Oireachtas Joint and Select Committees
Tuesday, 22 January 2019
Joint Oireachtas Committee on Rural and Community Development
Joint Meeting of the Joint Committee on Agriculture, Food and the Marine and the Joint Committee on Rural and Community Development
Common Agricultural Policy: Discussion
Apologies have been received from Deputy Pringle, who is a member of the Joint Committee on Agriculture, Food and the Marine. I remind members, witnesses and those in the Public Gallery to ensure their mobile telephones are turned off as they interfere with the broadcasting system. We are here today to discuss the Common Agricultural Policy, CAP, Pillars 1 and 2 - Pillar 1, agriculture, and Pillar 2, rural development programme - and the multi-annual financial framework, MFF, 2021-2027.
Today's meeting is a joint meeting of the Joint Committee on Agriculture, Food and the Marine and the Joint Committee on Rural and Community Development. The meeting has been convened to discuss the proposals under the Common Agricultural Policy, covering Pillars 1 and 2, expenditure and implications for the rural development programme, including the LEADER allocation, under the next MFF 2021-2027. Perhaps the most serious issue of all is the budget and how the CAP will be resourced, particularly where there is a distinct possibility there will be reductions over the next period of time.
I am joined by Deputy Joe Carey, who is the Chairman of the Joint Committee on Rural and Community Development. I welcome officials from the Department of Agriculture, Food and Marine, Mr. Colm Hayes, assistant secretary, Ms Sharon Murphy, principal officer, Mr. Jack Nolan, senior inspector, Mr. Fran Morrin, principal officer, and Ms Corina Roe, principal officer. I welcome also from the Department of Rural and Community Development, Mr. William Parnell, assistant secretary, and Mr. J.P. Mulherin, principal officer.
Before we begin I remind witnesses that by virtue of 17(2)(l) of the Defamation Act 2009, they are protected by absolute privilege in respect of the evidence that they give to the committee. However, if they are directed by the committee to cease giving evidence in relation to a particular matter and they continue to do so, they are entitled thereafter only to qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given. They are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person or entity by name or in such a way as to make him or her or it identifiable. Members are reminded of the long-standing parliamentary practice the effect that they should not comment on, criticise or make charges against either a person outside the House or an official, either by name in such a way as to make him or her identifiable.
Due to the number of members in attendance here today, I would ask them when making contributions to direct them specifically to the issues being dealt with. We will limit questions to a couple of minutes. We can take a second round of questions, if necessary.
Mr. Hayes will make an opening statement and officials from the Department of Rural and Community Development will answer questions relevant to their Department. I will then call on members who indicate to put their questions. However, before I ask Mr. Hayes to make his opening statement, I will ask the Chairman of the Joint Committee on Rural and Community Development, Deputy Carey, to say a few words.
I thank the Joint Committee on Agriculture, Food and the Marine and the Chairman, in particular, for proposing this joint meeting of both committees to discuss this very important topic, namely, the future of the Common Agricultural Policy. This is a time of great uncertainty as the Brexit process continues to roll on towards the date of the UK departure from the European Union on 29 March 2019, which is only 66 days from now. This will have a serious effect on the funding of the European Union in general, and on the Common Agricultural Policy, in particular. Brexit will also have a serious effect on Ireland's economy. We must be aware of issues like climate change and what steps we can take to mitigate against the risk of unfairly penalising people in rural Ireland. That point was made very clearly by RuralLink at a recent meeting of the joint committee.
The negotiations for the European Union's multi-annual framework 2021-2027 and the Common Agricultural Policy 2021-2027 are ongoing. During 2018 we had meetings with the European Commission, the European Court of Auditors and the Departments. It is very important that parliamentary committees continue to fully engage in the process.
There are two pillars to the CAP - Pillar 1, agriculture, and Pillar 2, rural development. My committee is particularly interested in Pillar 2, especially the LEADER programme. It might be helpful to note that there are nine objectives in the future CAP. Many of these objectives will be of great benefit in encouraging sustainable development in rural Ireland. Objectives of CAP, post-2020, include: ensuring a fair income to farmers; increasing competitiveness; rebalancing the power in the food chain; climate change action; environmental care; the preservation of landscapes and biodiversity; support of regenerational renewal; maintaining vibrant rural areas; and protecting food and health quality. We should bear these objectives in mind during our discussions today.
I thank the witnesses from the Departments of Agriculture, Food and the Marine and Rural and Community Development for attending this joint meeting. I look forward to hearing about the state-of-play regarding CAP and the MFF negotiations and our future prospects.
Mr. Colm Hayes:
I welcome the opportunity to update the joint committees on the CAP post-2020 negotiating process. As mentioned, we are before two committees today and I am joined by colleagues from the Department of Rural and Community Development who have overall responsibility for the implementation of LEADER under the rural development programme.
Our last engagement with the agriculture committee was in June of last year, when we updated it on the Common Agricultural Policy legislative proposals after 2020 which had only been published. At that time the negotiation process was still in the very early stages with just one discussion having taken place at the Council of Agriculture Ministers. Since then the negotiations process has advanced under the leadership of the Austrian Presidency of the EU. The main focus of the Austrian Presidency was on the issues concerning governance and the operation of the new model. While the key changes have been considered in these discussions so far, decisions on those have yet to be finalised. I will return to those aspects later.
My intention today is to provide both committees with an overview of the CAP post-2020 negotiation process, in particular highlighting the key issues that are important for Ireland. I will also set out the indicative timing of the proposals as well as where we are currently with the funding of the next CAP. There are two main factors which militate against providing more details today on the design of our national CAP strategic plan and the individual schemes, namely, that the relevant regulations are some way off being agreed at EU level and the budget to fund the next CAP is not yet finalised.
Before we discuss the negotiations on the new CAP, I take this opportunity to inform the committee on the implementation of the current rural development programme, RDP, including LEADER. The agriculture committee was last updated on RDP expenditure in June of last year by the Minister, Deputy Creed, when he presented the review of spending under the current rural development programme. This review demonstrated that the programme is on target to spend all funds and this remains the situation. We are currently updating the review to take account of final 2018 expenditure on individual schemes, but we do not expect significant change to the macro-expenditure figure.
Delivering on such a diverse programme is, of course, challenging. I am delighted to say Ireland is performing very well in this regard. Our drawdown of EU funds at 55% is well above the EU average for other member states, which is just over 36%. We are second only to Finland in drawing down funds. Our reputation in Europe over many years is to leave no euro behind and I am confident this will continue under the current RDP.
The LEADER programme is delivered by our colleagues in the Department of Rural and Community Development. Representatives from that Department are here today and are available to answer any questions the committee members may have on that programme. LEADER is an important part of the overall rural development programme and a total of €250 million has been committed under LEADER up to 2020.
Activity under the LEADER programme increased considerably over the course of 2018 and a further increase in activity is anticipated during this year. At the end of 2018, almost 1,600 projects, to a value of €54.6 million, had been approved under LEADER, and a further 349 projects, with a value of €21.7 million, were in an earlier stage of the approvals process.
By comparison, fewer than 600 projects had been approved at the end of 2017, so the increase in the level of project activity is evident. The LEADER programme will also form an important part of the next rural development programme, RDP, because the Commission's draft regulations propose that a minimum of 5% of the RDP will be allocated to LEADER interventions.
I will now move on to the negotiations of the current Common Agricultural Policy, CAP, legislative proposals. I am conscious that a lot of discussion has taken place on these long and detailed proposals during the past six months or so. It is in that context that what I present is very much a summary of the negotiation process to date. However, I am happy to have a more detailed discussion afterwards with committee members.
Since the legislative proposals were launched on 1 June last year, 25 EU working group meetings have been held under the Austrian Presidency of the EU. EU Agriculture Ministers also discussed the proposals at each of their Council meetings during the Austrian Presidency. Up to the end of December 2018 the CAP strategic plan regulation has been discussed on 12 separate occasions; the financial provisions regulation on nine occasions; and the common organisation of the market regulation on four separate occasions. A first read-through of the proposals was completed by each of the responsible Council working parties. However, all provisions with budgetary implications or of a horizontal nature have been set aside in square brackets pending progress on the multi-annual financial framework, MFF, post-2020 negotiations.
The Austrian Presidency presented several progress reports on each of the draft regulations, three on the CAP strategic plan regulation; one on the financial provisions regulation; and, one on the common organisation of the market regulation. A final progress report, outlining the work undertaken on the three draft proposals, was presented by the Austrian Presidency at the agri-fish Council in December.
In its final progress report, the Austrian Presidency observed that the Council position will only be established on the draft proposals, once its key political and financial elements have been agreed within the MFF post-2020 negotiations.
Work on the draft proposals will continue under the Romanian Presidency. The Romanians have outlined their ambition to achieve a partial general approach on the CAP post-2020 proposals at the June agri-fish Council. We are supportive of this timetable but it is very much dependent on several factors progressing in a timely manner. I will touch on the timing of the proposals later.
I would like to outline some of the key points of concern for Ireland that have arisen during the negotiations to date. The new delivery model and the requirement to prepare a CAP strategic plan, covering Pillar 1 and Pillar 2 expenditure, is perhaps the most significant change for member states to have to contend with in the new proposals. The CAP strategic plan will allow member states the flexibility to design measures that are best suited to their own strategic needs. We have said we are willing to work with the new delivery model and welcome the move to a more strategic performance-based approach. However, preparation of the CAP strategic plan will present a number of challenges and complexities for member states. The current proposals require them to submit their draft CAP strategic plan to the Commission for approval before the deadline of 1 January 2020. The process of developing the draft CAP strategic plan will be complex, involving a strength, weakness, opportunity and threat, SWOT, analysis, a needs assessment, scheme design, ex-ante evaluation including a strategic environmental assessment and an appropriate assessment. The Department is working towards the 1 January 2020 deadline, albeit amidst uncertainty surrounding agreement on the funding for the next CAP and the final decision on the draft regulations.
In recognition of the climate change challenges facing the EU sector, and the European Union's international commitments on climate action, the new CAP proposals outline a greater environmental ambition post-2020. It is expected that 40% of the CAP's overall budget is directed towards climate change action. It is a new departure for member states that they will be required to design a specific climate and environment scheme in Pillar 1. We have supported the increased environmental ambition for the CAP. It is consistent with the Department's Food Wise 2025 strategy in recognising the critical importance of environmental sustainability, giving it equal billing with its developmental objectives, and we have recommended a range of environmental actions. It also continues the work of the Department under the current RDP under schemes such as the green low-carbon agri-environment scheme, GLAS.
From a departmental point of view we are working with stakeholders and State agencies on the whole area of environmental sustainability. A lot is already being achieved through the current CAP, for example, investment actions such as beef data and genomics programme, BDGP; the recently announced beef environmental efficiency pilot, BEEP, scheme; the targeted agricultural modernisation schemes, TAMS, investments in areas such as low emission slurry technology, and work by both Teagasc and Bord Bia, through research, advisory services and carbon audits. While a lot is already being done, we know there is no easy pass for the agriculture sector when it comes to tackling our climate and environment objectives, and more needs to be done in this space.
The new environmental conditionality provisions set out in the draft proposals will need to be implemented effectively. We believe consideration should be given to the applicability of the additional mandatory requirements under Pillar 1 to particular local conditions or farm types. For example, a farm sustainability tool which is applicable to more intensive farms may have less relevance for small scale, extensive farms. There is also an important balance to be struck between the mandatory baseline established in the eco-scheme under Pillar 1, and the environmental measures in Pillar II. Member states will need to be allowed sufficient flexibility to implement measures under Pillar I that do not set the bar impossibly high for the voluntary schemes under Pillar 2.
Some other areas of concerns for Ireland that will require further consideration and discussion are the capping of direct payments and the definition of the genuine farmer. While the Minister for Agriculture, Food and the Marine, Deputy Creed, has said we are open to the capping of direct payments, we do not agree with the mandatory requirement to deduct salaries and labour as part of this process as we outlined previously to this committee. We believe it will create an unnecessary and significant administrative burden on member states that goes against the spirit of modernising and simplifying the CAP. The mandatory requirement for member states to define the 'genuine farmer' in their CAP strategic plan is something we also have a difficulty with due to the nature of the proposed definition. The Department will be considering this in more detail in the coming months.
Moving to the budget for the new CAP, as the committees know the MFF post-2020 negotiations are continuing in parallel with the CAP post-2020 negotiations. We know there are diverging views among member states when it comes to how the funding under the next MFF is allocated. The proposed 5% cut to the CAP budget is unacceptable for Ireland and we are seeking a restoration of these cuts. However, negotiations for the next MFF are the responsibility of finance Ministers and Heads of State and Government, and ultimately, the allocations under the next MFF will be determined by them. Protecting the CAP budget in the next MFF is a priority for Ireland.
The Commission's objective is to have the CAP legislative proposals adopted by the co-legislators in the spring, prior to the European parliamentary elections in May. This is a challenging timescale but we are fully supportive and are fully engaged in the negotiation process in an effort to achieve this objective. The main steps required are a partial general approach agreed on the CAP legislative proposals at the agri-fish Council meeting in June and the European Parliament's consideration of the proposals, which is also ongoing. Latest reports indicate that the European Parliament's first reading position on the proposals will be voted through its last plenary of the term in April. Progress on the MFF post-2020 negotiation process will also have an influence on the outcome of the CAP negotiations. Agreement on the MFF post-2020 proposals is not expected to take place until the autumn.
We are still in the middle of the negotiation process and we still have a way to go before agreement on the proposals can be reached. Nonetheless, we are progressing on the basis of having to design and submit our national CAP strategic plan by 1 January next. This will require intensive input and continued engagement with all stakeholders, including these committees over the coming months and will be a top priority for our Department in 2019. I look forward to addressing any questions the members may have.
I thank Mr. Hayes for his opening statement. Before taking members' questions, I want to ask officials from the Department of Rural and Community Development about LEADER. To the ordinary citizen who tries to deal daily with LEADER, the system seems to be very bureaucratic. Could the officials outline how the process works from the time an organisation first expresses an interest in trying to acquire funding from the Department to the time it is in a position to draw down the funding and how long the process takes?
Mr. J.P. Mulherin:
The LEADER programme is not all that different from the one that operated last time around. For those interested in accessing funding, the first port of call is the local action group. The development officers in the local action group will assist them first in submitting an expression of interest to identify whether it is the type of project that would be suitable under LEADER.
After that the individuals or organisations are required to submit an application form with relevant supporting documentation. That documentation is looked at by an evaluation committee and then selected by the local action group involved. Essentially, that is the process that applied under the last programme and the process that applies this time. The difference this time is that those that are delivering the programme are slightly different than would have applied previously. Whereas previously it was just local development companies, now we have collaboration between the local development companies, the local authorities and the local community development committees that were established under the local government process.
At the outset of this programme, there were some concerns about the time it was taking for applicants to go through the LEADER approval process, but following a forum held in May 2017 the Department and the Minister introduced 31 actions to refine how applications went through the approval process. That has had a significant impact on the number of projects coming through the process and the amount of funding approved under LEADER. More than 1,600 projects with a value of €55 million have been approved for LEADER. The value of projects approved last year was double that in 2017. Clearly, the programme is moving in a good direction with a high level of project approvals taking place.
Mr. J.P. Mulherin:
Time will tell. Currently, about 38% or 39% of the budget has been allocated. Our expectation and objective is that about 80% of the budget will be approved by the end of this year with the remainder next year. The feedback from the local action groups is that it is achievable, but we will need to wait and see what arises in the next 18 months or so.
This time around the CAP has been a bit overshadowed by Brexit. We may not have devoted as much attention to the CAP negotiations as we should have. In the next few months, while Brexit will be critical, the CAP is of major financial importance to the economy, the agricultural industry and farmers.
I note Mr. Mulherin's comments on LEADER. At the end of 2018, only €76 million of the projected €250 million was spent, which is an exceptionally small figure. I agree with the Co-Chairman's comments. People are frustrated with LEADER and they feel it has become extremely bureaucratic. In the next round of the CAP it will need to be more streamlined and user-friendly for community groups. In my area people have definitely become very frustrated with the process. Unfortunately, some have decided it was too bureaucratic and too many obstacles were put in the way of them accessing the funding. Making LEADER more user-friendly needs to be part of this round of negotiations.
I fully agree that the climate change challenges facing us must be addressed in the CAP. The climate change targets set in Food Wise 2025 are becoming increasingly incompatible as we move forward. We need to face up to some harsh truths. We need a focus on climate change. A carrot is always better than a stick. Incentives to help us meet some of our targets and reduce our emissions must be part of the CAP this time. We have discussed it already. Food Wise 2025 needs to come under the spotlight. It is debatable whether it is realistic and whether its targets are compatible with climate change.
I fully agree with the comments on the budget. Even if we keep the budget static, in real terms its value to farmers has fallen very significantly over a number of years. The presentation was short on specific details of the incentives for young farmers. All those details will be extremely important. We see this definition of "genuine farmer" raising its head again. The last time we failed to come up with a worthwhile definition. I would be very sceptical about it being any different this time.
The Fianna Fáil Party fully supports a cap on payments. I do not think it will be very significant to the overall budget. It is essential to have a meaningful cap for the taxpayers of Europe funding the CAP. A realistic cap on payments is long overdue. We need to promote that and ensure it is in the final document when it is published. In the past, the cap on payments has often been dropped at the 11th hour and a cap with no meaningful impact put in. A meaningful cap needs to form part of this.
I look forward to more detail about the schemes to be prioritised. The UK's Brexit decision will definitely have an impact. In the next few months, we really need to engage in the finalisation of this round of CAP.
I thank the officials for the presentation. A number of important issues have come up. I concur with my colleague that LEADER is an excellent scheme but it is drowned in a volume of bureaucracy. Even people who have hired in expertise find it difficult to deal with some of the requirements. The thrust of it is to ensure the revitalisation and sustainability of villages. People are worn out by the time they get to the end line. It is a very good scheme with very good incentives, but we do not want to throw out the baby with the bathwater in being overly restrictive. Even with experts' help, people find these things extremely difficult.
I look at the CAP in the context of the Brexit developments or non-developments. That will be going on in ten years when many of us will no longer be here. I am looking at the remit of the member states in the simplification of CAP payments and the reduction of administrative burdens for the final beneficiaries. That is a cardinal objective of the proposed new regulations. I hope that is not just watery talk as they say down in the midlands.
From the viewpoint of the farmer, the recipient, very often it is our own bureaucrats who tie it up. It is time we lost this love of bureaucracy and red tape. It is very hard to get it removed from the centre of Government policy. Government policy is fleeting; the permanent government is always there which is part of the problem.
In June 2018, a common framework of rules to implement the CAP strategic planning regulations was introduced. What level of divergence will be allowed when we get down to the brass tacks? Where does that fit in? It is not possible to drive on a single road to every part of Ireland. It is necessary to branch off somewhere. Therefore, we need a bit of divergence to allow for various situations to arise.
We are talking about a 5% cut in the multi-annual fund. I know the Departments of Finance and Agriculture, Food and the Marine are working hand in glove because otherwise it would not work. We all know of three, four or five countries that do not want to contribute to funding CAP.
Apart altogether from hard borders and everything else a no-deal Brexit could bring, even with a good deal there will be a hole of between €10 billion and €12 billion in the CAP as a result of the UK withdrawing from the EU. That is a significant amount of money. While I understand that we have committed to playing our part at national level, there is no way we can find €12 billion. We must find a portion of the money applicable as otherwise we might as well drop the whole thing and pay farmers directly from now on. Is there any sign of flexibility on the part of those recalcitrant EU member states which have other objectives?
A series of objectives has been set out by other countries that is not focused on protecting the CAP or anything else. For us, the 5% cut would mean a 4% cut in Pillar 1 funding and a 50% cut in Pillar 2 funding. Maintaining the level of CAP funding is critical. Deputy Cahill is correct that if we take inflation into account, the real value of payments has been dropping but that is neither here nor there. We will be very lucky to maintain the nominal value rather than speaking about real values. Will the regulations permit member states to maintain the current level of Pillar 1 and supplement Pillar 2 expenditure if all comes to all? If the hole in the bucket remains as big as it is reported to be, a bit of ingenuity will be required.
We know about the direct payments and the basic payments in Ireland. They are absolutely critical for Irish farmers, in particular in the beef and suckler cow sectors where basic payments could constitute 110% or 150% of income. This will be a big issue. Perhaps it is time to spread the consultation beyond farm organisations. Many farmers and ordinary people have views on this. Perhaps we are hamstrung and our views have been circumscribed by what some farm organisations want. Some of the farmers I speak to say that no matter what we do in the beef or suckler cow sectors, they will not make a living. The other day a farmer told me he would be better off reducing his number of sucklers from 60 to 30 as it would reduce expenditure and with fewer cattle going to the factory, it would not have an excuse to reduce prices. That farmer, who has land that is suitable for forestry, asked why the forestry grant could not be increased on a graded basis. This would not be for corporate institutions or insurance companies but for ordinary farmers. In this way, we would decrease the carbon footprint and increase sequestration as a result of more forestry. We do not want to put forestry on good prime agricultural land but even in Westmeath we have marginal land that could benefit from it. We need a bit of ingenuity. We cannot sleepwalk along the same old road we have walked for the past 20 or 30 years.
The cap on payments is absolutely correct. I remember being ostracised for proposing it in the 1990s. I knew what Mary Magdalen felt like because I was ostracised from everything. I was always of the view that it was not a rich bed. I knew the objectives of the CAP back in the 1970s and they certainly were not to pour €150,000 or €160,000 into anyone's pocket, particularly when many of the people who received the money never employed a labour unit. Let us be clear about a few things. Rural Ireland is sustained by employing labour units. I supported the €60,000 cap simpliciter. Deputy Cahill is correct that we have no idea where we would end up if we were to get stuck into definitions of genuine farmers and the devil knows what. Knowing the bureaucrats, if they get a hold of these, it will be goodbye to the hills altogether because people would never qualify. Will the calculation be done on a per hectare basis, an entitlement basis or a combination of the two? If we do it on a per hectare basis, we will need a different reference year because being stuck with the same one would mean an awful lot of people would be excluded from higher payments. We could taper it on a per hectare basis so smaller farmers with up to 25 ha would get higher payments. We must start thinking like this. There is no use coming out with ó chroí, mo chroí about rural Ireland if we do not put the money where our mouths are. There is plenty of money in the CAP budget so let us maintain it. One of the objectives of the CAP was to maintain the maximum number of people in rural Ireland but if it is divvied out in the wrong way, we will pay only lip service to that objective.
With regard to environmental measures, we must devise a new green architecture. There is no use in putting our heads in the sand and getting a bit huffed. I do not care whether it is the Taoiseach or anybody else who says something. We must deal with this. I have met many farmers who have said we must deal with it. We must deal with the challenges of climate change. We have some good schemes. Last night, I met a farmer who is stuck with regard to the beef data and genomics programme. A small little thing will strike him out for next year. The bit of land he had taken was sold unknown to him. These are extreme things that happen and of which the Department must take account but the scheme does not allow for that. We also have the incentivised exploitation of renewable energy and the promotion of biodiversity and habitats.
We will have nothing left in rural Ireland if we do not look after young farmers. I am delighted to see the 2% allocation under Pillar 1. There has been a notorious amount of squeeze with regard to how we will get this. Older farmers in my age group will have to see that if we do not do something for the younger crowd coming through, no one will come through. We need to incentivise younger farmers. Has any progress been made on specific measures to support the important objective of the CAP strategic plans for young farmers? If the thrust of the strategic plans is to increase the level of subsidiarity envisaged to be available to member states, which is what I understand it to be, does it allow us greater flexibility and manoeuvrability to deal with young farmers? I am very interested in finding out whether this is part of the negotiations. What level of negotiations are we at on these very strategic objectives? I noticed that Article 70 has to do with risk management regulations, insurance and mutual funds. Does the Department have views on this? Is it hamstrung or circumscribed? What will be available for the farming community in this respect?
I thank Mr. Hayes for his presentation. The clear purpose of the CAP is to support agriculture. It started as a cheap food policy but also had the objective of maintaining family farms. It has this dual role to play. We all agree that a cap of €60,000 on the maximum payment is needed. We must also acknowledge it will not be a windfall. It will put a little bit more money back into the system but not a huge amount.
To follow from what Deputy Penrose has said about young farmers and those on smaller holdings, if we are to protect small family farms, there clearly has to be some means to ensure the Pillar 1 funds in particular will give them a decent base income so they will know what they have and can move forward from there. This has been the difficulty until now because the reference years are almost 20 years old. In many cases, particularly small holdings found they had very low payments. Convergence has helped a little bit. I would like to get the views of the Department on where this is going.
It is a question of trying to come up with a system that will deliver something that is more fair to support the family farm, rather than moving us increasingly towards the industrial model of farming which many fear is the opposite of what the consumer wants. It would not be good for the environment. We really need to keep more small and medium-sized farms sustainable.
The amount of money cut from the budget does not tally with the amount that will be absent from European funds overall because of Brexit. It is being used as an excuse to cut more from the budget than is necessary. It also flies in the face of what is supposed to be a key objective of the European Union, namely, the protection of the environment. Land use and land policy are key in that regard. If those in command of the land - farmers, the primary producers - are to be funded adequately to use land for the public good, particularly through carbon sequestration, clearly the CAP will be the method to achieve it. Talking about cutting funds for the CAP when trying to achieve these objectives seems to fly in the face of progress. What argument has been put forward? From the perspective of Irish and other European farmers, to what extent will the payment for carbon sequestration or other positive environmental practices ensure land is used in the best way possible?
Let me turn to the LEADER fund. Most have said the new LEADER fund system is awkward and difficult. Communities find it hard to apply and draw down the money. They are frustrated by the system and comparing it to the old one. Various kites were flown regarding the reasons it changed. I am not sure what the real reasons were. The budget is €250 million up to 2020 and between one quarter and one third of that sum has been spent. Therefore, it poses questions about where we are going to go and how we will achieve the proposed expenditure in such a short period. Quite apart from that, it is very clear that if a fund is not delivering, there is a problem. Communities that need LEADER fund assistance, particularly in more deprived rural areas, do not have the capacity or expertise needed to go through the whole process. This has not been recognised fully in the new configuration between county councils and all of the various parties involved in the process. This has been to the detriment of a fund that had a very good reputation for delivering for rural areas, but that reputation is being lost. I would like to know what measures can be taken to revert to a system that will deliver more and better for communities and that will have an easier application process.
Every time we talk about the CAP, we talk about simplification, yet at the other end of the process we find there are more complications. One almost looks forward to the day when there will be talk about the policy becoming complicated because then it might end up being the reverse. That is how cynical many have become. However, we cannot afford to be cynical because Brexit is approaching. We have to try to have a positive outlook, build on what we have got and proceed with some sense of courage, regardless of the obstacles before us. It needs to be acknowledged that the manner in which the LEADER programme has operated for many communities across the country has been very disappointing.
Mr. Colm Hayes:
I will start with the budget which, naturally enough, seems to be the main issue. Our position on it is unequivocal. From the Taoiseach to the Minister for Finance and our Minister, we want to see the budget restored to the previous level, taking into account that there will no longer be the UK contribution. Deputy Martin Kenny mentioned how proactive we had been. When here on the last occasion, we outlined that our Minister had been to the fore in gathering together other member states. He joined five other Ministers, through the Madrid Declaration, in emphasising the importance of a strong budget. Approximately 12 to 15 member states have since come on board, which means that there are now 18 to 20 member states that share the same view. Of course, it is not the view of every member state and it is ultimately a matter for Finance Ministers, but on the matter of the budget we are on the same page as every member around the table and every stakeholder.
I was asked about the importance of this issue. It is quite clear in that 80% of the EU funds for Ireland come through the CAP. We are ultimately net beneficiaries. For every euro we put into EU funds we get back a higher amount through CAP. However, the Commission's proposals are based on a certain increase in member state contributions and not all member states are willing to make a contribution. As Deputy Penrose outlined, other member states have outlined other priorities which have their own costs attached. That has to be balanced with the CAP.
We were asked whether we could supplement the budget at national level. As I understand the proposals, we will be able to supplement Pillar 2, subject to available funds. Commissioner Hogan previously quantified the shortfall or gap for Ireland at about €47 million per year. There are so many variables at play affecting whether we will make up the contribution that it would be unwise to speculate at this stage.
Deputy Penrose raised the issue of regulations. They are quite clear. On the question of whether one can top up Pillar 1 payments, one cannot according to the current regulations. We are not always in favour of this because it would give a certain degree of leverage to member states with big pockets in what they might or might not do with their farmers, which might put us at a certain competitive disadvantage. There is flexibility to move 15% of each budget between the two pillars. We are a long way from decisions, but there is certainly that option.
On the issue of young farmers, I absolutely agree. As may be seen from a cursory glance at the measures under the current CAP, we are very supportive of young farmers. The policy on generational renewal in agriculture in Ireland is based on incentives for young farmers and bringing through the talent, skills and enthusiasm available. We are certainly doing what we can to help in that regard and will continue to do so under the next CAP. As Deputy Martin Kenny said, there is a proposal for 2% of the funding to be set aside. In fact, Commissioner Hogan has been quite clear that the Commission does not intend to approve individual member state CAP strategic plans, unless they very clearly set out what they intend to do for young farmers. I am confident that we will not be found wanting in that regard. In addition to the figure of 2%, there are specific supports possible within the new regulations for young farmers. These are the supports of which we avail. An example is a higher payment under TAMS. There is a figure of 60% for a young farmer as opposed to the standard 40%. All the time, we have national Exchequer measures to support young farmers through the taxation system. They go from budget to budget, but again it is part of the package of State supports for young farmers. We are absolutely in agreement on recognising the importance of supporting young farmers.
We agree on the question of climate change. We very much regard the next CAP as part of the solution to climate change and it is part of Ireland's response. We are extremely interested in what the Oireachtas Joint Committee on Climate Change will report in the next couple of weeks and look forward to having an input. We are engaged intensively with the Department of Communications, Climate Action and Environment and its Minister, Deputy Bruton, as they intensify their efforts to deal with climate change. As I made very clear in my opening remarks, there is no free pass for agriculture and we do not see it that way. Now that we have a specific 40% target in the next set of climate change regulations, we very much see it as part of the solution. It could involve measures such as technology transfer or what we are doing. We are doing a lot to tackle climate change under the current rural development programme, examples being low emissions slurry spreading and the beef data and genomics programme. There are many individual actions also.
An issue arises on the balance between Food Wise 2025 and the next CAP. Our Minister has been very clear on the importance of sustainable intensification.
We know Irish beef and dairy production is top of the class when it comes to environmental sustainability but it can do more and we are determined it will do more. We know the stakeholders are determined that it will do more. When it comes to climate change policy, it is a stated EU position that the balance between food production and environmental obligations must always be borne in mind. This goes to the sustainable intensification point of view. In general terms, I agree with speakers who have said that they view the CAP very much as part of the solution. The individual schemes within that, the conditionality that goes behind the Pillar 1 payments and the possible eco-scheme under Pillar 1 will all have a very strong climate focus as well. They will also bear in mind the other environmental obligations that rest on our Department. We are not forgetting things like water quality and biodiversity.
There appears to be strong support for capping, as there was last time in the discussion on the regulations for the €60,000 cap. This is currently €150,000 under proposals. Last time around, we immediately capped it at €150,000. The proposal this time around is for what is called mandatory degressivity to €60,000 so it will be a gradual reduction. The question will be a policy question for the Department and the Minister of the day as to how quickly we move towards that capping but the Minister has indicated that we should be open to that capping figure. The difficulty is that the regulations oblige us to take into account the salary of the recipient. I would certainly agree with others who point out the administrative complexity involved in trying to do that both for the farmer concerned and for us. Our priority every year, particularly when it comes to Pillar 1 payments, is to get them out at the earliest possible date. We always do the usual 16 October deadline. If we must start factoring in individual P60s, P45s and all sorts of other factors, it will bring about a complexity nobody wants to see. As I said in my opening remarks, that is an issue we want to tackle.
The question of consultation was raised and it is something we should talk about in terms of next steps. We had a formal consultation last July with the many stakeholders, which was attended by the Chairman, who was there to present the views of the committee. I can assure the committee that we have a lot of ongoing informal consultation with stakeholders all the time at ministerial and official level. We consult with individual farm organisations and local groups. Both Ministers met the environmental pillar just before Christmas to discuss its views. We have had public stakeholder consultations as well and have received a wide and varied range of views. I think I can confidently speak on behalf of the Minister on this point. The Minister is very open to consultation and if there are any views out there at any time, people know where we are and that we are contactable so the door is open to anybody with views on the next CAP and how our CAP strategic plan should be organised.
Deputy Penrose raised the front-loading of grant payments for forestry grants. This is something we have just done. We did it this year as part of the mid-term review so we have a slightly adjusted higher payment for the first ten hectares for the very reasons mentioned by the Deputy, namely, that it might incentivise those with smaller holdings to come in. I am very glad to say that this is in place. There is some pick up as well and possibly at some future point we might inform the committee about the exact level of pick up of that but I am glad to say it is in place.
Regarding the question of convergence, a point raised by Deputy Martin Kenny, the proposal in the regulation is to move to 75% convergence. The Minister has indicated that we are open to that. The CAP generally has been on a path of convergence anyway so I do not think anybody sees it diverging too wildly from that. The Minister has indicated that we are open to continuing down that path. The current CAP envisages convergence reaching 60% this year. The BPS application window opens quite shortly and when this happens, it will be evident regarding those who are affected one way or the other. In some respects, it means that having gone from what was effectively no convergence to 60%, the jump from 60% to 75% may not be that significant. At at minimum, it is 75%. It may not be that significant in the overall scheme of things. There is a lot of work and modelling as to how much funding that might generate but when we start to see the shape of the budget and payments, we could come back to the committee with a bit more detail about how much money that is generating. Regarding the general point about whether convergence will happen, it is certainly in the proposal and the Minister has certainly indicated a willingness to consider that.
Risk management is always a very topical issue. What risk management measures will we introduce? We have a slight divergence from the current proposals concerning whether the risk management measures should be mandatory for member states. Bearing in mind our own specific circumstances, our preference is for it to be open to us to consider them and we are open to considering them. The main risk management measure in the current CAP has been the crisis reserve fund to which farmers contribute. To be frank, I do not think anybody claims that it has been as effective as it should have been or worked as well as it should have. I am not sure that it has paid out too much. When income crises have occurred during the CAP, including the dairy crisis in 2015, the Commission has gone to other sources and the crisis reserve to fund it, which is something we have supported. Having a Europe-wide crisis reserve is not a great model because it is extremely difficult to get agreement and engagement about how it should be used but we do want to step up. We are aware that climate change is starting to manifest itself. We had some unpredictable weather this year. From a national point of view, the solutions to date have been ad hoc. We need to consider whether they can be built into the next CAP. Hopefully, I have answered the main points. If I have not, we are very happy to come back.
One of the points Mr. Hayes may have missed concerns the active farmer and simplification. Every time a CAP reform appears, things are meant to become simpler. What kind of guarantee, if I can use that word loosely, exists that in respect of the new strategic review plan, we will see a more simplified CAP post 2020? The definition of "active farmer" has been bandied around for many years and we do not seem to be able to come by an accurate definition. Some people might argue that the productive farmer is an active farmer. One might then argue about what type and level of production the farmer has. Does Mr. Hayes have any views on those two issues?
Mr. Colm Hayes:
On a general point, our view currently is that the definition of active or genuine farmer in the regulations is not to our satisfaction. It is something on which we are active. It is because of the reasons outlined by the Chairman, namely, the effects a definition can have on the many varieties and types of farmers out there, that it needs to be carefully considered. Until we start to see a change in the regulations, I do not think we can go one way or the other but we want to keep as many farmers who are farming in production and we realise the importance of the CAP supports for them.
Everybody wants to see simplification. We want to see it for ourselves as well. There is a general thrust in the regulations, as Commissioner Hogan outlined, to give greater flexibility to member states post 2020 to permit them to adjust CAP measures to local realities. That is something we certainly support. What will farmers notice in terms of changes next time around? In respect of controls, I think they will notice that there will be a greater use of technology. There will be more satellite-based controls because that technology is improving all the time. It will not do away completely with physical checks but it should mean some adjustment. We are promised that there will be more subsidiarity for member states to develop schemes and measures and the associated controls and penalties that go with them. I am sure that the Commissioners on the behalf of taxpayers and us on behalf of the Commission will not get off the pitch completely when it comes to controls because, obviously, we have to account for the vast sums of money that go into it. It is something that is being driven as a general principle. One important point is that we do not want to see a complete re-nationalisation of the CAP, which could be the effect of excessive subsidiarity.
It is important to us that farmers generally are operating to a common policy. Otherwise, the common policy loses its meaning. I do not think we want our farmers to be at any competitive disadvantage to other member states. A lot of this is in the detail, which has to be worked out.
Mr. J.P. Mulherin:
I will respond to some of the comments that were made on LEADER. Deputies Cahill and Martin Kenny mentioned the level of spend on LEADER. We acknowledge that compared to the other schemes under the rural development programme, it does appear to be a low level of spend. That is the nature of LEADER. It was the nature of LEADER under the last programme and in other EU member states. We are fairly consistent with the level of delivery in other member states. Under LEADER a period of time is required to work with potential applicants, to animate the programme, engage with them, develop their applications and see them through. The pace of delivery this time around is not dissimilar to the last programme.
In terms of coming towards the end of 2020, payments under the last programme would have been made in 2014 and 2015 and, likewise, under this programme, payments for LEADER will be made in 2021 and 2022. It is not a case that all of the funding has to be spent by the end 2020 but we certainly will have all of the funding allocated by then.
All of the speakers mentioned the bureaucracy and some frustration with the delivery of the programme. That is something we have to recognise when these points are made to us. I would like to emphasise that it is something we are heavily focused on as well to try to simplify the programme as much as we can. We do acknowledge that there is a degree of paperwork involved for applicants but we have done a lot of work with a lot of the stakeholders over the last 18 months to two years to try to reduce the requirements on applicants. In a lot of cases these are community bodies that are trying to access this funding for the benefit of their local areas. We have introduced a standard application form and substantially revised the procurement requirements for the programme, which were a real issue under the last programme. We have reduced the number of administrative checks that are required under EU regulations. There used to be two of them but we are doing them as a one-stage process and have reduced the number of questions as part of that check. We are continuously working with all the local action groups to see where we can improve the programme. The reality now is that the requirements for an applicant under LEADER are less onerous than they were under the last programme. That is a message that we need to get out. It is something we are working on with our colleagues in the National Rural Network to try to highlight the good work that is done under LEADER, the good examples of projects that are delivered, so that people do not have that fear factor when it comes to accessing the funding. It is a unique and beneficial opportunity for rural areas.
We acknowledge that there is still more to do. We continue to engage with all of the local action groups to see if there are areas where we can improve. Only this week, there were suggestions made to us about assessing the tax status of applicants, which we are looking at and which we can further simplify. We will continue to do that, particularly in the context of the next programme. During consultation on the next programme over the next months, we will be listening to see if there is more that we can do. We would welcome any suggestions from any members of these committees as part of that process.
Deputy Martin Kenny mentioned the new structures involving the local authorities and the local community development committees. With every new model it takes time to bed down and deliver. There are a few things that are important to remember as part of the new process. The local development companies or LEADER companies, as everyone would know them, are still delivering the programme on the ground. They are still the ones engaging with potential applicants when they come in to access LEADER. The county councils are now involved but rather than seeing that as a negative, I would see it as a positive in a lot of areas. They are working with potential applicants in areas where they have expertise, such as in procurement. There is something that the local authorities can bring to the party and I think they are doing that in a lot of areas. When we look at the average level of approvals across the country, at the end of last year it was around 38%. There were 15 local action groups that were above the average in terms of money allocated to project, and all of them were the new model of the local community development committees. Those figures demonstrate that it can work and is working. Like everything else, it is a work in progress and we continue to engage with all of the local authorities and local community development committees to improve the delivery of the programme where we can.
A lot of the issues I wanted to raise have already been dealt with. In respect of young farmers, it is positive to hear that the officials are trying as best they can to support young farmers. In the plan that is to be submitted before January 2020, what extra additional plans are being put in place to support young farmers? We know there is the national reserve and the TAMS, which have been mentioned. We need to see greater incentives for young people to be active in farming. The rate at which it is happening is low and it is difficult for young farmers. What additional plans are the Departments trying to put in place to support young farmers in the context of the next CAP?
Convergence was mentioned in terms of moving towards 60% this year with a minimum of 75%. Obviously we want to try to support family farms, small and medium sized farmers and also part-time farmers. This feeds into difficulties around certain definitions. It is crucially important that we support family farms and small to medium-sized farms.
There is a lot of information out there in terms of nutrient management plans. What can we expect in terms of lead-in time? We have seen certain issues and difficulties associated with this requirement for GLAS and its impact on farmers. What have we learned in terms of making sure there is a lead-in time for farmers? Overall, we know the CAP is crucially important for rural areas. We do not like to hear of cuts in it and we know the officials are doing their best to make sure that does not happen. In the context of Brexit, it is exceptionally difficult. We know the issues already in respect of the beef sector.
On LEADER, I was happy to hear that the Department is trying to work with community groups on their applications. We need to acknowledge that many of the applications that go into LEADER are from people working on a voluntary basis in the interests of trying to improve their local areas. We do understand there have to be checks and balances and processes in places: there has to be accountability. However, from a bureaucracy point of view, whatever measures can be put in place to support people and community groups in making successful applications need to be strongly included in the next rural development programme.
A lot of my questions have been asked and answered. I turn in particular to the very difficult situation that our beef farmers are in. It is very much the case that they are responding to Government policy in terms of Food Wise 2025. They have been implementing environmental measures, including those that would see a reduction of greenhouse gas emissions. Notwithstanding all of that, every other week agriculture and farming seems to get hammered in the media. It would make one fearful about what price we are going pay in respect of measures to counter climate change.
It would make one fearful about what price will be paid on our part for measures to counter climate change.
Mr. Hayes stated that while his Department is defending agriculture and doing its best, and that the Common Agricultural Policy, CAP, is very important, there is another concern that there could be a reduced payment to farmers. Many farmers in beef, especially suckler farmers, would not make any money except for farm payments. We can add Brexit and depressed prices to that. Fundamentally, there is a bigger issue, notwithstanding the fact that the witness welcomed the proposals under CAP to address issues like climate change, biodiversity and water quality. Farmers would be paid for these and it would represent a so-called greening of the CAP.
There have been reports, most recently in The Lancet, that question the order of farming. There will always be challenges and we must listen to them but what position does this put farmers in? We all recognise in our discussions the importance of carbon efficiency in farming and the room and willingness required to improve. Under the Paris Agreement, we will get no recognition for that. A carbon-efficient farmer in our country will not get any particular recognition, although he or she may get payments in the new CAP and so on. Nevertheless, we are not being recognised for what we bring to the table. One interesting point in The Lancetreport is that food is beyond a technology matter. As human beings, we need food in the form of protein and balanced diets. We all accept that. One of the proposals was that we would seek to have a Paris-type food discussion to get to the bottom of this. As I stated, there does not seem to be recognition for what we are doing. If we pull out of producing a certain type of food, somebody else who is less carbon-efficient could fill the gap in the market.
If there is a genuine concern about addressing the matter, it must be done at a global level. We must look at food waste and biodiversity beyond the generality of the Paris Agreement. It could only serve us well and at least we would get a fair chance at fighting our corner. Professor Gerry Boyle in Teagasc has stated there is inconsistency or incongruity in the trajectory under Food Wise 2025 for the increase in the national herd and our greenhouse gas emissions. It remains the elephant in the room. It does not seem that our interest or what we have been about here is very well protected. As I stated, there is no special recognition for the effort that has been made.
How are the negotiations with the Department of Communications, Climate Action and Environment? Will the witness be quite specific about that? For a long time we have been hearing generalities and arguments that we must do something, efforts must be made or we will play our part. What is that going to look like? Is the Department negotiating particular ceilings for production targets? What is the blueprint looking like arising from those discussions? What practical negotiations have taken place and what is the current position? What will be the next steps? What does all this mean for farmers? It is a very confusing and frustrating time for them. A number of colleagues have mentioned that because prices are so depressed, many young people will not want to get involved anyway. There are many issues to be dealt with and there are many questions as well. We must stand up and be counted. If we are to stand behind our comments on agriculture and food production, we must fight boldly and be proud of the food we produce in this country.
I welcome the witnesses. I am seeking a little more clarification on some of the matters discussed. Most areas have been covered. Will this get over the line by 2020? The witnesses have outlined the current position, and if Brexit goes the way some people are predicting, we are facing the possibility of all hands being on deck both here and in Europe to deal with the issue. The elections for the European Parliament will happen in May and there is a possibility that it will be a totally different make-up from what is there now. How might it affect the sealing of the CAP before the 1 January 2020 deadline?
That is the deadline from the subsidiarity perspective, with each state lodging a strategic plan that must get Commission approval. What guidelines have been received from the Commission on writing the plan? How much freedom is there in what can be proposed from an individual state's perspective? There would have been some communication with the Commission on that, so what approach are we taking? Are we approaching this with a green jersey or in a bureaucratic fashion? Will our proposal help to simplify CAP? The word "simplification" has been used a lot, but from my experience, as has been echoed by numerous contributors, it seems that every adjustment to CAP makes it more complicated rather than simplified. From my experience, much of the complication is from our own side. I use the targeted agricultural modernisation scheme, TAMS, as an example, where we have set grant specifications from the building side and our inspection regime has really complicated the process. It prohibits a number of people from even applying, never mind being able to draw down funding. The grant specification on some of the farm buildings means a farmer could build two sheds for the price of one if he or she did not bother looking for the grant. I am wary of the subsidiarity aspect because of my experience of how we handled things on our side in the past. We have been the cause of complications at times.
We are net contributors now but there is a debate on the CAP budget being reduced. We are leading the charge around Europe that if we increase our contribution to the multi-annual financial framework, MFF, we would at least come out with a similar budget to what has gone before. I am led to believe that even if we are successful in getting other countries to agree to increase their contribution to the MFF, there is no guarantee it would go towards the CAP. We could end up paying more and, having led the charge to achieve this, other member states could get money diverted to the likes of migration and defence issues. Should we be careful what we wish for with respect to increasing contributions to the MFF? Is there any guarantee that if countries row in behind us, this will come back to the CAP budget?
If we are net contributors, would we not be better advised, as a nation, to hold our money and put it directly into Pillar 2, where we are allowed a little more freedom? We could get full value for it here rather than sending it to Brussels where it might end up in an area where we had no intention for it to go and where it would not improve the CAP. If I could get some clarification on those matters, I would be happy.
Before going back to the witnesses I have a couple of further questions on the general discussion. With generational renewal, we have heard over time in this committee that, not just in Ireland but around Europe, there is an exodus from farming. It seems 1,000 farmers per week are leaving the industry in Europe, which is a huge number. I have spoken to young farmers and young people involved in farming and all they want is a decent price for their products. As well as the added financial benefit, what else could come with CAP to incentivise young people to get involved with farming and see it as a sustainable future for them and their lifestyle?
Currently in Pillar 1 there is the element of 30% greening. A new architecture is required that was outlined in the opening statement for Pillar 1 post 2020.
Correct me if I am wrong, but that must be in place by the end of the year. If that is the case, what work is being done and what criteria will be used to put that architecture in place? Has the Department been given any indication of the criteria that may be required to put it in place as we move forward?
Mr. Colm Hayes:
I thank the Co-Chairman and members. I will try to deal with the various issues as they arose.
Senator Hopkins asked about further supports for young farmers during the lifetime of the current CAP. She and I both noted that supports are already in place, such as the national reserve and the TAMS, and we will continue with them until the end of the current CAP. Before I arrived at the committee, I had a glance at the TAMS to give an example of supports for young farmers. Approximately €48 million of what has been spent on TAMS has gone to the young farmer scheme, which is close to 45% of all TAMS money thus far. That is a direct route investment support and a vote of confidence by the Department in the future of young farmers by prioritising and incentivising them through a higher grant rate. For another example, last week the Minister announced the reopening of the national reserve, which is also of benefit to young farmers. Furthermore, there are the taxation measures that we discussed previously.
In regard to the next CAP, we touched on that earlier. In addition to the 2% obligation for young farmers, we are very much of a mind to continue with those young farmer supports, within the parameters of the regulations, the policy decisions and the available budget, and the Minister has been very public in that regard. Everybody recognises that there is a generational renewal issue on farms. A larger issue, however, which the Co-Chairman touched on, is farm incomes, which are the driver of whether a young person may or may not want to take over a farm or go down that line of work. It is outside of all of our control, aside from the parts to which we can contribute, but it reinforces the point we are all making of the importance of a strong CAP budget, which is the ultimate insurance policy if going down that route. There are also differences in incomes between individual farm sectors. I am sure these are all factors taken into account by intelligent young farmers when they consider that line of work. All we can do is outline our indicative commitment to consider a continuation of those individual supports.
Senator Hopkins also raised the question of the NMPs. We have received approximately 50,000 NMPs from GLAS farmers. As I referenced in my opening remarks, the requirement to have sustainability tools such as NMPs for all farmers next time around might not be the most efficient approach on the basis that an NMP will probably deliver a more benefit to a farmer of an intensive farm but less to one of an extensive farm, for which something else might be more appropriate. That flexibility is currently not in place but we are raising it and pushing for it. One-size-fits-all might not be the best approach.
Senator Hopkins also made a general point about the speed at which schemes got up and running under the current RDP, which we are also very aware of. There were delays as we went along and we do not hold ourselves up to be perfect in that regard. Lessons were learned for the next time around. As much continuity between the schemes as possible, and as smooth a transition as possible, will be a great help, not only for the participants of the scheme but also for us in our systems, controls and obligations. If I am correct in presuming that was the point the Senator was making, she is right. Lessons were learned and we will bear them in mind next time around.
I will not focus on beef prices because they are a separate discussion, but on Senator Mulherin's question about what is in place for beef farmers in this CAP or the next, the scheme of the current CAP shows that beef farmers enjoy participation in the €300 million beef data and genomics programme. Beef farmers are the predominant participants in the GLAS scheme, they are in the organic farming scheme, they are entitled to TAMS and a new €20 million beef scheme was announced in budget 2019, which we expect to be launched in the near future. I reiterate my main point, namely, the importance of the CAP budget, but I think the Senator was raising the issue of the importance of supports for beef farmers and of whether those supports are enjoyed by market returns, which we are very much aware of.
Senator Mulherin also asked a detailed question on our level of engagement with climate change policy, the Minister for Communications, Climate Action and Environment and his Department. I know it is not the core topic of the meeting but I might pass to my colleague in a moment for a brief update.
Senator Paul Daly made a point about timelines, and the answer is clear. We are working on the basis that the deadline is 1 January 2020 because that remains the deadline, although it was set at a time when everybody thought the regulations would be resolved by now, the budget would be in place and the European Parliament and the European Council would have their work done. There is no question of whether our feet are to the flames in terms of what we have to get done. We have started some internal work on a SWOT analysis. As the committee will know, we have also tendered for consultants to advise on an intervention needs analysis, which is one of the requirements for member states. We expect to appoint the winning tender around the middle of February and the tender will then start to engage in a more intensive way with stakeholders on what the schemes might look like. If one factors that in, along with the obligations on us to take steps such as an appropriate strategic environmental assessment and the fact that the budget might well not be concluded until very late this year, which appears to be a live possibility, it is clear that we are all up against it. Nevertheless, we are working on the basis that the deadline is the one we must meet.
Mr. Colm Hayes:
That is always a possibility but nobody is discussing that option because, naturally, the main institutions want to keep the focus on the current regulations. Whether or not that scenario comes to pass, our emphasis will be on achieving as smooth a transition as possible for the individual scheme participants because we know that in times past that has not always happened. For a transition, there will need to be transitional regulations and guidance from the Commission, which we do not have, and there would need to be a clear indication of what the budget might be. For now, the focus is on the 1 January 2020 deadline, while the focus in the institutions is on getting the regulations finalised.
On Senator Paul Daly's question of what might go into the CAP strategic plan, we have guidance from the Commission. It appears that the CAP strategic plan might have to be 300-odd pages if we were to fill in all the blanks, which is another indicator of the complexity involved. That guidance frames our own SWOT analysis and the intervention needs analysis that the consultants will be asked to do with all the various stakeholders.
On the question of whether putting more money in will allow us to get more out, the Taoiseach has commented directly. If we are investing more money, it needs to go to those initiatives and schemes which have delivered for member states, which is a clear and explicit reference to CAP on our part. That is our guiding principle because we get our added value from the EU fund. As I mentioned, 80% of EU funds that come to Ireland come through CAP and, therefore, I fully agree with the Senator's point.
I might ask Mr. Nolan to comment on climate change.
Mr. Jack Nolan:
On Senator Hopkins's point about NMPs, there are 800 agricultural advisers who are trained by the Department of Agriculture, Food and the Marine. If they get an opportunity, which, I hope, they will under the new CAP, there is much money to be saved through NMP. The price of fertiliser has risen by €50 or €60 per tonne this year. Aside from the saving for farmers, if we can get them to use other substances such as clover, it will be beneficial to prevent climate change. We will reduce the use of fertiliser and we will get credit for it.
Are we getting credit for what we are doing to combat climate change? Last year, we exported €12 billion worth of agrifood under the Origin Green label, which is based on a clean green image for Ireland. I would say that we are getting credit for combating climate change at the moment. We are taking measures to reduce our carbon footprint all of the time but there are opportunities for improvement. We are trying to enter a premium space so that we are not competing with markets. The Senator, I think, commented earlier that if we do not supply food then it will be done in a more unsustainable manner in other countries. At the moment, for example, we produce 10% of all infant milk formula in the world, which is a significant amount from a small country.
Food Harvest 2020 set targets for an expansion of milk production, which we met last year, of 50% or 7.5 billion l. Food Wise 2025 is about increasing the value of our exports, which is done through value-added, that is, through getting into markets like China where our milk is regarded as a premium product. That is what the Minister has been doing. He has been getting access to these markets.
There is a lot more to do with climate change in which CAP will play a major part. There is also a role for industry and farmers to play. The Teagasc research has shown a number of measures to be effective. Reference was made to Professor Boyle. He has spoken about measures that farmers could pick up today. For example, the dairy economic breeding index, EBI, where one can use better genetics on farms to increase the milk yield. We know that not all of the increase in milk yield has come from increased herd numbers and a good percentage has come from improved genetics. We could make better use of fertiliser. We have a huge problem with soil fertility in Ireland. Soil fertility levels today are the same as they were in the 1950s. When one considers the increased level of production, one will see that there are huge savings to be made. There is also savings to be made in the amount of crude protein and feed given to animals. We are feeding too much protein to animals and if one puts in too much protein then it comes back out again. These are things that farmers can do without support. We have in place significant supports in the targeted agricultural modernisation schemes, TAMS, for low-emission slurry spreading equipment. We also grant aid storage. In the future there will be a drive towards probably covering stores because of ammonia problems.
I remind members that as agriculture makes up two thirds of the land area of Ireland, what we do on land has a major impact. The last water quality report showed a 3% disimprovement in water quality and, therefore, we need to take action now. CAP is slightly down the road. It is not going to solve all of the problems but is part of the answer.
What are we doing in the Department? We provide a free sustainability advice programme in certain catchment areas, in conjunction with the Department of Housing, Planning and Local Government. The programme provides free advice to farmers to cause behavioural change. We do so because change is not just about financial incentives. People must understand why they are being asked to do something and buy into it.
On the TAMS specifications, unfortunately, as was seen last year during the snow storm, a number of sheds collapsed. The specifications that we have in place are very good. The costings were reviewed on the TAMS grant last year and updated where needed. The specifications are reviewed on a regular basis. I believe that the specifications that we have in place are necessary and serve an important purpose. I mean that we guarantee farmers that if they build to specification, they will have a shed or tank that will last.
Mr. Jack Nolan:
There is no outcome yet. We are engaging, like other Departments, with the Minister. He has asked Departments what is happening and we have a lot happening, as I have outlined. We believe that in the future, the CAP and the implementation of the marginal abatement cost curve or the measures Teagasc has arrived at through research will deliver it. That is what we are saying to the Department of Communications, Climate Action and Environment.
Mr. Jack Nolan:
Yes, they are. In the future there will, potentially, be more measures as research is ongoing. Teagasc originally produced the marginal abatement cost curve seven or eight years ago but it has updated the data recently. We are saying that these measures need to be implemented on the ground and as they are implemented, we will see an improvement, along with forestry, as was mentioned earlier. There is also potential for carbon sequestration on peat soils. Certain peat soils, comprising approximately 40,000 ha where there are high organic matter levels, will store carbon.
Mr. Jack Nolan:
Negotiations are ongoing. There is no sectoral target. The Minister wants to know what each Department is doing and are they committed to it. My Department has clearly shown that we are committed to it. We want to continue producing high-quality food but in a sustainable manner because if it is not produced sustainably, we will not be able to export our product, which is what we do with most of our food - we export it.
I apologise for my absence but I had to step out of the meeting. Most of my questions have been answered. However, I have a few questions on the strategic plan. How much will the strategic plan cost? I ask the officials to again outline the following. At what point will we have the first look or draft in order that we can feed into it? Until we have the draft we will be talking in a vacuum.
In terms of Brexit and the UK's withdrawal from the EU, do the witnesses think that farm incomes or direct payments will be reduced in the next round of the CAP?
My next questions are on the strategic plan and its timeframe. Is it likely that the plan will lead to delayed payments? How can we avoid payments being delayed?
On the LEADER programme, has the way in which this programme operates been reviewed and who has been consulted in that review? Can we study the review to see if the amalgamation with the local authorities has worked in favour of people? I have two main criticisms of the LEADER project. First, there is the added bureaucracy. Some of the processes involved 17 or 19 steps, in the first instance, before one secured grant approval. I think that aspect has been addressed somewhat by officials.
Second, I am concerned that we have lost the opportunity for many good businesses to start up because the animation is not there that existed under other programmes. While the LEADER programme was with the local companies one was able to have a person work, at the pre-development stage, on developing the business on the ground. Has the scheme been evaluated?
I ask the officials to remind me again about how much money was provided by the last LEADER programme. How much money will be provided in the current LEADER programme? If all of the money within this LEADER programme is not spent or drawn down by the deadline, how will it be reallocated? When will the decision be made about reallocating the money? What criteria will be used for the reallocation?
As mentioned, simplification is one criterion that we are trying to address within this project. The introduction of salaries and different measures, even what we have talked about at this earlier stage, suggests to me that there will be even more bureaucracy than existed under the previous CAP programme. The added bureaucracy worries me.
I wish to ask the officials about the increased funding for the areas of natural constraint, ANC, scheme. The IFA or the Irish Natura and Hill Farmers Association, INHFA, called for €300 million to be added to the scheme to address the fact that an additional 4,000 farmers have joined the scheme. I cannot leave here without asking the officials what scheme will follow the agri-environment options scheme, AEOS. Many people have left AEOS and do not have anywhere to go.
I thank the witnesses for their presentations. I have a few quick questions for Mr. Hayes. In the submission the Department will send to Europe, has the Department considered different scenarios? Has it considered front-loading to help family farms? There is talk that between a front-loading of 20 ha or 30 ha may help family farms. Has the Department considered the option? There is a worry not alone in Ireland but throughout Europe with the current proposal and the amount of bureaucracy. A lot of amendments have been lodged in Europe. Is the Department concerned that the bureaucracy that will be involved in the paperwork, with regulations and all of that, will make things more difficult?
Is any consideration being given to the idea of designating areas of the country for payments? Is the witness talking to the National Parks and Wildlife Service? I believe it should have its own budget.
Young farmers were raised as an issue earlier. I am aware that the EU is looking at new schemes to try to attract young farmers. As the Co-Chairman pointed out we are losing farmers at an alarming rate throughout Europe. Is a loan scheme being proposed for those young farmers to help them access money at low interest rates? It might help them to make their farms a bit bigger. Is the Department considering decoupling payments for the suckler cows?
Most people will say that it is cumbersome to get through the LEADER programme. Can it be simplified further?
On the issue of climate change, it is fair to say that Ireland is under a bit of pressure at the moment. We are aware that people from other countries are questioning how green we are in terms of our method of beef production. Is it a concern that there are 315,000 cattle being produced in feedlots here? Will that be tackled under the climate action plan? In Pillar 1 an ecosystem idea was mentioned. What was meant by that? How will we address that?
On trees, there are some counties, as the witnesses know, where forestry has become an issue of concern. People living in those areas are getting less and less. Are the witnesses looking for balance throughout the country, or are certain areas going to be taking the brunt of the development of forestry?
Why have we not spoken about anaerobic digesters or tried to promote them? That has been done in Northern Ireland but not in the South.
As Senator Conway-Walsh pointed out, there are farmers coming out of agri-environment options schemes, AEOS. GLAS has been rigid; if one wanted to make any kind of change in the GLAS scheme he or she would be pegged out of it. Is it envisaged that there would be a more flexible scheme?
Mr. Hayes spoke about the beef data and genomics programme, BDGP. The figures speak for themselves, considering how many beef farmers entered it and how many dropped out. We have the figures in front of us. The uptake in the beef sector has been disappointing. Farmers have valid concerns about it. Is there a simpler system which might help protect the beef sector? As was pointed out, some €4 billion worth of beef is exported out of this country. We can do it better. It is correct to say that cutting down the rainforest while there is green grass in Ireland is not the solution to save the world. People are going to eat regardless. There was reference to a report published last week which has been well enough discredited. One of the lead authors of that report is travelling the world on a jet costing €20 million and is taking exotic holidays, which speaks for itself. Are we looking at establishing a niche market in Europe? Do we want to be seen as the best at doing this in Europe because of our grass base - clover and other types of edibles were mentioned as well - rather than somewhere like Holland, the size of Munster, with cows looking out through a feeding barrier all day? Are we on a mission to promote what we can do best?
In terms of LEADER and cutting out the bureaucracy and the red tape and attempting to streamline the whole process, I am aware that the former Minister, Deputy Humphreys, pulled together a stakeholders forum a couple of years ago. A number of proposals came through that process and some changes happened which helped to streamline the process. In preparing for the next round, will some consideration be given to having a stakeholders forum to discuss the whole issue and to try to identify those particular issues? It could introduce proposals that the stakeholders have initiated. They have had engagements with the Department already, and many say that there are particular concerns about the Article 48 checks and how long it takes for them to go through. If there was a stakeholders forum where everyone could engage meaningfully it would be worthwhile.
Mr. J.P. Mulherin:
There were several questions about the LEADER programme. Senator Conway-Walsh asked about a review of the operation of this programme. There is an overall review - I believe it is called an enhanced implementation report - that has been contracted out to an independent consultancy to deal with the overall rural development programme. I believe Indecon is undertaking that. As part of it the operation of the LEADER programme is being reviewed. As part of that there will be surveys of the local action groups, LAGs, and the recipients, and they are having different working groups with different stakeholders to look at the operation of the programme. That is under way at the moment, and we await the outcome of that review.
Mr. J.P. Mulherin:
I certainly will. I am aware that the physical work the review group is doing, the information we have to provide and the completion of all the surveys has a deadline of the end of April. I expect the report will come shortly after that, but I will return with a firm date for the completion of the report.
In terms of bureaucracy, as was mentioned by several members, I have indicated some of the steps we have taken to address that issue under the programme. The idea of using development workers to work with businesses and communities to develop projects was mentioned. That is a strength of the LEADER programme, and has always been a strength. It continues to be an important part of it. A large proportion of the funding that is given by LEADER is for animation, and in most areas there are a number of different project workers who are working with potential applicants to develop their applications.
Deputy Fitzmaurice asked if LEADER could be made simpler. Everything can be made simpler, and we are continuing to try to make it a more efficient and effective programme. It is simpler now than it was before, in terms of what an applicant has to do now when compared with the last programme. We recently made changes to the checking process. It was previously carried out by Pobal, but from the start of next month the local authorities will be doing that at local level so that there can be more engagement at a local level rather than having to do it nationally. We have engaged with the stakeholders to see what more can be done. We continue to do that, and the chairman mentioned the forum held by the former Minister, Deputy Humphreys, in May 2017. We had another forum last September that was hosted by the Minister for Rural and Community Development, Deputy Ring. A big proportion of that event was looking at what we could do under the next programme. We have a number of ideas that have emerged from that. One strongly made point in particular was the need to have a simpler process for smaller amounts of grant aid so that those people would not have the same amount of paperwork to do as someone who is applying for a €200,000 grant. We will certainly look at that within the confines of the regulation for the next programme.
A Senator asked about the level of spend on this programme. The total amount spent over the last programme was approximately €366 million. The budget for this programme was €250 million. We expect that all of that money will be allocated by the end of 2020.
Certainly, some of the payments would run into 2021 and perhaps 2022, but we continue to monitor that. We will review it towards the end of the year when we will have a better idea of exactly how long it will take to draw down all of the fund. Our expectation, however, is that all of that funding will be spent.
Mr. J.P. Mulherin:
That is a political question for the then Ministers. One must look at the size of the overall rural development programme this time around compared to the previous time and the different funding percentage that was made as part of that. I was not there at the time and I am not aware of the full size of the previous rural development programme. Certainly, the allocation for this rural development programme, at 7% of European funding, is higher than the minimum that is required. I believe it is not dissimilar to what was done previously but I would need to check the figures on that and come back to the Senator.
Mr. Colm Hayes:
I will make a couple of general points on the CAP strategic plan, on which Senator Conway-Walsh asked questions. To make one general point, nothing will be submitted to Brussels by way of a new CAP strategic plan without full consultation with anybody who is interested. It is not the case that we will go off now, write a CAP strategic plan and submit it to Brussels without any reference to what anybody on the ground thinks. I do not have details because we need to consider in more detail what formal consultation we might undertake. We are looking at different models. I will inform the joint committee as soon as we decide on what that formal consultation will look like. I return to my original point that we are constantly engaged in what could be described as informal consultation where we meet various groups which have an opinion, one way or the other, on what the next CAP might look like. That consultation remains open.
To clarify an issue on late payments, the current rural development programme and Common Agricultural Policy run until the end of 2020. The idea is that the submission of the new CAP strategic plan by 1 January this year gives the Commission time to approve it. I believe the Commission has asked for seven or eight months to do so. We would then start to implement it and hit the ground running from 1 January 2021 in as smooth a transition as is humanly possible between the two CAP programmes. That is a challenging timetable, which is all I will say on that.
As far as I am aware, none of the schemes under the rural development programme cease at the end of this year. They all run until the end of 2020. The challenge will be the transition between programmes and submitting the CAP strategic plan on time.
Senator Conway-Walsh asked about the cost of designing this. Much of the initial work, such as preparing a SWOT - strengths, weaknesses, opportunities and threats - analysis, will be done in-house. We have, as I mentioned, tendered for consultants to take up the baton in terms of designing the needs analysis. That analysis will involve taking our SWOT analysis and information on what is needed on the ground in terms of environmental measures, farm incomes, what the market is supporting and not supporting and various other factors and coming up with ideas for schemes. We expect the consultants to be appointed in mid-February and we expect them to hit the ground running at the end of February or early March. They will obviously be engaged, in a format that has yet to be decided, in consultation with stakeholders. There will be many opportunities for anybody who has a view on this matter to make an input.
Mr. Colm Hayes:
I am satisfied we have the resources to do it.
Senator Conway-Walsh also asked a question on the areas of natural constraint, ANC, scheme budget and calls for an increase in it. Funding for the scheme increased by €23 million in the most recent budget. With the €25 million in additional funding provided the previous year, this amounts to an increase of €48 million in two years. That brings the figure back to €250 million, which was the pre-recession figure. I will not speculate on what will happen in the budget at the end of this year but the recent increase was a significant contribution by the Minister and Department to the ANC budget. Funding for the scheme is back to €250 million, which was what many stakeholders sought prior to the previous two budgets.
Mr. Colm Hayes:
As part of the redesign, the €250 million, as I said, is the figure for this year. I will not speculate on what will happen in the forthcoming budget but that call is known.
The Senator also asked about the agri-environment options scheme, AEOS. Everybody in that scheme was offered the opportunity to transition into the green low-carbon agri-environment scheme, GLAS. Not everybody availed of that offer for a variety of reasons, although some did. However, the AEOS scheme has concluded now. It was transitioning from the previous rural development programme. It goes without saying that anybody in AEOS will have an opportunity, if he or she did not avail of the opportunity to come into the current GLAS, to apply for the next agri-environment scheme in whatever shape that takes under the next CAP.
Mr. Hayes stated that everyone in AEOS had the opportunity to transition to GLAS. Some of them were not suitable for GLAS and that scheme was not an option for many of them. This is quite serious. Mr. Hayes is saying they will have no scheme available to them until after January 2021. They must operate for the whole of this year and next year without anything to replace AEOS.
Everybody had the opportunity. The issue is that someone may have been in AEOS for three years when the opportunity to jump arose. Those who wanted to stay in AEOS no longer have that opportunity. We had a budget of between €15 million and €20 million when AEOS was in place. If someone jumped from AEOS to GLAS, the funding was to be taken from GLAS and the farmer had two years left of the other funding. Where did that funding go?
Mr. Colm Hayes:
They were offered either a five-year GLAS contract or to stay in AEOS. I cannot account for everybody's choice. However, they had the choice. I am not sure we could have done anything more than offer them the choice at the time. If they joined GLAS, by the way, they have a contract that brings them right up to the end of 2020.
Mr. Colm Hayes:
There were limits but it was open to everybody, including those who were in AEOS, to join the scheme. I am satisfied the Department did its duty in terms of those who were in AEOS. In addition, the implications of not transitioning to GLAS were made clear to all those who were in AEOS at the time.
Mr. Colm Hayes:
I mentioned earlier the review of rural development programme expenditure which the Minister, Deputy Creed, brought to this committee in June last. We are updating this to factor in the end of year expenditure for 2018 but the review the Minister presented made clear that we are on track to spend more than the allocation in the RDP.
Mr. Colm Hayes:
That is correct. Our initial analysis, which needs to be updated to include the end of year expenditure for 2018, is that the figure is more or less holding. Schemes are levelling out and the figure may reduce a little. The point, however, is that the Minister is consistent when it comes to calls for new investments, new schemes and new entrants under the RDP. The full allocation under the RDP will be spent but there is no funding available for additional investments.
Mr. Colm Hayes:
Yes, if it continues into the next RDP programme. That transition between rural development programmes is normal in that people have contracts that continue. The overspend under the previous programme was much larger, at approximately €600 million. Given the uncertainty over the budget this time around and everything that has happened, it is prudent to keep the overspend at the most manageable level possible. I can give an undertaking that when we conclude the updated expenditure review of the rural development programme we will communicate it to the committee.
Mr. Colm Hayes:
On the question on the designations and the NPWS, it is a common feature. I have appeared before the committee to discuss the issue. As a Department, we do not decide on designations. It is a matter for the NPWS. What we have done this time around is work with schemes with particular reference to farmers in some of the designated areas. I am thinking in particular of the €25 million hen harrier scheme. One of the things we like to champion about the current rules in the programme is the locally-led EIP schemes. We are considered one of the leaders in Europe for the design and implementation of these schemes. We have 23 implemented now, which cut across a range of environmental-----
-----the locally-led schemes? In fairness to the Department, when it puts out a scheme the amount of money held for administration is not the same amount as in locally-led schemes and what consultants are given.
Mr. Colm Hayes:
There is a trade-off here in that the idea of a locally-led scheme is that it comes from the local area. We have some fantastic examples around the country. We had something like 120-odd applications and we could have gone with any one of them. Narrowing it down to 23 was a real challenge. Those 23 are the crème de la crème. The point is if we are going to design and implement a scheme on a local level, we will not get the efficiency of administration we get when we run a GLAS scheme out of Wexford for 50,000 people. That is the trade-off. It is an accepted trade-off across the EU for these schemes. Results-based schemes work. They allow local communities to engage in a really productive and innovative way with the CAP and the RDP. There is no question but that they will continue under the next CAP and we will certainly be a supporter of that.
The issue of forestry concerns and the balance of planting is not a CAP issue per sebecause the forestry programme runs outside the CAP programme. It runs for the same period. The national forestry programme runs up to the end of 2020 as well. The current thinking is it will continue next time around so there will be a national forestry programme because there is a public commitment by the Government in the national development plan to have a national forestry programme that is publicly funded from the Exchequer next time around. That is the thinking. That said, we see a lot of scope for the planting of trees under the agri-environment schemes in particular next time around for the very obvious reasons that the planting of trees delivers benefits in terms of the protection of water courses and biodiversity. That integration between the two programmes is something we are actively looking at. There is some planting of trees under the current GLAS schemes.
Is it correct that one has to have 5 acres when one is planting? What about when there is a group of trees in the corner of a field? Could one put 50 or 100 trees in a corner or along a ditch to bring it to an acre and get paid for that acre? It may help in climate mitigation if one wants to go down that road but also people would not be tied to having 4 acres or 5 acres. Will the Department deal with an acre?
Mr. Colm Hayes:
The 5 acre figure sounds high. I am almost certain we fund forestry proposals for a lot less than 5 acres under the forestry programme. There are obvious benefits to the planting of trees under agri-environment schemes that we all need to consider, as the Deputy said, such as planting along water courses and in corners. One of the initiatives we have pushed heavily this year under the mid-term review of the forestry programme is agri-forestry which is exactly like the Deputy said. It involves planting in strips, which still allows grazing by animals. It still allows harvesting of silage and forage. It is something we have not engaged with. It is more common on the Continent. We have not engaged with it to a great extent. We have tripled the rates under the forestry programme for it. It broadens out the forestry question and it is something we want to drive next time around. That thinking in terms of what role the planting of trees might play under agri-environment schemes is something we need to give a lot more consideration to.
I will ask my colleague, Mr. Morrin, to respond to the question on the front-loading.
I do not think the Deputy was proposing coupled supports but it was mentioned. We have a longstanding policy here of not having coupled supports under the CAP. We have one exception to that, which is the protein aid scheme but in terms of livestock it is not something we have done for a long time now. The Minister has been very clear on this in the face of calls for €200 payments for suckler cows and that kind of thing. If we are to fund that, it has to come from the overall envelope which could mean a linear cut to everybody's payment. It is effectively a coupled support. Is that the best solution? Is it the best use of money? I think the Minister was quite clear on that. From an environmental point of view it is the best thing to do. It is essentially incentivising - or forcing - people to retain animals they may not otherwise want because they want to be part of the scheme. I do not see us in any way going back to the days of coupled supports under the next CAP and the regulations do not allow for a lot of it anyway.
I will ask my colleague to provide some detail on the question of front-loading and redistribution.
Mr. Fran Morrin:
The Deputy asked a question about front-loading. The new regulations propose quite a degree of flexibility around front-loading. One could load the first 10 ha or hectares five to 20 and so on. There is quite a lot of flexibility. One of the technical challenges associated with it is that a large proportion of farmers have different values or sets of entitlement values. There might be one set of entitlement, for example ten entitlements at €110 and another set at €156 and so on. There is a question to be answered there if we do front-load, how do we do it? Which values should be loaded? Is it the average or the highest? The possibility is there to do it.
I will address some of the concerns various members raised about protecting medium sized farms. The proposals allow for a redistributive programme as part of Pillar 1, specifically refers to the redistribution of income from large farms to small and medium sized farms. We will be looking very closely at how we do it.
Mr. Jack Nolan:
On the forestry, it is equally distributed around the country. Under the most recent environmental scheme, 1.6 million trees have been planted already. There are excellent innovative schemes in forestry such as native woodland schemes and so on that are there on the Department's website and it is being encouraged all the time. The Deputy raised the question of feedlots. Ironically, the majority of feedlots are derogations. Today the Minister announced a review of the derogation conditions. There will be more asked of feedlots. The Deputy asked why derogations are not more widespread in Ireland. He referred to Holland. In Holland there is an indoor system where more slurry is produced. Only 10% of methane in Ireland comes from slurry. They are not really viable from an agricultural point of view. There are ten that are regulated by the Department of Agriculture, Food and the Marine from an animal by-product point of view. The Deputy asked if we are promoting. We are promoting a grass-based system around the world. This year one of the co-ops broke away from Ornua to go with a grass advertising campaign in the United States. In Germany we get twice the payment for Kerrygold butter as for native German butter. There is definitely a huge push and appreciation for grass. That is what we have to protect.
With regard to anaerobic digestion, there will be a support scheme for renewable heat later on in 2019. We will be supportive of that but it is run by the Department of Communications, Climate Action and Environment. It is really for divisional heating systems. There will be more developments in this area.
At the moment, it is not suitable for the majority of farms in Ireland. Farms are smaller.
On digesters, would it be used where one can put in grass or slurry? If one produced gas, could one sell it to the grid or put an engine in front of it to generate electricity? Will it be all the district heating system, which, let us be honest, will probably not work?
While this is a useful and worthwhile discussion, there are so many issues that we could be here all night. When we look at the big scene and the CAP, we all agree with the need to deal with environmental and climate change issues. At times, they are separate issues. We must also recognise mair, a chapaill, agus gheobhair féar. In other words, the farmer needs income support if he is going to be there at all. If there are no farmers, there is no environmental protection, in particular in upland areas. It is incredible that in 2027, we will be basing single farm payments on something that happened in 2000 or 2001. It is equivalent to basing grants in 1960 on what happened in 1933. It is the same timespan. Nobody in his or her right senses would say there had not been monumental change in that time. There has been monumental change in our time also. One of the monumental changes is this but what is constantly ignored is the issue of high-nature farming. If one does not farm high-nature non-productive areas, in purely agricultural production terms, Europe will not be willing to fund the gap. If we want to keep people in the less productive areas, we cannot give the best grants to the people with the best land and the worst grants to the ones with the worst land and hope they will all continue to farm. It is not going to happen.
The second issue with regard to CAP is what I hear about simplification. Everything gets more complicated, however. Two years ago, one could send in an area aid form oneself, but now one has to get a planner to do it. If one does not have broadband in rural Ireland, which many do not, or is not familiar with the Internet, which many are not, one must get someone to do it for one.
I put something to the witnesses that is rarely looked at. I take the example of someone with an excellent farm. He or she could get up to €60,000 to €80,000 in BPS for greening alone. It is a scheme with a very low compliance cost. One can name one's number - €60,000 or €80,000 – one gets one's grant and is out the door with one's cheque. One has complied with one's obligations and got one's cheque. The stronger farmers I deal with would be lucky to have €10,000 out of BPS and greening. To make the other €10,000 what must such a farmer do compared to the farmer who gets €80,000 for BPS and walks out the door? What does the poor old guy at the bottom have to do? He gets €3,000 very handy with the ANC which has low compliance costs. He must have 0.5 livestock units per hectare and is through the gap. I accept that it is a good scheme, albeit there is not enough money. He cannot go beyond €3,000, really. He gets €4,000 out of GLAS, when it is open, but it is faoi láthair and locked out at the moment. For the first time ever, the environmental schemes are not coming one after the other, so that someone leaving one can join another. Now, one cannot get that. If one averages over ten years, one is not getting that over ten years. We talked about swapping from AEOS, but there was a cheat in that. The Department said "Give up a year of AEOS and we will give you five years of GLAS but then leave you hanging for two years". There was a good saving in that one. He joins the beef genomic scheme because he has a few suckler cows and gets €1,000. It is an incredibly high compliance scheme. By the way, the GLAS scheme requires one to have two planners if one is in the hills. One for the hills and one for the lowlands. He joins the knowledge transfer scheme to find that 40% of the money is not going to him but to the planner; good luck to the planner. He gets €750 out of that. He joins the sheep welfare scheme and gets €1,250. When one adds it all up, he has, give or take €50 here and there, €20,000 and is in six schemes. If he is lucky, he might have a locally-led scheme and will be in seven schemes and still have in and around €20,000. Compare that to my man or woman with the BPS and the one grant. We expect these people to live and to be viable at that. We have a big problem and need a fundamental debate on it. It cannot be a superficial debate and a question of leaving everything as it is, which seems to be the tone here today.
The next thing is as follows. Most high-nature farmers have done all they have to do. All they have to actually do is continue to do what they and their forefathers and foremothers did before them. Both were probably involved in the farm in one way or another. That is what we want them to do. We do not want them to do anything radical because we know the farming taking place 50 or 60 years ago was sustainable. Under the old REPS, one got paid because it was an area based scheme. If one's farm complied with good farming practice, one got paid. Some genius woke up one night and thought that was too handy for a man or woman who was already doing everything right. It was decided to make it more difficult and a measure scheme was brought in. That means one has to do this, that and the other even if it is not needed on one's farm. If one cannot do this, that and the other, one does not get any money. For high-nature farming, we should go back to the area based scheme whereby one is paid on the hectares. It could be done according to a model. If it is like that before one starts, one gets paid for continuing to do what we want people to do, that is, continue with best practice. We are not asking them to do more.
It was stated in the very interesting script we got today that 5% of the RDP will have to be allocated to LEADER. If that had been in vogue before this year's allocation of €250 million for LEADER was made, would the money be up or down from where it is now? That is to say, is the current LEADER money more or less than 5% of the RDP money this time?
I support completely a limit on CAP payments simpliciterof €60,000. I have been in favour of that and in fact previously said the limit should be €50,000. However, I will not fall out over €10,000. I also favour a review of having EPS payments related to something - stacking everything into account - that happened back in 2001. There seems to be some suggestion that people will be means tested for farm payments. However, the worse one's farm, the more one has to have an off-farm income. If one has 1,000 acres, it is easy to be a full-time farmer. If one has 20 acres in Connemara or even 40 acres in Ballinrobe, where the land is much better, one will not live off it. We had this before for areas of natural constraint many years ago when it there was a disadvantaged area payment. There was a means test on it but someone brought it to court because the spouse's or partner's income was being taken into account and that was ruled illegal. We need to get some facts around the thinking here. I foresee a time bomb that will be very dangerous.
I wish to speak about CAP funding. While for some reason this is quite controversial, to me it is common sense because I just like looking at money. The officials have told us that if we continue as we are going with what seems to be coming out of the CAP, we will be €47 million short. They also said the Exchequer could top up and provide the €47 million. Is that not correct? The officials need not answer at this stage. If it topped up Pillar 2, it is €47 million; I cannot see how it is anything else. An increase in the ANC would immediately help 75% of the farmers in the worst land in the country: with 75% of the land being bad it gets them an extra payment. It is very simple with very little bureaucracy and there is not really any limit on that scheme which can go up to €250 per hectare.
On 18 December I received a reply to a parliamentary question from the Minister for Finance with the figures for 2017. I think it is bigger in 2018 but we do not yet have the figures for that. The reply stated that in 2017 gross receipts for Ireland from the European Union were €1.7 billion, the vast majority of which came through CAP. That includes moneys coming directly to Ireland but not going through the Exchequer and about €1.6 billion going through the Exchequer. Our gross contribution to the European Union was €2.016 billion with a net contribution of €308 million. We paid in €308 million more than we got out. That means that for every euro we pay in we only get 85 cent back. Those figures are backed up by the Department of Finance. Anybody who wants to dispute those figures can ring up the Minister for Finance and not me.
At a previous committee meeting we were advised that only 30% of the money paid into Europe actually goes back out in CAP. Much of the other money being paid in would not come back our way at all. Based on the two possible approaches my calculation is that we could put €47 million in and it costs us €47 million or put it in through Europe and we will have to put €156 million in to get €47 million back. I know that for some reason this is considered revolutionary; it is considered outrageous talk. I see no reason to lose €100 million net for some irrational principle that somebody seems to have.
Why does the Government not give a commitment to make up from the Exchequer whatever shortfall happens in Europe? It is the cheapest method of delivering it and by far the most efficient. It also gives us maximum control over the scheme because the less money we get from Europe, the more control we have over the scheme and the more we can avoid some of the more archaic, bizarre and irrational rules made by Europe that do not suit our situation at all.
Senator Conway-Walsh spoke about the process for the CAP strategic plan. What is the timeline for the public to make an input to the consultation? The officials said they meet some people but what about others? As Deputy Ó Cuív said, we need a monumental shift in how we do things. Food Wise 2025 envisages a 60% increase in agricultural production. We will have a 30% increase in greenhouse gas emissions as a result of our agricultural production. How can we square the circle? The existing policy is all about increasing production. I cannot see how that will decrease our greenhouse gas emissions. We now have an incredible opportunity in the drafting of the CAP strategic plan to look at our climate-change commitments and how we do things. It is critical for the Department to engage with a wide array of stakeholders. There should be a timeframe so that the public or stakeholder groupings can have an input at this stage.
The contributions from the floor have outlined the difficulties people have in applying for the LEADER programme. The bureaucracy has put many people off seeking funding. Has an audit of the projects funded to date been carried out? A witness mentioned some process with Indecon. Is anybody looking at the projects that have had funding from a climate perspective? How efficient have the projects that have been funded been? Have they enabled us as a nation to offset carbon emissions in a positive way? Have any climate-change criteria been set? Have any assessments been carried out on former projects as to how they have or have not helped with climate change? We need to ensure that some climate and greenhouse gas emissions criteria are built into future LEADER projects.
The discussions have been based mainly on the CAP programme. With many farmers' incomes under severe pressure currently, we need to protect the family farm. In recent years the way a number of CAP programmes have been rolled out has meant that in many cases farmers are forced out of their family farms to go to work. Is there anyone listening at all? I hope there is because I have a number of questions I would like answered. It basically forces the farmer to seek employment to pay the bills.
I will keep my questions short because Deputy Ó Cuív mentioned much of what I wanted to cover. Under the new CAP programme, will the single farm payment be capped at €50,000 to €55,000? The people I meet feel the savings should be distributed to the farmers below this level if that is the case.
There is some rumour afoot that farmers, who had to leave their farms to take up employment outside their farms to pay the bills, will be punished under this new CAP programme. We need clarity and assurance that these farmers will not be punished if they have employment outside their farms. It is detrimental currently. Many of them are suffering serious debt and trying to pay off their debts.
Arising from the new CAP negotiations we need to have better regulation on imports in our beef, dairy, pork or lamb coming into the EU. All sort of questionable beef is being imported from outside the EU. It is important to protect those producing the beef, dairy, pork and lamb. The meat or any other farm produce coming into the EU needs to be properly regulated.
There should not just be regulation of one sector, but all sectors.
I said I would not hog the meeting, but my thoughts on the shambles made of LEADER are well known. Unfortunately, we have had to move on. LEADER was a great programme for rural programmes, but now it is the last thing mentioned at any meeting I attend. No one even knows it exists. That is unfortunate, as there are still a few groups picking up funding. The playing pitch has changed, though, and the Department should go back to the old model, which Europe praised Ireland for, of local LEADER companies. Politics has got in the way, unfortunately, so I am afraid that will not happen. If so, it will be to the detriment of people in every rural community throughout the country, including in my west Cork constituency, who have in the past worked closely with LEADER groups from start to finish on delivering their respective projects. That option is not there anymore. We in west Cork now have to go to the Aran Islands to discuss a LEADER project. I mean no disrespect to those on the islands, but that is far-fetched. Unfortunately, the powers that be have allowed it to happen. We must re-examine the issue.
I welcome this opportunity to speak and thank the witnesses for their detailed answers. The first issue that gives me and the small farmers I represent bother is the question of what the outcome will be for them. We must ensure that there is a ceiling on payments. If there are to be larger payments to individuals, it means there will be less funding available for smaller farmers, especially in a place like Kerry. I will give an example from when milk quotas were first introduced. I remember from watching television programmes at the time that a major case was made for larger farmers, in that farmers of 100,000 gallons or more would not be able to increase production. However, there was no discussion about the farmer with 7,000, 8,000 or 9,000 gallons. When the price of milk decreased, those farmers were blown out of it because the same laws applied to them as applied to large farmers and they were not allowed to expand.
This CAP round is a defining moment. Many farmers are at the crossroads, in particular small suckler farmers, and we must be careful not to lose them in this round. I see the term "genuine farmer", which is open to many interpretations. I hope that it does not mean one must be a full-time farmer or anything like it or that more of one's income must come from farming than anything else. If something like that were to happen, and given that so many small farmers are barely existing, the fabric of rural Ireland would be blown to smithereens. We must ensure it does not happen because it would ruin rural Ireland.
There are many issues to be considered. In 1986, a weanling sold for £730 at Castleisland mart. Recently, a weanling of the same weight sold at the same mart for €540. Look at how much water has passed under the bridge and flowed into the Atlantic in the past 33 years. Look at how costs have increased in the meantime. A farmer today gets €540 for the same animal that was sold in 1986 for £730. These are facts, so we must do something about them. What has gone wrong? In 2013, the Tánaiste was then the Minister for Agriculture, Food and the Marine. He said that there was room to expand our milk production. That was great. While there were a couple of bad years, the last few years have been good for dairy farmers. However, there are now more dairy weanlings flooding the market and competing with the suckler farmer who is trying to exist. Suckler farmers are coming out second best. The genomics scheme is aiding and abetting that, as it requires a farmer to have a certain dairy element in the animals he or she breeds if he or she is to get a five-star rating. It is hurting our beef trade. We must examine it to see what can be done. Suckler farmers who have spent a great deal of money on housing, equipment and compliance with environmental regulations and spent time trying to perfect their trade will not be able to survive if we do not give them some help in this CAP round and address the issues affecting them.
On top of everything else, farmers are worried about exports because the landbridge that is Britain will see delays if the UK exits the European Union. That would signal the end of the suckler farmer and beef producer as I have known them for many years. If something like that situation surfaced, it would bury the whole lot of them.
Farm designations were mentioned. It is fine if the Department or someone else wants to designate areas for the preservation of the hen harrier or any other species, but what of the landowners? We commemorated the people of 1919 yesterday and will remember them forever. At that time, people struggled to get ownership of their land. Since then, many families have handed down their places to the following generations. Sadly, fewer are taking up the mantle of the land now, but people once had to struggle to hold their places or to buy and keep them going. It is not fair to think that farms would be taken from people or that the value of their places would be reduced by designations without their being properly compensated. I told the Minister for Agriculture, Food and the Marine, Deputy Creed, that. I am insisting that the designation should not be at the expense of the farmers and others who own them.
Fishermen's incomes must be protected. Quotas and the whole lot that-----
We deal with fisheries as well. That is all I will say about it. If we do not do something to assist young farmers, they will just not be bothered. If we cannot ensure that there is something in this programme for the young fellows coming on, there are so many other opportunities that it will be to the detriment of rural Ireland and the culture we are so proud of which has been handed to us over generations. We will lose a lot if there is not something in this round of CAP and LEADER. I listened to one of the witnesses on the television in my room before I came down and I am sorry that I do not know his name. He said that the current LEADER programme is much the same as the last one. I do not agree with him on that. It is different in 100 ways. The last local LEADER programme was developed by the local development companies and we were the envy of Europe. The big man from Kilkenny, Phil Hogan, changed all of that and it is not for the best. Now the local authorities are involved in it and they have enough to do without getting stuck in these things. There was a bottom-up approach where rural communities sought and got funding to develop rural-based products, ideas and programmes, which has been lost. As Deputy Michael Collins said, it is hardly mentioned at all in the neck of the woods where I come from because it is not directed to where it was heretofore. We are all watching who will decide who is the genuine farmer. I believe that everyone who I know who is involved in farming is in it for the best of reasons but many of them cannot survive and have to get off-farm jobs. I hope that they will not be left out of the new programme. I will be watching that closely, as will many other people.
We talk about forestry and it is important. Currently, one will only qualify for a grant if one plants 80% of good ground and 20% of marginal ground. Where I come from, that is not the way the land is made up. It is 80% marginal ground and 20% good agricultural ground. If the witnesses are serious about forestry and forestry production, they must ensure that there is funding and that people are allowed to plant marginal land because one can do very little but plant it. Places are being refused permission to be planted because of hen harrier designations and because people do not have 80% arable ground. Those rules are why planting of new forest has practically stopped in Kerry.
Mr. Colm Hayes:
It is not true to say that the entitlement model that we have means that what one had 20 years ago is what one has now. We have a number of policy changes in the current CAP, specifically convergence, which has seen the transfer of €100 million. This is the year in which we reached 60% convergence. Before the Deputy arrived, we talked about the proposal to increase that convergence. The requirement and the regulation is 75%. It is an evolving situation. I do not think anybody gets what he or she got 15 or 20 years ago. There is a maximum unit value of €700 per hectare which is in place for this year. Deputies raised the incorporation of salaries or off-farm income into a farmer's entitlement to direct payments. We addressed this earlier, oppose it and have opposed it in meetings in Brussels for a number of reasons. Administrative complexity is a very obvious reason. It will be extremely difficult to implement. It is still on the table as a proposal but we will continue to oppose it as long as it is there. I flagged it in my opening remarks as an issue for Ireland.
Deputy Ó Cuív raised issues relating to funding and Ireland's contributions and benefits from the EU. I will leave it to my colleagues in the Department of Finance to argue with the Deputy. The €47 million is a figure that Commissioner Hogan presented as what would be required from Ireland to make up the shortfall in the proposal for Pillar 2.
Senator Grace O'Sullivan raised stakeholder consultation. As I mentioned earlier, I expect we will make some announcements on the format of the stakeholder consultation from here on. We will consult our own assessment. The consultants will consult with regard to the needs analysis. There will be an ex anteevaluation and strategic environmental assessment. These will all be made available for anybody who is interested to comment. We have had formal and informal consultations with six public meetings around the country. The door is always open for anybody who wants to contribute with an opinion. I am not sure if the Senator was here but the two Ministers met before Christmas to discuss the environmental pillar and what it might look like.
We were asked what evaluations we have done or are doing of the current rural development programme, RDP. The current RDP has been the subject of a number of evaluations. In 2017, the annual implementation report, which we submit to Brussels, included an evaluation of GLAS. GLAS has been evaluated in what we call a longitudinal study, which measures the contribution of GLAS to biodiversity, water, soil and climate change objectives. The results of this will be very useful for everybody but will be especially useful in informing the designs of the next agri-environment schemes. We published a spending review on the targeted agricultural modernisation scheme, TAMS, last year, which is a public document. We are undertaking a similar spending review on the beef data and genomics programme, BDGP, which I suspect will be published this year. We are also undertaking a mid-term evaluation of the rural development programme, mentioned by Senator O'Sullivan, which Indecon is doing.
The results of that will be very useful in informing any adjustments we might have to make to the current regional development programme, even if it is getting late in the day for that, and to the design of the post-2020 scheme. INDECON is engaging with stakeholders on this. The firm is holding a workshop in Athlone next week and is surveying the beneficiaries of the scheme. It is all part of the stakeholder input.
Deputy Danny Healy-Rae mentioned the 80:20 rule in regard to forestry. It is not marginal land; it is unenclosed land. I think that is what the Deputy is referring to but I would be happy to have a separate discussion on that. There are environmental regulations which inform that. We have answered the capping question. The capping proposal is for degressivity towards €60,000 and the Minister has publicly said we are open to it. Deputies have since commented on it.
Mr. William Parnell:
Deputy Ó Cuív asked what percentage of the overall budget was allocated to LEADER under the current programme. My understanding is that it was 7%, higher than the 5% proposed for the next programming period. That 5% would be a minimum for the next programming period. We will have to see how the negotiations shape up before final decisions are made about LEADER and the allocation in the next programming period.
Senator Grace O'Sullivan asked about an audit of the LEADER programme. Yes, audits are carried out on an ongoing basis by the inspection services in my own Department. They are very much focused on the financial aspect of the projects and whether the finances are handled correctly. Perhaps what the Senator has in mind is the setting of targets around climate change actions and how projects might be reported on against those targets. As members may be aware, there is a strand on the environment in the current LEADER programme. I do not have details of targets set under that programme, but the point the Senator makes is valid in the context of considering the next phase of the LEADER programme. I would be very surprised if there was not an element of LEADER that was focused on climate actions. We can certainly consider setting meaningful targets and having those targets reported on annually. We will certainly take that into our considerations.
Deputies Michael Collins and Danny Healy-Rae made some comments about the current model. My colleague, Mr. Mulherin, pointed out earlier that the current model has taken a little time to bed down but we do not underestimate the role of the local development companies in the LEADER programme. As members are aware, the local development companies are the ones implementing and animating projects on the ground. While they are not always the local action groups, LAGs, they still play an important role in the process, which we certainly value.
One of the issues members have mentioned is the profile of the LEADER programme and how it does not appear to have the profile it once had. Perhaps part of that is due to the bedding-down of the new structures but it is something of which we are very conscious because it is a very large programme for rural development. It amounts to €250 million over the lifetime of the programme, as members know. We are now beginning to see project spending. We are already working with the National Rural Network to see how we can capture some of the best examples that are happening under LEADER and increase the profile of the programme. We expect to see an increase in the number of projects being developed again in 2019. Along with the suite of other programmes that the Department operates around rural development and regeneration, LEADER still has an important role to play and will continue to do so when the new programme is agreed.
All of the questions have been answered fairly well. I thank the members and the witnesses for participating. It has been a very useful meeting. It is obviously a very important area. This committee has already made three submissions towards the CAP agenda. We will obviously make more as time goes on. It is an issue that will continue for a long period of time yet, and hopefully we can get a satisfactory conclusion for everybody. I would like to thank the members, especially the members of the Joint Committee on Rural and Community Development, for participating today. This has been a good idea. I would like to think we can do this again at a later stage in the year and we could all benefit from it. On my own behalf I thank members and witnesses for participating here today.
I join the Co-Chair in thanking the officials and the members for being here today and for this very constructive engagement. It would be a very good idea to get together again later in the year. I thank the participants very much for their patience and engagement.