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.