirements, retention periods and such that have to be met for ANC. Some people establish their entitlements at a later stage. Last year, for people who established their eligibility for the 2016 payment in 2017, there was a provision of €9 million, and this year the requirement is for €4.5 million in roll-over.

No decisions have been made about the loan scheme and interest rate yet. A decision was made on the scheme that is available for small and medium enterprises, SMEs, which will be at a 4% interest rate. The variables that will decide the size of the loan fund will include the terminal loan and the interest rate that is charged. We will be trying to draw on the lessons of the last scheme for the loan scheme for fishermen and farmers next year. Is there something to be gained from pitching the interest rate at a different level that will encourage the banks to compete as well? A lesson that could be learned from the last scheme was that, at the interest rate of 2.95%, banks just did not compete. Outside of the pillar banks that were used by the Strategic Banking Corporation of Ireland, SBCI, was there an opportunity if it had been pitched slightly higher to draw in more competition from other sectors? There is a suggestion that, at that rate of interest, other banks outside of those involved in administering it would not compete. All those decisions on the interest rate have yet to be made.

I welcome the Deputy's comments on Bord Bia. From my own engagement with it, it is putting its time to good use, seeking out new market opportunities, working with companies and so on.

On the fodder crisis, as I discussed in Dáil, I have asked the Department's agents on the ground to assess the situation which is a fundamental exercise to carry out before we do anything else. If we were to do something on foot of that, I have every confidence that funding would be available but we have to gather the information and as I have said previously, Teagasc is in the field to do that assessment. We will have feedback from that in due course and we will consider the options available to the Department then. I am satisfied that, should the need arise from its analysis of the situation on the ground, we will be in a position to respond.

Pat Deering (Carlow-Kilkenny, Fine Gael)
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Is there a timeline for the introduction or roll-out of the new scheme apart from the industry one? Is there a timeline for farmers waiting for the follow-on from last year's €25 million extra?

Michael Creed (Cork North West, Fine Gael)
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It is likely to be in the second quarter of 2018. There is a sequential process and we are trying to get the industry scheme up and running. I would say it is likely to be the second quarter of 2018.

Pat Deering (Carlow-Kilkenny, Fine Gael)
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I am going off-topic to a certain extent. Is it possible in that scheme to reinvent a certain amount of funding for a particular sector?

Michael Creed (Cork North West, Fine Gael)
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It probably should be. We will have to reflect on the best use of the funding. Deputy Cahill raised an interesting point about those who did not get funding the last time around. Is there a significant cohort in any particular sector that was refused? Was it due to a credit history issue? What were the reasons? We will evaluate the strengths and weaknesses of the last scheme to see if we can learn from it. Bear in mind that that was the maiden voyage for subsidised loan schemes.

Broadly speaking it is recognised as being a significant success. We have lessons to learn from it in respect of what the interest rate might be, should the conditions of the loan be short term or long term, and what sectors should be covered. We will take all these issues into account.

Marcella Corcoran Kennedy (Offaly, Fine Gael)
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I thank the Minister. I am happy to support the Supplementary Estimate. I have some questions. I welcome the fact that the specialist food producer scheme will be launched in 2018. Will the Minister clarify what type of producer will be targeted in terms of applying for that scheme? With regard to the animal welfare scheme for sheep, why are all the potential participants not availing of it? The Minister outlined that there could have been other applicants.

Michael Creed (Cork North West, Fine Gael)
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To which scheme is the Deputy referring?

Marcella Corcoran Kennedy (Offaly, Fine Gael)
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The animal welfare scheme. Do we know why all the potential participants did not apply?

Michael Creed (Cork North West, Fine Gael)
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Is that the sheep scheme?

Marcella Corcoran Kennedy (Offaly, Fine Gael)
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Yes. The welfare scheme for sheep. I also want to refer to the World Food Programme and I welcome Ireland's participation in that. We do not want to lose perspective. There are people whose lives are threatened by hunger, conflict and climate change. The Minister said that Ireland will become a member of the executive board next year. Will the Minister represent Ireland on the board or do we know yet?

Michael Creed (Cork North West, Fine Gael)
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I expect that will be a nominee of the-----

Marcella Corcoran Kennedy (Offaly, Fine Gael)
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It will be of the board. I welcome it anyway.

Pat Deering (Carlow-Kilkenny, Fine Gael)
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Would the Minister like to address those questions before we move on?

Michael Creed (Cork North West, Fine Gael)
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I welcome the Deputy's comments on the World Food Programme. It keeps a degree of context on the scale of challenges that are being faced. It is one challenge to which Ireland is glad to respond. It is part of a three-year cycle of commitments we have made to the World Food Programme.

With regard to the specialist food producer scheme, we are focusing on the artisan food sector. The scheme has yet to be designed and that is why the savings are currently there. We recognise that the artisan food sector is part of the colour of Ireland's food offering and tourism product. There is great interest now in provenance and the specialist food sector has a great story to tell. The sector is also putting its foot in the export market but it is substantially for the domestic consumer. It is quite a significant sector and the scheme is primarily geared towards the artisan food sector.

On the issue of the sheep welfare scheme applicants, a simple calculation was done. On the basis of there being 2.5 million ewes in the State the scheme was estimated to cost €25 million. For one reason or another, despite the best efforts of the Department to advertise the availability of the scheme, and the despite the fact that the scheme was widely recognised as simple to avail of, not all sheep farmers who were eligible for the scheme applied for it. That is a disappointment. The scheme will reopen next year and will have a provision for new applicants. Maybe word of mouth might see the uptake increase. The saving is there because it was demand led. We budgeted for the maximum, with everybody participating. We have made an 85% payment on it. This leaves us with 85% of the number of applicants. Having budgeted for €25 million the balancing payment will issue in 2018.

Charlie McConalogue (Donegal, Fianna Fail)
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On the figure for the underspend for last year for the Department, I cannot recall exactly but I believe the leftover at the end of the year was to the tune of €70 million. Will the Minister indicate what that figure was at the year end and what was done with those funds? Were they left in the Department? Were they carried over?

I am aware that the Minister is moving €48 million today from a certain number of funds and destinations to others. Does the Minister expect an underspend in the Department at the end of the year aside from this? I do not see any reference to TAMS in today's figures but TAMS certainly seems to be underspent this year. Does the Minister have any data on that?

Deputy Cahill made reference to the €6.5 million allocation. It is very welcome and necessary and is something we pushed for over a period of time. Is it going to be built into the base fund going forward, or is the €6.5 million a once off?

The Minister is transferring €8 million from the sheep welfare scheme into other programmes. There was a very sensible suggestion put forward relating to hill sheep - an additional €5 given on hill sheep - especially given the pressure the sector is under with margins being so low. I thought this was a worthy suggestion. Has the Minister considered this proposal? Perhaps he will clarify why he is not going down that route.

The Minister proposes to move additional funds into GLAS to bring it up to the 85% forward payment. There were significant issues and difficulties last year in relation to GLAS but the Minister is moving €14.5 million into it. Given that the payments are due to start issuing next week, as the Minister indicated in his opening statement, how confident does he feel that the difficulties experienced last year will not be repeated this year? With the commonage management plans, up to 9,000 applicants, or 20%, potentially have commonage. An issue is brewing where payments may be delayed to those who have not been able to get their commonage management plans completed, which is the vast majority. I honestly believe that a way should be found to pay them in advance pending the plans being completed. They should not have to wait. There were delays in the Department also in getting the system up and running and in making sure it was all in order. It is important farmers are not left to feel the financial pain as a result of that.

I am aware that it is slightly off-topic but will the Minister comment on the areas that were burned? Those farmers' payments are delayed. I want to draw the Minister's attention to the hill burning that occurred earlier in 2017 with gorse burning. Hills and commonages in particular were burned. As a result farmers' single farm payments are delayed because their areas are declared ineligible. It is a real issue for those involved. It is tricky and messy and we need to find a resolution. There are many genuine cases where things happen which are outside people's control. While they may have had nothing to do with it, they had their hill burned and are now finding difficulties with their payment.

Deputy Cahill made reference to the fodder scheme. I echo his comments in that regard. The Minister has said that he will look at the scheme in due course. Perhaps the Minister will define what he means by "in due course". Given the fact that the issue is recognised, would it not be appropriate to put a small fund in place sufficient to provide assistance to these farmers? This would mean that where the Teagasc assessment identifies farmers in difficulty early engagement and assistance would be given. This is especially relevant in the provision of concentrates. By providing some concentrates, or funding towards concentrates, at an early stage it can take the pressure off, increasing prices for roughage fodder.

Michael Creed (Cork North West, Fine Gael)
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I thank Deputy McConalogue for his questions. With regard to the underspend, it is important to put it in the context of the Department's overall budget of €2.5 billion. The underspend is less than 2%.

In the context of trying to manage departmental expenditure of this scale, it is quite a fine act to bring in the expenditure as close as that. The fact that 70% of the Department's expenditure is concentrated in the last quarter of the year makes the management of that expenditure quite a challenge.

The issue of GLAS payments has been mentioned. I am advised that our systems will be fit for purpose when we hit the "pay" button later this week. Obviously, certain issues are outside the control of the Department. Last year's issues are well documented. We are hoping against hope that all of the thousands of outstanding nutrient management plans will come in to enable us to pay all farmers for whom that is the issue. A completed commonage management plan is no longer required. My understanding is that as long as the adviser has commenced the uploading of the plan, and this is registered with the Department's online system, that should be sufficient to clear the way for payment. The advice we received during our engagement with planners was that they started the process of compiling commonage management plans a considerable time ago. All that remains is for them to engage with the Department's online system to upload those plans. When we have received evidence of such engagement, the commonage management plans will not be an impediment to the releasing of payments. We are on target to pay the maximum possible number of people the 85% advance on the basis that the planners have started commencing the nutrient management and commonage management plans. Approximately 3,300 nutrient management plans are still outstanding. They are coming in at a good rate. We will hit the "pay" button this week. We will do another payment next week. As they come in, we will be able to approve them for payment. The additional funding for Bord Bia is a once-off payment.

The sheep welfare scheme is designed and approved by the Commission on the basis of costs incurred and income foregone. I appreciate the difficulties that are being experienced in the hill sheep sector. If we wanted to top up the payment, we would need to have incurred an expenditure of an equivalent amount to the top-up amount. This would involve going back to the Commission. If one looks at the simple mathematics of it, one will see that it involved €10 for 2.5 million ewes. We did not get 2.5 million ewes. We will open the scheme again if more people want to participate in it. It is not open to us to make the payment for which the Deputy is calling.

There is not much I can add in respect of the fodder issue. I think it is appropriate to ask. If we did this in reverse - if we committed public funds without the appropriate input - we would be rightly questioned about that in the Oireachtas and by other public expenditure watchdogs. We have to make sure everything we do is based on an analysis of the situation. That is what Teagasc is currently doing.

I am aware that burnt land is an issue. I understand that a couple of hundred farmers, or maybe fewer, are involved. Deputies will recall that in the first half of this year, an outcry followed the media coverage of hill burning that was taking place outside the timelines for burning. I suppose this is a follow-through on it. The Department deals with these files on a case-by-case basis. It assesses the evidence available to it in each case. Landowners are entitled to exhaust an appeals process. Nobody wants to see a bona fide victim of unauthorised burning by somebody else having his or her basic payment reduced for that reason. Equally, we do not want to see a wanton disregard for the terms and conditions of the scheme. The number of people affected has been distilled down from a far larger number of land owners to a relatively small cohort of people who are entitled to and should avail of the appeals process that is open to them. I hope we reach a point where everybody gets a fair hearing in respect of what has happened on his or her individual holdings. The Department's eligible land is also subject to audit by EU auditors in respect of this issue. We have to be able to stand over our systems so that we do not end up costing the State money as a consequence of non-compliance with land eligibility issues. It is a question of trying to find an appropriate balance. The scale of these problems is relatively small. Obviously, it is a blow for any individual farmer to receive a letter like this. At the time, these fires attracted considerable adverse publicity because they were significantly outside the time permitted for burning and were of a scale that led to many difficulties. The Department was obliged to respond. Farmers should exhaust the process that exists in order to ascertain what the outcome will be at the end of the day.

Jackie Cahill (Tipperary, Fianna Fail)
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The Minister did not answer the question I asked about TAMS. It was not mentioned in the budget. Is the spending on target? People have complained to me that approvals are coming very slowly at the moment. The Minister has not mentioned whether expenditure on TAMS is in deficit. Perhaps there has been an overspend. TAMS has not been mentioned.

Michael Creed (Cork North West, Fine Gael)
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Today, we are dealing with current expenditure rather than capital expenditure like TAMS. There is no doubt we have a challenge with TAMS. There is no issue on the Department's side with TAMS payments. The issue relates to delays in the submission of claims data. We are issuing approvals for farmers in respect of the tranche 8 of TAMS, which is the latest tranche. The provision we have made on the capital side in the current year is more than the amount that will be actually drawn down on the capital side. We have a capacity to carry more than €24 million in capital from one year to the next. We have issued approvals, but some farmers have not applied for one reason or another. They might not apply for good reasons; for example, they might not be in a financial position to carry out the works at a given time. Since tranche 6 or tranche 7, we have been making the approvals subject to timelines. There is a 12-month approval for buildings and a six-month approval for plants. We have done this to improve our capacity to manage the cashflow in the Department. In that context, there is provision for applicants to reapply when the timeline is exhausted or to apply for an extension of the works that have commenced but not concluded.

Charlie McConalogue (Donegal, Fianna Fail)
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I ask the Minister to elaborate on the commonage management plans. If I understood him correctly, he indicated that the plans will not have to be uploaded and completed in full and suggested that if a planner has engaged with the online system in some way, it will be possible for the payment to be processed. I ask him to let us know how much engagement is required to satisfy what is needed for payments to be made.

I acknowledge the diligence of the staff of the Department of Agriculture, Food and the Marine. Like many other members of this committee, I submit many queries. I want to take this opportunity to acknowledge the work of the officials. We can have disputes at times, but I acknowledge that the staff are certainly responsive and do their best to engage with and respond to the issues that are raised. I thank them.

Jackie Cahill (Tipperary, Fianna Fail)
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I would like to be associated with those remarks.

Michael Creed (Cork North West, Fine Gael)
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I am advised that approximately half of the commonage management plans have been submitted to date. Payments will issue in these cases and in all other cases

as commonage management plans are commenced on the system. My understanding, which is subject to correction, is that this process can be commenced but not completed. In some cases, there might be a degree of work to be done to complete the plan.

However, once a farmer engages, he or she leaves an electronic thumbprint, I presume, and there is some measurement of the advisor on the system that is sufficient to clear those farmers for payment. The fact is that it has been out there so long. We do not require full completion. As long as farmers have engaged with the system and put something up, they will be cleared for payment. That is not an unreasonable compromise in the circumstances.

We hope that the outstanding nutrient management plans and commonage management plans will arrive in sufficient numbers to enable us to pay practically all applicants.

Willie Penrose (Longford-Westmeath, Labour)
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I thank the Minister and his officials. I have always found the officials most helpful - I wish to recognise that. Indeed, often I go off-script to ask them about various things. I am writing something at the moment and I get great co-operation from Department officials with some of the material. I hope that when I leave here I will have something to leave behind.

Michael Creed (Cork North West, Fine Gael)
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Deputy Penrose might qualify for the writer's exemption.

Willie Penrose (Longford-Westmeath, Labour)
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I do not know about that.

Anyway, I have a question about the payroll underspend. The underspend is significant. I support unequivocally what the Minister is doing in terms of subsuming the savings into various critical areas that need additional funding. The aim is to meet targets like the 85% advances, which is most useful. There is a €12 million underspend in that area. Is it difficult to recruit in that area? What was the projected level of recruitment? What specific areas were targeted? Was the recruitment for Teagasc advisers or specialists or researchers? Many good young agricultural graduates are coming on stream and I imagine they would be delighted to get into the Department to learn and get some experience before moving out.

Considerable work is done on inspections. We know the Department is reviewing the Agriculture Appeals Act. The quicker the review, the better. I read with some alarm two articles by Darragh McCullough in the past two weeks. The reports would make a person's hair stand on end. I know that Department officials and those dealing with it are somewhat numbed as well in so far as they appear to be perplexed by the complexity of the various things they have to deal with. These things are imposed by Europe - I am not saying they are imposed by Department officials. Certainly, we need to streamline this area, especially if people are dropping out because of the associated complexity and because the eligibility criteria are so strict.

My next question relates to targeted agricultural modernisation schemes. Let us suppose someone is spending €45,000 or €50,000 and buys a big bulk tank or new milking machine. What happens if Department officials arrive the following day and the farmer has everything there and is using the machinery, but then is knocked back? A person can have all the degrees in the world – I have gathered a few in my time – but if there is no common sense then no degree is worth a sugar. I know that myself. I have one case going into the Department and the details of it are frightening. The person is an extremely hard worker and is working desperately. He is spending €60,000 or €70,000. He is in for 40%. His is putting in new robotic milking apparatus. I think someone arrived. The matter is with the Minister now. We are in the middle of appeals and whinges and everything else. I think we have to bring some common sense to these matters. He bought the machinery because of the incentive provided by the TAMS measure. Otherwise, he would not be on the pitch at all. The Department's position will come as some slap to him and he will be €30,000 or €40,000 out. We have to bring some common sense to it. I realise we must have rules and regulations, but he did not start it one month, three weeks or a week in advance - it was one day ahead.

A great friend of mine down in Mullingar used to scourge everyone. His name is Eunan Bannon. He was a sheep man. He always wanted this welfare arrangement. He was a great advocate of the welfare sheep.

Michael Creed (Cork North West, Fine Gael)
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I think I know him.

Willie Penrose (Longford-Westmeath, Labour)
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I imagine the Minister knows him. I think everyone knows Eunan. Am I reading this right? The Department provides for €800,000 more in ewes than the actual number that comes in. Is that right? Surely, the figure must be €8 million. There is an €8 million underspend. Is that correct?

Michael Creed (Cork North West, Fine Gael)
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I will address that.

Willie Penrose (Longford-Westmeath, Labour)
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I am a bit perplexed by that. I am actually surprised by it. This relates to one of the things we had before the current Minister assumed office. His predecessor had a major campaign to get this scheme brought in. In fairness, the Department provided the money. Now, however, it is not being taken up. I would be delighted to remind the former Minister about it – I will probably meet him tomorrow night somewhere. I will tell him that people did not take it up. Is it because of two health-related actions? Are they part of the problem? I cannot see it. Have Department officials given any thought to what has led to this significant shortfall in the anticipated numbers that would participate?

I am a great advocate of the beef genomics scheme. I am glad to see Deputy Ó Cuív raising the matter. Deputy McConalogue, Deputy Cahill and myself have had some significant clashes on it. I was a strong advocate and I think it is important. In fairness, it is useful but there are large numbers of technical requirements. I have a brother involved and he is a relaxed person. There is such a level of technicality involved that one could overstep and lose. That is the problem. I am beginning to wonder about some of the management requirements. Will the Minister arrange for some officials to examine which of the management requirements are the biggest blocks to people participating? The numbers involved in part 2 of the beef data and genomics programme are disappointing. I thought the programme would get another 5,000 or 6,000 participants. I believe the potential of this scheme is over 30,000 or thereabouts.

Charlie McConalogue (Donegal, Fianna Fail)
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Deputy Penrose must have been listening to Deputy Ó Cuív at least a little.

Willie Penrose (Longford-Westmeath, Labour)
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I listen to him. He is great. I would like to know what the major drawback is.

Another thing surprises me. The Minister came through the system. He was in Macra na Feirme and many other organisations. Macra na Feirme has been advocating for a renewal of the installation aid scheme. The Minister has done a good deal for young farmers, in fairness. When a young person is taking over a farm many hidden extras arise. In fairness, the Minister has done a good deal in the recent budget and recent changes have been most helpful. I was a great advocate of the installation aid scheme. It was only €7,500 but that aid was vital. I know many young farmers took over during the 1990s and that was great.

Deputy Cahill made reference to the Brexit loan scheme and I know what he means. He referred to the scheme by analogy as a cash flow scheme brought in by the Minister. I hope the €25 million will help ordinary farmers with the response to Brexit. I hope it is not too curtailed. I presume the Department will use the banks again for the Brexit loan scheme. I presume it will be modelled on the previous scheme but I hope it is not as restrictive.

I am delighted with the Bord Bia measure. One organisation I always advocate for is Bord Bia. Bord Bia has done a great job and has a great record. During Aidan Cotter's time in the organisation the amount of positive work done was extraordinary, as was the number of graduates trained. Many of those who graduated through Bord Bia are all over the world. A significant number are in America and they are being head-hunted. That is a tribute to the skills they acquired from Bord Bia. I would like to see more of them kept within Bord Bia.

With the wage structures available and the category of graduates coming from Bord Bia, they will be snapped up by other organisations. We need them now and over the next three to five years. This may be heresy but it is important that the Minister would go to the Department of Public Expenditure and Reform and make a case for trying to retain a number of those people. They are exceptionally good graduates and they are very talented. I am acutely aware that a number of them are being head-hunted by various organisations in America. As soon as they are in one job in America, they are head-hunted from that job. It is not the most popular thing to say but because of what we must face over the next two or three years in the context of Brexit, we need those types of people with particular skills and expertise. I would like to see us in the position to retain and reward them accordingly.

Michael Creed (Cork North West, Fine Gael)
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I thank Deputy Penrose. On the recruitment and savings element, my own take is that the embargo on recruitment for a number of years meant the age profile increased significantly. We are now trying to recruit but we are also losing quite rapidly at the other end with people going to retirement early and just because they have reached the age. We are running to stand still. We are just about getting ahead of it now and part of that comes from recruiting people in mid-year or the back end of the year, so we are not getting the full-year cost. I am advised there is no particular sector where there is a specific shortage but it is across the Department. We were hoping to get our staff numbers from just under 3,000 to 3,200 over the course of the past year. We are starting to make better progress but it is, as I stated, a case of running flat out to just about get ahead of the attrition rate.

On the installation aid matter, a value-for-money audit was done on the scheme that was quite critical of it as an untargeted approach. I do not know if the Department or the Comptroller and Auditor General did it. At that stage one got the money and there was no specific obligation on what to do with it. In recent years with the national reserve and young farmer top-up it costs as much and probably more than the installation aid but it has a specific focus. If there is on-farm investment, there will be a 60% grant and priority access to the national reserve for young farmers. These are practical and more focused elements. I appreciate there are hidden expenses to taking over a farm and installation aid money was important for that. Some of those expenses were related to improving the infrastructure on the farm, which now has a higher rate of targeted grant aid.

I agree wholeheartedly with the Deputy's comments about Bord Bia. Not to tell the committee its business but perhaps it would be a very useful exercise to invite delegates from Bord Bia before it.

Pat Deering (Carlow-Kilkenny, Fine Gael)
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It is on our agenda.

Michael Creed (Cork North West, Fine Gael)
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They really have a story to tell and a challenge to meet. They are being resourced to do it. They are highly motivated people. The matter of staff recruitment and retention is inexorably tied up with public sector pay and it would be very difficult to specifically ring-fence this for Bord Bia when there is a host of other sectors in the economy seeking higher than the average pay increases. They do an excellent job.

We are not quite sure why there has not been full take-up in the sheep welfare scheme. The scheme was designed in very close consultation with farm organisations and it is very practical. It is designed for the needs of both the hill sheep farmer side and the lowland farmer. There are options that can be used. We were surprised we did not have closer to a full take-up. In any scheme that might happen. Now that the first tranche of claimants are out there and we will re-open it, we hope to see more people coming in. It is a very simple scheme to comply with.

The review of the appeal system is up and running. I have a slightly different view that we should be careful what we wish for. I believe the system worked reasonably well but the review is up and running and has eminent people involved with it. Let us see where the chips will fall. The agricultural appeals model is different from others and perhaps we should be glad it was somewhat different. Let us see how this plays out.

On specific cases of the targeted agricultural modernisation schemes, TAMS, there is a requirement for a level of inspections. I would like to think Department staff are, by and large, very practical people with such inspections. That is my experience. There are regulations, compliance and audits of which we must be cognisant. If the Deputy has an individual case he would like to bring to our attention, we are certainly prepared to look at it.

I also believe in the beef data and genomics programme, BDGP. It can bring a degree of scientific evidence to the industry that is required. We have a very commercially focused dairy sector. If we could get 30,000 to 40,000 highly focused commercial beef people, we would have a great foundation for an industry. The problem is the industry is currently haphazard and fractured, with too many cattle movements and not enough cradle-to-grave operations on the beef side. On that basis, too many people are trying to make a slice from an animal. The BDGP has the potential to do for the beef side what genetic improvement has done for the dairy side over many years. In any scheme, in due course we must look at it to see if it delivers and whether we need to tweak it. We would have thought there would have been more applicants. Apart from the few that came in, thousands of people were in it and left voluntarily. There were nearly 5,000 who originally applied and did not activate their application. The big challenge in the Irish agricultural industry is to drive a substantial cohort of commercial beef operations. All the evidence is there, from the Teagasc farms on different soil types, that although the incomes may not be comparable with dairy, one can have a decent income in the beef sector if all the correct management decisions are being made. BDGP is only one aspect and grassland management etc. is another. It is a good scheme and in due course we will have to look at it and see if it is delivering and whether it should be tweaked etc. It has great potential to deliver.

Jackie Cahill (Tipperary, Fianna Fail)
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I have a question on capital expenditures. We are running into problems now where people are paying a deposit on the purchase of equipment. A salesman might insist on a deposit and then the farmers run into problems when applying for a grant.

Michael Creed (Cork North West, Fine Gael)
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Is this hire purchase?

Jackie Cahill (Tipperary, Fianna Fail)
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No, these are part-purchases. The people pay a deposit to secure equipment. When they look for a grant they are penalised because they have part paid before they apply for the grant. In the modern world, these people are forced to pay a deposit to secure a deal and this is a problem when they apply for a grant for the equipment. It is occurring more frequently now and it must be addressed. These people are not breaking any rules and the equipment has not been delivered. They have put down a deposit to secure the deal and run into problems with grant approvals.

Michael Creed (Cork North West, Fine Gael)
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I am aware of the matter and I know it has arisen with some of the co-ops in the dairy sector in the Deputy's region. It is not as easy solve it as it is to articulate the problem.

Jackie Cahill (Tipperary, Fianna Fail)
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I accept that but it must be sorted. They are bona fide applications.

Michael Creed (Cork North West, Fine Gael)
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It would be true to say the word has gone out that this is not the way to proceed. They are finding ways around that now in terms of people-----

Jackie Cahill (Tipperary, Fianna Fail)
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There are still a fair few of them outstanding.

Michael Creed (Cork North West, Fine Gael)
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I am aware of that.

Pat Deering (Carlow-Kilkenny, Fine Gael)
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I thank members and the Minister. That concludes our consideration of the Supplementary Estimate.