Oireachtas Joint and Select Committees
Thursday, 20 June 2019
Public Accounts Committee
2017 Annual Report of the Comptroller and Auditor General and Appropriation Accounts
Vote 30 - Agriculture, Food and the Marine
9:00 am
Seán Fleming (Laois, Fianna Fail)
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We meet to discuss the 2017 appropriation account for Vote 30 - Agriculture, Food and the Marine. From the Department, we are joined by its Secretary General, Mr. Brendan Gleeson, Dr. Cecil Beamish, Mr. Martin Crowley, Ms Patricia Heeney and Mr. Paul Dillon. We are also joined by Ms Georgina Hughes Elders from the Department of Public Expenditure and Reform. I remind members, witnesses and those in the Public Gallery to turn their phones off entirely or setting them to airplane mode. Merely putting them on silent will interfere with the broadcast system.
I draw the attention of witnesses to the fact that by virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of their evidence to the committee. However, if they are directed by the committee to cease giving evidence on a particular matter and they continue to so do, they are entitled thereafter only to a 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 and they are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person, persons or entity by name or in such a way as to make him, her or it identifiable.
Members are reminded of the provisions of Standing Order 186 that committee members shall refrain from inquiring into the merits of a policy or policies of the Government or a Minister of the Government or the merits of the objectives of such policies. While we expect witnesses to answer questions asked by the committee clearly and with candour, witnesses can and should expect to be treated fairly and with respect and consideration at all times in accordance with the witness protocol.
Before I call the Comptroller and Auditor General, I wish to point out that the meeting will also deal with the fishery harbour centres' accounts for 2016 and 2017, the European Agriculture Guarantee Fund, the European Agriculture Fund for Rural Development and the European Maritime and Fisheries Fund.
I apologise to Mr. Gleeson and his colleagues for the late start but we had to deal with a large amount of correspondence which was held over from the Department of Finance and the Minister for Finance which I wanted to clear today. However, it took some time. I am conscious that Mr. Gleeson has a flight to catch in the afternoon and the committee will ensure he does not miss it on its account.
Mr. Seamus McCarthy:
The 2017 appropriation account for Vote 30 - Agriculture, Food and the Marine - records gross expenditure of €1.39 billion. This represented a 10% increase on the spend of 1.26 billion in 2016. The account is presented under four programmes, as indicated in the diagram provided to members. These programmes correspond to the four key strategic objectives set out in the Department’s statement of strategy 2016-2019.
Programme B was the largest programme. This relates to farm and sector supports and controls, and mainly comprises payments which benefit farms and farmers. Total expenditure charged to the programme amounted to €726 million in 2017 - an increase of over €100 million from the 2016 level of expenditure.
The Department provides substantial funding from the Vote each year to a number of State bodies that operate under its aegis. These include Teagasc, An Bord Bia, the Marine Institute, Bord Iascaigh Mhara, the Sea-Fisheries Protection Authority, Horse Racing Ireland and Bord na gCon.
By means of a Supplementary Estimate passed in December 2017, the Department was able to reallocate unspent funds on some subheads totalling almost €50 million to other expenditure subheads. There was no overall increase in the estimate provision for the Vote through the supplementary process.
At year end, net expenditure under the Vote was €24 million less than provided for. Some €23.8 million in unspent capital allocations - mainly under the farm and sector supports and controls programme - was carried over for spending in 2018. The remainder of the surplus for the year, an amount of €207,000, was liable for surrender to the Exchequer. Note 3 provides explanations for the variances in spending and transfers of funding from the various subheads.
I issued a clear audit opinion in relation to the appropriation account. However, I drew attention to the Accounting Officer’s statement on internal financial control, which discloses non-competitive procurement by the Department of nearly €19 million worth of goods and services in 2017, including a significant level of procurement which was not compliant with public procurement rules. This is a recurrent issue for the Department.
The Department directly manages the six fishery harbour centres, which are accounted for separately from the Vote. The form of the fishery harbour centres' financial statements was devised many years ago. Unusually, the financial statements of the fishery harbour centres are prepared on both a cash and an accruals basis. The day-to-day operations of the centres are funded through harbour dues and charges set by law, and rents from State-owned properties. The income and expenditure account show a surplus for 2017 of €1.5 million. In addition, annual capital grant funding from the Department is made available for the development and maintenance of harbour facilities. Capital funding from the Department in 2017 was €17.5 million.
I issued a special report in 2014 on significant ongoing deficiencies in the financial management and reporting for the fishery harbour centres, including significant delays in the timeliness of presentation of accounts. The report included seven recommendations intended to enhance the financial management of the centres. The statement on internal financial control discloses the progress the Department has made so far in implementing those recommendations.
As Members are aware, the Department manages significant funds provided by the EU. Where these are applied on schemes that are co-funded by the Exchequer, the funding is reflected in the vote. However, payments to farmers and market-related expenditure that are almost fully funded by the EU are not accounted for in the Department’s appropriation account, even though the Department manages the payments. Such payments amounted to just over €1.2 billion for 2017. These are accounted for to the EU in financial statements that are not subject to audit by me. However, note 6.1 in the appropriation account provides some information about the amounts received from the EU each year.
At the request of a previous Committee of Public Accounts, it was agreed that the Department, in co-operation with the Department of Rural and Community Affairs, would prepare an annual composite account to provide an overview of the funds flowing to agriculture, fisheries and rural communities, and that this would be examined by the Comptroller and Auditor General. Accordingly, the 2017 financial statements of the European Agricultural Guarantee Fund, European Agricultural Fund for Rural Development and the European Maritime and Fisheries Fund have been prepared and presented, and are before the committee today.
The financial statements present the income and expenditure of these three fund programmes in Ireland, including both EU and Exchequer financing. They indicate that the combined income and expenditure of the funds was €1.77 billion in 2017, of which €1.5 billion was funded by the EU. Of course, funds for other, non-agriculture, programmes are also received from the EU, and there are significant annual payments from Ireland to the EU. These composite accounts before the committee today do not give a sufficiently rounded picture of the transactions with the EU, and so I recently published a special report on Ireland’s Transactions with the EU in 2017, which gives a more comprehensive picture. Members will recall that this was examined with the Accounting Officer of the Department of Finance. I recommended in that report that there should be annual reporting, on a consolidated basis, of all Irish contributions to and receipts from the EU. If the Department of Finance takes up that suggestion, the committee may wish to consider if there is a continuing need for the current composite reporting of EU funding to the agriculture and fisheries sectors.
Mr. Brendan Gleeson:
I thank the committee for the opportunity to address it. I refer to the Department's appropriation account for 2017 and two associated sets of financial statements. The first is a non-statutory account, provided for the sake of transparency, which shows the interaction between the funding received from the European Union and the Department's Vote.
This funding is accounted for separately under EU rules and audited by the EU institutions. Because the bulk of it is not matched by national funds, much of it does not appear in the Department’s appropriation account and therefore these financial statements provide a fuller picture of total departmental expenditure at both national and EU levels.
The second is the financial statements for the six fisheries harbour centres owned and operated by the Department. I will begin with the appropriation account. The Department’s gross Estimate for 2017 was €1.49 billion. This included a carryover of capital savings of €21.7 million from 2016. This represented an overall increase of almost €120 million over the gross voted Estimate for 2016. The gross outturn was €1.387 billion, an increase of €131 million over 2016. The Department received a technical Supplementary Estimate to further address emerging priorities by the transfer of funds within the Vote. I will refer to this in my later remarks. The Department also receives appropriations-in-aid. These principally comprise EU receipts in respect of rural development and animal disease programmes. In 2017 these receipts amounted to €258.9 million, some €78 million less than the Estimate of €337 million, largely because EU receipts expected in December 2017 in respect of rural development schemes were not received until January 2018.
The Department’s Vote is divided into four programmes, each representing a key policy priority. Programme A relates to the food safety, animal health and welfare and plant health programmes that underpin our agrifood sector. These include disease eradication programmes such as those relating to tuberculosis, TB, or transmissible spongiform encephalopathies, TSEs, testing for residues in food products, on-farm controls, plant protection controls and other such headings. Programme expenditure under this heading amounted to just over €80 million in 2017, excluding staff and administration costs. This is a saving of €5.5 million compared to the budgeted amount.
Programme B covers our major farm support schemes other than basic payments, which are entirely EU-funded. By and large, these schemes are intended to encourage sustainable agricultural practices and most of them receive co-funding from the EU under the rural development programme. The final allocation for these schemes in 2017, following a Supplementary Estimate, came to just under €806 million. This was some €182 million greater than the €623 million outturn in 2016. In 2017 almost 50,000 people participated in the green low-carbon agri-environment scheme, GLAS. More than 24,000 participated in the beef data and genomics scheme and the sheep welfare and knowledge transfer schemes were launched. Other co-funded schemes included the areas of national constraint scheme, the targeted agricultural modernisation scheme, TAMS, the organics scheme, and the forestry programme, which alone among these schemes is 100% nationally funded. The eventual outturn was for this programme was €726 million. This was more than €100 million greater than the previous year but also €80 million short of the available funds. Key factors in this shortfall were the fact that participation in the new schemes for sheep welfare and knowledge transfer was lower than provided for, and an adjustment to deadlines for certain actions in the knowledge transfer scheme slowed the payment process, with some falling into 2018. Similarly, our ambitious target for payments to a very high portion of GLAS participants within the calendar year was not achieved. However, for the 2018 scheme year close to 90% of GLAS applicants were paid their annual advance within the calendar year.
On the capital side, the TAMS investment scheme saw a greatly improved drawdown compared to 2016 with €33 million spent, although drawdown was lower than the provision. To help with the financial management of the scheme we reduced the time allowed for applicants to submit payment claims. The experience in the past 18 months reflects good levels of investment in improved on-farm facilities. Expenditure on the forestry programme was lower than hoped in 2017, and this remains a continuing but critically important challenge. The capital carryover into 2018 from 2017 was largely drawn from the TAMS and forestry savings in 2017. I should say that programme B also includes an element of national funding on EU market support schemes such as intervention.
Programme C, policy and strategy, includes expenditure on research and training and several food support schemes, as well as grants-in-aid to some of our State agencies. The outturn slightly exceeded the voted allocation of €338 million, due partly to several additional measures designed to help build resilience in the sector to confront the challenge of Brexit. Those initial measures included an increase in Bord Bia's allocation by €8.6 million to assist it in its marketing and promotion of Irish food overseas. In addition, the sum of €9 million was provided for the agri-food sector component of the SME Brexit loan scheme. This scheme was jointly established by the Department of Agriculture, Food and the Marine and the Department of Business, Enterprise and Innovation, in conjunction with the Strategic Banking Corporation of Ireland. Along with €14 million from the Department of Business, Enterprise and Innovation, this provision leveraged a working capital loan fund of €300 million for SMEs at an interest rate not exceeding 4%. The Department of Agriculture, Food and the Marine contribution ensured that at least 40% of the fund would be available for the food sector. Savings which emerged in other parts of the programme, particularly research, allowed us to respond to a specific request from the World Food Programme for the earliest possible release of the final element of funding under our 2016-2018 strategic partnership agreement. This resulted in payments of €14 million to the World Food Programme in 2017.
Programme D relates to seafood. Expenditure under this heading in 2017 included some €21 million for the upgrading and development of fisheries harbours. Around 88% of fish landed in Ireland now are landed into the six centres owned by the Department. The value of those landings has increased from €224.3 million in 2013 to €271.5 million in 2017. Programme D also includes €5.6 million under the seafood development programme and grants-in-aid to the Marine Institute, Bord Iascaigh Mhara, BIM, and the Sea Fisheries Protection Authority. This programme also includes expenditure of €4 million on the commencement of substantive work on the remediation of Haulbowline Island.
I will now touch very briefly on the financial statements of the Irish operations for the European Agricultural Guarantee Fund, the European Agricultural Fund for Rural Development and the European Maritime Fisheries Fund. This account consolidates financial data on a calendar year basis, incorporating EU and Vote funds. It was devised in the early 2000s, at the request of this committee, to provide visibility of expenditure across all these funds as some of the expenditure is not Vote-related. Notable features in 2017 include EU receipts of more than €1.5 billion across the Irish operations of the three funds. When combined with the national Exchequer funding of €266.6 million, total expenditure under the funds in 2017 amounts to €1.77 billion. More generally, I know that the Comptroller and Auditor General has prepared a special report on the full range of Ireland’s transactions with the EU in 2017. That report provides a very clear picture of Ireland’s engagement with the EU across all funds and all Departments.
Finally, I would like to refer to the account relating to fisheries harbour centres. The harbours were the subject of a special report in 2014 and we are continuing to address some of the recommendations. Turning to the financial performance of the harbours themselves, the higher level of harbour dues and profit on disposal were the main factors behind the increases in receipts and the surplus on the revenue account. The accounts also show the substantial increase in capital investment at the harbours with substantial projects at each of the six harbours, the vast majority of which is funded through the Department's Vote.
I thank the Chairman and the members of the committee for their attention and I will try to answer any questions that arise.
Seán Fleming (Laois, Fianna Fail)
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The lead speaker today is Deputy Catherine Murphy, who has 20 minutes. The second speaker is Deputy Bobby Aylward. Deputies Marc MacSharry and David Cullinane have also indicated and will have ten minutes each.
Catherine Murphy (Kildare North, Social Democrats)
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The witnesses are very welcome. I will try to keep my questions short. I would appreciate succinct answers so that we can get through the several topics I wish to touch on.
I wish to ask about the 72 sites throughout the State, which account for nearly 1,000 ha. One of those is the site at Backweston, with which I am very familiar. How does the Department control and manage that estate? Does it map those sites? Is there a list? Are costs involved in maintaining those sites?
Mr. Brendan Gleeson:
Some of those sites are places where the Department has offices. We have a long list of sites around the country, most of which are small holdings with forestry or agricultural land. We have several research farms. Costs are associated with the operation of places where we are actively engaged. One example is the Tops farm in Donegal where we are actively involved in managing a research facility. There is a farm near Backweston which is managed for the purposes of agricultural sites. We have a list of these sites. Many of them are very small sites in rural areas without any significant activity. No significant costs are associated with their management.
We have a list of these sites and many are sites in rural areas where there is not significant activity or costs associated with their management.
Catherine Murphy (Kildare North, Social Democrats)
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Will Mr. Gleeson provide the list to the committee? That might be useful. Is there any income from them?
Mr. Brendan Gleeson:
We have six fisheries harbours which are actively managed and there is an income from those. Many of these sites are former Land Commission sites. For example, we have an acre of forest plot in Ballyhooly. I will give the Deputy the list because it is quite informative. Most of these plots are small plots of agricultural or forestry land around the country.
Catherine Murphy (Kildare North, Social Democrats)
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It would be useful for us to look at them in our own time. We got a list of Garda stations that were to be sold and we were quite amazed at some of the things in that list. It could be useful to have such a list.
The Department had a number of claims and compensation and legal costs to pay. From my reading, the legal costs were substantially in excess of the amount paid out in the claims. Why would that have happened?
Mr. Brendan Gleeson:
We had 11 settlements of legal cases in 2017. We are a big Department. There is always a list of actions against the Department. To the extent that we settle cases, we do so on the basis of legal advice. That would include if there was compensation to be paid or costs. We do that on the basis of advice and get sanction from the Department of Public Expenditure and Reform.
Catherine Murphy (Kildare North, Social Democrats)
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When the costs are more than the amount that is paid out in compensation, that is almost the opposite of what people would expect.
Catherine Murphy (Kildare North, Social Democrats)
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What kind of claims would they be? I am sure the State Claims Agency will advise on how to mitigate against a repeat of a claim. It would be useful to have an idea.
Mr. Brendan Gleeson:
I will be a little circumspect about what I say about these cases but I will try to give a flavour of what is in there. With regard to litigation that concluded during 2017, there was a case that involved one of the farmers on the Cooley Peninsula and related to compensation paid in 2001 for foot and mouth disease. There was, for example, a case taken by a contractor on the basis of what he regarded as a change in his conditions of engagement. There was a case involving a ferry company relating to the nature of the departmental fees charged for ferries. There were a number of fisheries cases where people regarded departmental action against the fisheries as-----
Catherine Murphy (Kildare North, Social Democrats)
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Was the issue with the ferry a change in the terms in conditions? What was the nature of the issue?
Catherine Murphy (Kildare North, Social Democrats)
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That is not necessary. I just wanted to get a flavour. Will that list also be made available to the committee?
Catherine Murphy (Kildare North, Social Democrats)
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That is fine.
Mr. Seamus McCarthy:
It might be worth pointing out that the charge for legal costs for the fishery harbour centres case was almost half of the legal costs that are presented. There was an element of compensation paid and that is charged to the fishery harbour centres fund but the legal costs were borne by the Department and they account for nearly half of that figure. It was a very long-running case that went to the Supreme Court. There is further detail in the fishery harbour centres account about that case.
Catherine Murphy (Kildare North, Social Democrats)
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If the case was in the Supreme Court, there will obviously be significant legal fees.
Non-compliance with procurement rules seems to have worsened. Procurement is an issue to which the Committee of Public Accounts pays particular attention and it is a major concern. It appears that some non-compliance is on general, non-specialist matters. What kinds of controls does the Department have in place and why was it not compliant in the first place?
Mr. Brendan Gleeson:
To deal with the Deputy's first point, it is not getting worse, but better, and I will explain why. This is based on a declaration by the Department of non-competitive procurement and non-compliant procurement, which are not necessarily the same. In some circumstances where there are specialist requirements for which there is only one supplier or an issue of urgency, there can be a requirement to go to market without competition. Insofar as our return on this is concerned, if a contract is signed, it remains on the list until such time as the contract is closed off. There is a cumulative effect such that contracts that might have been declared in 2016 will run for two or three years. They remain on the list in the following year. We have done an awful lot of work in the Department on resolving these procurement issues and we are making significant progress. I can go through some of the figures if the Deputy wishes.
Catherine Murphy (Kildare North, Social Democrats)
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I ask Mr. Gleeson to focus on the 17 contracts valued at €1.7 million for fairly standard services. The specialist contracts can be explained but the standard ones jump out.
Mr. Brendan Gleeson:
The value of contracts declared in 2017 which we regarded as non-compliant was €5.9 million. I am just giving that bit of perspective. That was from procurement of approximately €100 million. Within the Department, we have established a central procurement unit and a network of procurement liaison officers in every division. We have trained those procurement officers in proper procedures. The value of those non-compliant contracts has diminished. I will return to the Deputy with a figure shortly.
We had 38 contracts valued at €5.6 million in 2017 and the reasons for those fell outside the exceptions provided in the procurement rules. While this is not in any way to excuse this, I assume that the people who involved themselves in those procurements felt that they complied with the exceptions provided for in the circular. That should not happen. We now have a system of assessment by a senior officer before any procurement exception is allowed and it is also assessed by the central procurement unit. The objective of that system is to eliminate non-compliance altogether and we are confident that we are well on the way to doing that.
Of those 38 contracts, 20 with a value of €1.71 million related to separate contracts that were aggregated. It is possible that different people contracted with the same party and were dealt with separately. For the purposes of our return, we felt for the sake of transparency and propriety that they should be aggregated and returned as a single batch. A substantial part of that non-compliance involved separate contracts with the same vendor. We do not permit that to happen any more. Eight of the contracts with a value of €1.8 million were contracts rolled over beyond a reasonable time period. In other words, they were existing contracts for some services and instead of running a new procurement, they were rolled over.
Catherine Murphy (Kildare North, Social Democrats)
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Mr. Gleeson has done substantial work to make sure that if and when we see him again in a year, we will see a different profile in this area.
Catherine Murphy (Kildare North, Social Democrats)
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When does Mr. Gleeson think that will be worked out of the system?
Catherine Murphy (Kildare North, Social Democrats)
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I will discuss now weaknesses in controls over fixed assets. There are some assets that Mr. Gleeson cannot locate. What would be the nature of those assets and is there a value on them?
Mr. Brendan Gleeson:
The fixed assets project is ongoing and we have intensified our efforts to nail down the value and location of all of our fixed assets. We have established a central assets management unit. In the future people purchasing or disposing of assets would be forced by the accounts system to declare them as assets. That will be reviewed by the-----
Catherine Murphy (Kildare North, Social Democrats)
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What kind of things are they?
Mr. Seamus McCarthy:
There was a variety. The structure of the Department is very unusual or different from most public service organisations. There is agricultural equipment on the farms and in the research centres. The difficulty that we had was that there was no information on the location of the list of assets when one went to check on them. We therefore could not find where the recorded asset was. On the other hand one could look at the assets and could not necessarily trace them back to an entry on the fixed asset register. It has been an ongoing issue that we have been raising with the Department. The unit has been set up since January 2017. We are looking to see progress on that, so that it is clean and that it supports the figures in the statement of assets.
Catherine Murphy (Kildare North, Social Democrats)
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Excuse me, but in Mr Gleeson's mention of motor vehicles, how is one not able to locate a motor vehicle?
Catherine Murphy (Kildare North, Social Democrats)
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Mr. Gleeson has put these into a value pecking order. What is on the top of that value list?
Catherine Murphy (Kildare North, Social Democrats)
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Would Mr. Gleeson not have money value beside these assets?
Catherine Murphy (Kildare North, Social Democrats)
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Mr. Gleeson must have a ballpark value on these if he is putting them in a pecking order.
Catherine Murphy (Kildare North, Social Democrats)
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How can Mr. Gleeson rank assets then?
Catherine Murphy (Kildare North, Social Democrats)
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It is not if it is a 1974 Fiat Punto in comparison to a brand-new computer.
Mr. Brendan Gleeson:
Maybe I am answering this inadequately. All I can say is that we established a formal process here with a unit and an assessment of what the priorities should be in how to rank and where to start with this project. This was the ranking that we came up with. Most assets are fully depreciated in any event and are beyond the depreciation date from a value and accountancy point of view.
Mr. Seamus McCarthy:
If the Deputy can look at the screen, note 2.2 gives a fairly standard breakdown of capital assets that are used across Departments for office equipment, other machinery, furniture and fittings, and then there are capital assets under development. The office equipment is, as the Deputy can see, where most of the expense has been incurred. It is also very heavily depreciated. These are assets that have been in use for a long time. These will include such items as ICT equipment and other office equipment. Is there any software in there?
Catherine Murphy (Kildare North, Social Democrats)
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There is obviously a weakness. It must be decided then how funds will be spent. If things are at a point where they are fully depreciated and have no value, are we then expending valuable administrative time on matters where we are overstating a problem here? Having said that, is there a tracking system for items that are purchased now?
Mr. Brendan Gleeson:
There are two parts to this exercise. One is to get a handle on what is out there. The second is to ensure that the system does not permit this to happen again. When one looks now at our staff accounts system, a person when making a purchase order is required to put that on the capital assets register. Those purchases are assessed by the asset management unit now to ensure this happens. There is a system in place now to prevent this from happening in the future. It requires the expenditure to be brought to account as a capital asset.
Catherine Murphy (Kildare North, Social Democrats)
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Moving to the underspend on salaries, this is something that we see nearly every week in the committee, where we are usually told that there is a difficulty recruiting people. Is it correct to say that there are 62 retired Civil Service staff who have been re-engaged by the Department which cost €1.6 million? Can Mr. Gleeson confirm that?
Catherine Murphy (Kildare North, Social Democrats)
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Why would they have been rehired?
Catherine Murphy (Kildare North, Social Democrats)
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Are these people contracted or directly employed?
Catherine Murphy (Kildare North, Social Democrats)
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On the question of underspend on salaries, what is the Department's complement of staff, what numbers are being recruited, what areas are the Department finding it difficult to recruit in?
Catherine Murphy (Kildare North, Social Democrats)
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Yes, every week.
Mr. Brendan Gleeson:
We are talking about retirement of staff, where there is a demographic issue across the public service with many people in their 50s like me and not too many young people. We are talking about a strong economy with lots of other opportunities for people. We are talking about a Public Appointments Service, and this comment is not intended to be pejorative, which was perhaps overwhelmed in those early days of economic recovery with recruitment requests from every Department. By and large-----
Catherine Murphy (Kildare North, Social Democrats)
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Does it take a long time to recruit through that process?
Catherine Murphy (Kildare North, Social Democrats)
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Is it the same now?
Catherine Murphy (Kildare North, Social Democrats)
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How many people does the Department employ and what is staff headcount?
Catherine Murphy (Kildare North, Social Democrats)
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What is the optimum number, as opposed to the number that were employed? How many people were being recruited at that time?
Catherine Murphy (Kildare North, Social Democrats)
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Have you reached that figure since?
Catherine Murphy (Kildare North, Social Democrats)
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What areas are we talking about, were they specialist or administrative areas?
Catherine Murphy (Kildare North, Social Democrats)
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It was right across Department.
I return now to Mr. Gleeson's reference to Brexit. In 2017, the Department started recruiting people specifically on that issue. Is that a specific section or is it a cross-departmental recruitment approach?
Will Mr. Gleeson give a window into the planning?
Mr. Brendan Gleeson:
On recruitment for Brexit, the big issue was the additional controls the Department would have to provide at ports and airports, and the potential for a requirement for export certification of agrifood products to the UK. Those requirements arise because the UK intends to leave the Single Market and the customs union. We flagged a requirement, for when that happens, of almost 500 staff between certification and additional controls. In the event, there were several false starts with Brexit and we were left having to decide how to handle the recruitment process in circumstances where it was uncertain whether the UK would leave. The objective was to be able to fulfil the statutory requirements but not commit ourselves in perpetuity to an additional 500 staff. The UK was due to leave on 29 March but there was another extension-----
Catherine Murphy (Kildare North, Social Democrats)
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The Department has employed some staff but will be required to employ more.
Catherine Murphy (Kildare North, Social Democrats)
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There is some time to plan, in case there is a hard Brexit.
Mr. Brendan Gleeson:
Yes. Second, we have recruited 60 staff and approximately 200 staff are available for deployment at Dublin Port and Rosslare Port, among recruitment, some of the locum tenens, or retired veterinarians, about whom the Deputy asked and internal temporary redeployments. As time goes on, we will continue to recruit but we are satisfied that at the end of March, we had enough staff to make a credible attempt at deploying them and meeting our statutory requirements.
Catherine Murphy (Kildare North, Social Democrats)
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I turn to something not specifically in the Department's accounts, namely, the Land Commission records. It is a bit of a hobby horse of mine and a treasure trove of wonderful genealogical value that is hidden away in a facility in Portlaoise. I understand some of them are working documents, while others are fragile. Nevertheless, they are an historical treasure trove. How much does the Portlaoise facility cost, and what kind of staffing is involved?
Catherine Murphy (Kildare North, Social Democrats)
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Has the Department considered digitising those records?
Mr. Brendan Gleeson:
Yes, it has been considered and we have thought about the historical value of the Land Commission records. It would be a very nice project to develop some kind of public access to the records. I will come back to the Deputy on the matter. I am happy to share whatever information we have but it is not to hand.
Catherine Murphy (Kildare North, Social Democrats)
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I turn to the offices leased in Athenry and Rosslare. One of the leases is close to expiry. Is the Department in the process of renewing the lease? If so, I understand that commercial sensitivity might be associated with it. At meetings of the committee, the value of purchase versus lease frequently arises. Is that being considered?
Mr. Brendan Gleeson:
Currently, in Rosslare, we are engaged in a significant project with the OPW and the Revenue Commissioners in preparation for Brexit. I am not certain where that leaves our office in Rosslare and, again, I will have to come back to the Deputy in that regard. We own three of our laboratories but, in general, it is leasehold, through the OPW.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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I welcome Mr. Gleeson and his officials. Theirs is one of the most important Departments, given that it covers the agriculture sector, one of the largest indigenous sectors. It has an important part to play, therefore, in the well-being of the country.
I turn to more day-to-day issues. I am a farmer and I am on the ground all the time. On the €100 million Brexit fund for farmers, which was announced two weeks ago, has the Department any information from Brussels or the Commissioner on its conditions? When will it be rolled out and who will benefit from it?
Mr. Brendan Gleeson:
Some aspects have to be decided but I will tell the committee what I can. It is an implementing regulation of the European Union and has been published. The Commission will provide €50 million in funding and calls it a temporary adjustment scheme. The conditions include membership of an environmental scheme or of a quality assurance scheme, and a requirement for some kind of temporary reduction is imposed by the Commission. The Commission has looked at the case made on the market. It has indicated, as it did in the case of the temporary voluntary reduction scheme in the dairy sector a couple of years ago, that if it is a market scheme and farmers want the €50 million, one of the conditions is that there must be some temporary adjustment in supply to address the market issue.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Did Mr. Gleeson refer to a reduction in the number of animals? What exactly did he mean by supply? Farming organisations are annoyed that a reduction could be tied into the fund.
Mr. Brendan Gleeson:
It could be a reduction in the number of animals. As I understand it, the implementing regulation is before the monitoring committee today. Afterwards, we will know clearly what the regulation stipulates and we will then have some kind of a consultation with farm bodies about what to do. We will be constrained by the parameters in the regulation. A reduction in the number of animals could be a requirement but there will not be a requirement for a permanent adjustment, in case that is what people are afraid of. It will be voluntary.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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The understanding was that in the light of the drop in beef prices and the bad summer last year, this conversation may have tied in a reduction in numbers.
Mr. Brendan Gleeson:
The Deputy will understand that the Commission looks at the matter and says Ireland slaughters an extra 10,000 animals per week, which may have something to do with the price dynamic. The Commission believes that if it is to provide money to Ireland, there will have to be some kind of supply adjustment. That is its perspective.
The heading on the regulation will be temporary adjustment aid. The same happened with milk in 2016, when there was a voluntary reduction scheme for farmers who wanted to reduce the supply. It is the same kind of initiative.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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It will be voluntary, one hopes. It will be up to farmers to decide.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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In the same vein, is the €40 top-up on the beef genomics scheme oversubscribed? Has the Department any information on that? When will it be implemented?
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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When will it be rolled out? Has the Department a timeline?
Mr. Paul Dillon:
The closing date by which calves must have been born is the end of June for the animals to come in within the reference period. They will have to be registered within three weeks of the end of June. As soon as possible after that, we will decide whether it is oversubscribed and will apply a linear cut. As soon as possible, perhaps in mid-July, we intend to start processing applications.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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A review of laboratory services was being carried out. I am particularly interested because there is a laboratory in Kilkenny that serves the south east. What is the status of the review? I have asked the Minister several times in parliamentary questions but he has told me it is not yet ready. Will Mr. Gleeson elaborate on that?
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Will that mean the closure of some laboratories?
Mr. Brendan Gleeson:
Currently, the position is that there has been a cost-benefit analysis. I expect all of that to be published in the near future and then there will be a public consultation on it. Everyone will have an opportunity to look at the cost-benefit analysis and assess for themselves whether the proposal will result in a better service.
Our objective will be to provide a better service for everybody.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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How long does Mr. Gleeson think it will be before the report will be ready?
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Two weeks ago, there was a report of horsemeat being found in the food chain in a foreign country that according to traceability should not have been there. Is Mr. Gleeson able to comment on what happened and why it happened? We had experience of this a couple of years ago. We are worried about the meat trade and its reputation. Why has this been allowed to happen again? How did it happen? Did someone take the foot off the pedal with regard to inspections? How did we get this headline that none of us wants?
Mr. Brendan Gleeson:
Two different things are happening but people will conflate them in their own minds. We have a national residue monitoring plan, which is approved by the Commission. We cannot tell by looking at a piece of meat whether it contains dioxins but we have a monitoring plan that checks these things. Through this plan we discovered a batch of horsemeat-----
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Was it discovered here in Ireland?
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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That horsemeat should not have been in the food chain.
Mr. Brendan Gleeson:
No, it should not have been in the food chain. All I am saying is we have a residue monitoring plan that checks for these things and that is as good as there is anywhere in Europe. It is the same for every meat product. It should not have been in the food chain. Separately, and I cannot say very much about this, there is a Garda investigation into allegations involving potentially misidentifying horses and trying to get them into the food chain in circumstances where they should not be in it. That is a collaborative exercise between ourselves, customs and the Garda and it is an ongoing investigation.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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That is why I was being careful about what I said.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Has any reputational damage being done to our horsemeat trade?
Mr. Brendan Gleeson:
We can look at these things two ways. Things happen and when they happen the important thing is to tackle them in a transparent and vigorous way. From time to time, there are food safety issues and the Department takes them very seriously. We would prefer if these things never happened but they do happen. Our reputation can be damaged by the event but it would be more damaged if we did not tackle it in a very open and transparent way.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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We all accept that.
I know the fair deal scheme is under the remit of the Department of Health but does the Department of Agriculture, Food and the Marine have any part to play in the assessment and costings? Does it come under the remit of the Department with regard to the 7.5% charge for three years? Does the Department have any role to play or does the Department of Health deal with farmers directly?
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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With regard to fisheries, there is a lot of controversy around the famous Rockall. Our fisheries industry from Cork to Donegal depends on fishing in that area. Does Mr. Gleeson have a comment to make on this? The Department has responsibility for fisheries.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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We are all in that category.
Mr. Brendan Gleeson:
It is really a matter for the Department of Foreign Affairs and Trade because it is an issue about a territorial dispute. Ireland does not claim those waters but we reject the UK's territorial claim. The fisheries issue is that if the UK succeeds in its territorial claim, it will establish a 12 mile zone around Rockall where other European member states cannot fish. I am speaking on behalf of the Department of Foreign Affairs and Trade but I believe I can do so. We do not accept the UK's territorial claim and, therefore, those waters are European Union waters and access to those waters and the quotas are determined at European Union level in the negotiations that happen every December.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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What about traditional rights after years and years of fishing? Are there not traditional rights for people from Ireland who have been fishing in the area for the past 40, 50 or 60 years? Are there established fishing rights after that length of time?
Mr. Brendan Gleeson:
I am not sure that would be a principle of law if the territorial claim were conceded. What I can say is that Ireland does not accept the territorial claim and, therefore, from our point of view they are European Union waters. We have a quota for haddock in those waters. It is a significant fishery for squid, for which we do not have a quota as it is a non-quota species. We do not accept the territorial claim and we will continue to reject it. That piece of the jigsaw is prosecuted through the Department of Foreign Affairs and Trade and not by us.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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With regard to the Brexit loan scheme, the Department has provided €9 million to the Strategic Banking Corporation of Ireland, SBCI. There was an estimate of €15 million and an outturn of €24 million. What role does the Department play? Who benefits from the Brexit loan scheme?
Mr. Brendan Gleeson:
The genesis of this was back in 2016 when there was a dairy price crisis. We received two tranches of money under the exceptional measures provision we are now speaking about for beef. For the first of these tranches, we sent the money to every dairy farmer in the country. For the second, we decided we would use it in a better way to leverage loan funding for farmers and there seemed to be a demand in the scheme. The first of these schemes was €150 million and we put in upfront money to meet first losses and as an interest subsidy. That was available to farmers. This particular Brexit scheme came from that idea. It was a €300 million scheme through the Department of Business, Enterprise and Innovation and us. It was intended for SMEs as a working capital loan scheme because that seemed to be what was required. We put in €9 million and the Department of Business, Enterprise and Innovation put in €14 million for first losses and interest subsidies. We worked with the SBCI and European Investment Bank to create the loan fund of €300 million.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Was it because of Brexit coming down the line?
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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What percentage of agricultural small and medium enterprises are involved in getting loans? Is the scheme open to all SMEs across the board?
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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A total of €5 million was estimated for the eradication of bovine disease and €7 million was collected through farmers paying the levy at marts and factories. Does this cover the compensation paid to individual farmers because of tuberculosis, TB?
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Does the €7 million collected cover the costs? What is the breakdown?
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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I saw an estimate of €5 million and an outturn of €7 million when I was going through it and I thought I would ask about it.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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That is mostly TB compensation.
Mr. Brendan Gleeson:
It is mostly with regard to TB but it also covers other things. We still test fallen animals over 48 months for BSE. We test a random selection of sheep for scrapie because we are required to do it. There is a variety of other costs. The cost specifically of the brucellosis and TB scheme is €36.46 million. The Deputy mentioned a receipt from levies of almost €6 million. That is the breakdown.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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The cost of bringing a fallen animal to the knackers has gone sky high. Does that go directly to the knackers or does the Department also pay compensation? At one time it was cheap to bring a dead animal to the knackers yard but it is now very expensive, particularly over the past two years. Are they covered by the Department as well as the farmer who lost the animal? What is the breakdown? I had not intended to ask this.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Who pays for that?
Mr. Brendan Gleeson:
We do. There is a subsidy relating to the scheme that was also intended to keep the cost for farmers down. It only relates to that scheme, however, it does not relate to the operation of knackeries generally. They are critically important services because if one lives out at the end of the Beara Peninsula or somewhere like that, it is a long way to the nearest knackery. It is important, therefore, that they are maintained.
The current subsidy rates for bovines aged over 48 months are €30 for the collection, which is paid to the knackeries, and €78 per animal which is paid to the category 1 rendering operators because these animals will go from the knackery and are then rendered and sent for destruction. The cost of collection of those animals to the farmer is capped at €54. If we did not pay the subsidy, that cost to the farmer, notwithstanding the fact that I am sure farmers think it is extraordinarily high, would be significantly higher. If we did not have the subsidy-----
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Is the cost capped at €54? Unfortunately, I lost an animal lately and I was charged €80.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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That is good information.
I refer to the derogation and the review that has been going on since April or May. There is a good deal of consultation taking place. There is serious concern in terms of the derogation and its being rolled out in the future. I met representatives from the Irish Farmers Association, IFA, in Kilkenny earlier in the week in order to discuss that matter. According to the statistics, only 19% of farmers are availing of this derogation in terms of 130 kg to 250 kg of fertiliser per hectare; 81% are under 130 kg so it does not affect them. The IFA representatives I met stated that they are doing a two or three-year survey of people who have been getting this derogation and that it has emerged that it has no adverse effect on rivers, water levels, wells, etc. Why is this derogation under review? Is it with a view to cutting it back, excluding people from obtaining it or bringing it to an end?
Mr. Brendan Gleeson:
We are involved in a consultation. After a week of discussions about the environment and climate change, when we look at Environmental Protection Agency, EPA, reports, generally speaking, they indicate that water quality is not improving. We have approximately 7,000 derogation farmers who have a special dispensation, so to speak, to operate at higher intensity levels than most others,. There are additional conditions attaching because high-intensity farming needs to be controlled. All we are saying is that we want to look again at the derogation against the backdrop of all of the information we have, including whatever comes from the IFA, but that we will rely on our own judgment for determining whether any adjustments are required and will have a public consultation about it. It is vital that we do this because it is very important that people are sensitised to the need to farm in a sustainable way. This this is part of that effort. What we are involved in right now is a public consultation.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Some farmers obtained borrowings on their output four years in advance and if this is changed, it would affect those repayments. The IFA maintains that the water quality in rivers here is cleaner than those in the EU. Ireland is in the top four or five in that regard. I do not know whether that is factual.
Mr. Brendan Gleeson:
It is true to say we have very high-quality waters. I am fearful of saying this because I might be wrong but the situation is that our pristine waters are diminishing in quality and our middle-grade waters are improving slightly in quality. The overall picture, however, is not great in terms of the direction of travel. We just have to be very careful that we do not throw the baby out with the bath water. If we are making a pitch for Irish agriculture on an international market based on its environmental sustainability, we have to be sure that we are doing what we are saying we do. This consultation is part of that effort.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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That brings me to the next question about our carbon footprint. Agriculture has been blamed for 32.3% of emissions. The Department states that we should increase production with a view to ensuring food safety and producing food of a good quality but how can we marry the two of those if we are told we must reduce emissions? At the same time, we want solidarity in terms of food availability and the quality of food. Production in the dairy sector is increasing, which is good for the country in terms of exports etc. If we cut down on beef production in terms of the scheme Mr. Gleeson is talking about, we will have to import beef from South America or elsewhere. Where is the saving on carbon footprint in terms of the world market? We need to have a happy medium in this regard. All systems have to survive. Mr. Gleeson stated that smart technology is important but we also have to keep an industry going for the well-being of this country.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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I did not ask-----
Seán Fleming (Laois, Fianna Fail)
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Will Mr. Gleeson explain that? He said some emissions cannot be traded.
Seán Fleming (Laois, Fianna Fail)
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Last week, we had a situation about tet trading of emissions. For the benefit of the public, will Mr. Gleeson explain the difference?
Seán Fleming (Laois, Fianna Fail)
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What is in the traded area?
Seán Fleming (Laois, Fianna Fail)
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That is the Department of energy-----
Seán Fleming (Laois, Fianna Fail)
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We will write to that Department for a note on the breakdown between those emissions that can be traded where we can buy our way out of not meeting our targets versus certain areas like agriculture that Mr. Gleeson mentioned where we cannot buy our way out if we do not meet the targets. It is not Mr. Gleeson's Department so we will write to the Secretary General of the Department of Communications, Climate Action and Environment for an information note on that topic because it is the first time I have spotted this difference. Some can be traded and some cannot.
Seán Fleming (Laois, Fianna Fail)
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Very good.
Seán Fleming (Laois, Fianna Fail)
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In the meantime, we will ask for a short report.
Seán Fleming (Laois, Fianna Fail)
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It would help the members too.
Catherine Connolly (Galway West, Independent)
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A fool's guide for us.
Seán Fleming (Laois, Fianna Fail)
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Exactly. The-----
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Is it true that we are spending €80 million this year alone buying-----
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Finally, €24 million was unspent. Unspent money is not good, especially when schemes such as GLAS are underfunded. In the agri-environmental schemes sub-heading, the Estimate provision for GLAS was €245 million and only €225 million was spent. My understanding was that more people wanted to get into GLAS so why was there an underspend on the scheme? It states that the IT systems were not in place and that "... only 76 percent of applicants passed the pre-payments checks against the 85 percent [pass level]". How did it come about that it was not up to scratch, so to speak?
Mr. Brendan Gleeson:
It is undesirable that money would be left behind in a national Vote but there is no question of leaving money behind in the context of the multi-annual programme of which GLAS is a part. Every scintilla of EU funding will be drawn down to support GLAS. We would have preferred to be able to pay everybody that year. We made a-----
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Were those 25% picked up the year after?
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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They were left out only for that year.
Mr. Brendan Gleeson:
More than 90% of people were paid their GLAS payments in the following year. We can only pay people when we have done all the preliminary checks. Where we do not pay people it is, generally speaking, down to some element of the application that needs to be revisited. That year, savings were significantly more than we had anticipated but that would have been picked up the following year.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Is the funding running out in targeted agricultural modernisation scheme, TAMS, for the farmers building milk parlours etc.? Some farmers spoke to me recently to say it was not guaranteed that grants would be paid. Has the money in TAMS been overspent or is it running out? Have there been too many applicants and not enough funding?
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Would there be percentage cuts?
Mr. Brendan Gleeson:
There would be a decision on the optimum products to fund and which could not be funded in any tranche. We have now reached a point in looking at the current tranche where we know we will not be able to fund all of them if we want to continue to be able to run new tranches as time goes on. We have reached that point.
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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What is the percentage figure for farmers who have applied and who may not be successful? Does the witness have that information?
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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So roughly one fifth could be left out.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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I thank everybody for coming in. I do not want to get into areas covered by the agriculture committee but I will follow up on some of Deputy Aylward's points. I appreciate the Department of Foreign Affairs and Trade will be the main actor in the Rockall issue but could the witness clarify if the former Tánaiste and Minister for Foreign Affairs and Trade formally recognised that Rockall is part of the Scottish economic area?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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I know the history. Will Dr. Beamish speak to the specific question?
Dr. Cecil Beamish:
The question relates to articles recently that have referred to the 2013 and 1988 agreements on the exclusive economic zone, EEZ. There was a difference of opinion between Ireland and the United Kingdom for many years on where the boundary of the exclusive economic zone fell going north west from Donegal for 200 miles. The continental shelf and jurisdictions are the business of the Department of Foreign Affairs and Trade and an agreement was reached on the seabed boundary in 1988. In 2013, there was agreement on the boundary in the water above the seabed. They are the same single maritime boundary. The drivers in reaching that agreement were concerns about who had responsibility for maritime pollution incidents and who would respond in different areas. Some issues arose at the time. There was also the matter of the development of offshore wind facilities and in which jurisdiction they could be located if consented. The boundary was set but even when there were two different boundaries in terms of the exclusive economic zone, Rockall was always on the UK side of that boundary. There was never a point where Rockall was not in the UK EEZ. The fact that a single boundary was agreed in 2013 and that the continental shelf boundary was agreed in 1988 did not change the Rockall issue.
The Rockall issue centres on whether a claim by the UK of sovereignty and its unilateral actions to support that are accepted by the State. This State, through successive Governments, has never accepted it. Ireland has never claimed sovereignty of Rockall. It is a dispute over the UK's creation of sovereignty on that rock and, subsequent to that, the creation of a 12-mile zone that the UK claims for exclusive access around Rockall. That is not accepted by the State either. There is detail behind that. In earlier decades, there was debate as the United Kingdom was seeking to establish a new exclusive economic zone based on Rockall as a starting point, which would have pushed it way out. The United Kingdom conceded that claim and no longer makes such a claim. That matter does not arise. There are other ongoing disputes about the continental shelf involving Denmark, the Faroe Islands and Ireland that are unresolved. They concern seabed issues. The 2013 agreement has no relevance to current issues around fisheries rights around Rockall.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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The fisheries organisations would have a different view.
Dr. Cecil Beamish:
No. The Tánaiste answered a priority parliamentary question on this the day before yesterday put down by Deputy Gallagher. Yesterday, the Minister met spokespersons from all parties about Rockall, discussed the matters and explained why this was not an issue. That seemed to be accepted.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Okay, I will take that for now.
Is there work ongoing in the Department on the impact to the taxpayer of Mercosur negotiations, as we near an agreement there? I refer to higher quotas of beef and so on. I am interested in the financial impact.
Seán Fleming (Laois, Fianna Fail)
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To what is the Deputy referring?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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It is Mercosur, an international trading bloc.
Seán Fleming (Laois, Fianna Fail)
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Thank you. I am not familiar to it.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Among other things, the proposed agreement will allow South Americans to export beef to the European Union, which would have implications for Ireland. Has any financial analysis been done in the Department on the impact with respect to expenditure and support, or through Bord Bia as it affects the industry?
Mr. Brendan Gleeson:
This negotiation has been going on for 20 years and Ireland has resisted, not the idea of a Mercosur trade deal, but rather the concession of tariff-free tariff-rate quotas, TRQs, for beef. It is a trade negotiation with Brazil, Argentina, Uruguay and Paraguay. To an extent, we have relied for some of our arguments on the Commission's own cumulative impact assessment of the damage that would be done to the European beef sector. That is now several years old. The impact would of course depend on the details of the deal, if there is to be one. We already have approximately 220,000 tonnes of product coming in from South America under other TRQs and the question is how much more would come in under such a deal, over how long this would be phased, the rate of tariff and the quota management system. We have consistently argued that if this is going to be done - we do not want it done - the quota division should arise from the fall of the carcass. If the TRQ is to be 50,000 tonnes, we do not want 50,000 tonnes of steaks to be sent here; the beef should be broken up in the same way as the carcass is divided. Those are the kinds of arguments we have made. The economic analysis has been that the Commission's own cumulative impact assessment-----
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Should we do our own assessment, with the help of Bord Bia and others?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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It would be very informative. Often deals are made in the EU sphere with the benefit of officials, including Irish officials, having done years of work. When it comes to the Oireachtas trying to react or proactively influencing the process, we are blind. If we are depending on data prepared elsewhere and looking at a cumulative impact across the Union, although we are less than 1% of that the impact to us on our own may be huge compared with that cumulative position. I formally and respectfully ask that the Department, with Bord Bia, examine a range of scenarios. We know a figure of 70,000 tonnes has been mentioned but it could be 100,000 tonnes if recent media reports are to be believed. It would be useful. I do not want to stray into the agriculture committee's remit but there would be financial implications.
It does not arise today but within the budget on an annual basis, is there a contingency set aside in case inclement weather leads to a fodder crisis in the autumn and winter months? Is there a set-aside fund in the annual Vote and if so, how much is that?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Sure.
Mr. Brendan Gleeson:
We have a contingency, for example, for potential EU disallowances but it is a fairly nominal amount. We have a large Vote amounting to a gross figure of €1.4 billion and when something like what the Deputy mentions arises, it is either managed from within the Vote or there is a negotiation with the Department of Public Expenditure and Reform. We do not have a specific contingency set aside for weather-related events.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Does Mr. Gleeson think we should, given the lessons of the past?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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We were playing catch-up. Ireland has a temperate climate and some years are great while others are not so good. This is something that can come at us at any time and perhaps a contingency plan is needed, rather than developing one on the hoof when disaster strikes. This can practically happen from time to time and, therefore, X amount needs to be set aside and X plans need to be put in place so the button gets pressed.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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I believe the Department should include it as a significant part of the negotiation with the Department of Public Expenditure and Reform. The Department should indicate that on average it needs an annual contingency of X. Perhaps if it has been a particularly good year, the Department could refund X in December if it has made savings. The farming community generally is so important to our economy and it is entitled to have some confidence that should disaster strike, the Department would have the situation totally in hand and it would not require the Taoiseach and the commander in chief on RTÉ every evening.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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I do not want Mr. Gleeson to say I am wrong or right. I would love him to say, "That is a very good point and when the Department is negotiating over the summer months for budget 2020, we will do that".
Mr. Brendan Gleeson:
It must be taken into account the frequency with which these events happen. It happened last year and it may be that they will happen much more frequently. In those circumstances, we may find it necessary to put aside some contingency. Up to now we have managed those issues from within the Vote. Occasionally there have been Supplementary Estimates to deal with them.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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How well we are prepared or not is a matter of perspective
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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I am sure the individual farmers or farm organisations take that view. The adage is clear - fail to prepare, prepare to fail.
I turn to Bord na gCon and the €16 million it was allocated in addition to its original budget of €80 million. Is the Department aware of the Irish Greyhound Board, IGB, business model analysis prepared by Preferred Results Limited?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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By coming to Mr. Gleeson's attention, has this report been provided to him?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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When did it come to Mr. Gleeson?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Did the Comptroller and Auditor General's office receive this report?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Will the Department forward the report to the Comptroller and Auditor General for advice?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Can the Committee of Public Accounts have a copy of it?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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This kind of refuge is often used to keep things out of the public domain. I have a problem with the need to protect the public from the truth. I am not that interested unless there is some fiduciary reason it cannot be released to this committee. I am interested in taxpayers' money. As a member of this committee, I ask that the report be made available to us as quickly as possible, irrespective. We pay the bills here. Notwithstanding the three card trick that was performed with the Harold's Cross site and the Department of Education and Skills, we have a lot of concerns about Bord na gCon and how it is run.
Seán Fleming (Laois, Fianna Fail)
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Is the Deputy asking Bord na gCon to send it to us?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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I am asking the Department to send it.
Seán Fleming (Laois, Fianna Fail)
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Is it the Department's report?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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This is-----
Seán Fleming (Laois, Fianna Fail)
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The people who prepared the report are the people we should contact.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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In what way? I ask Mr. Gleeson to give me an example. I am not looking for figures but I want an example of something that is in the report - or could be in this report - that he judges to be commercially sensitive.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Does Mr. Gleeson believe there is?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Is it because there are so many other boards in the State that run other greyhound stadia that compete with it?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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I know that but how can it be commercially sensitive-----
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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-----if there is only one board and in effect there is a monopoly on greyhound racing in Ireland in terms of the provision and running of stadia? We divvy up €16 million a year. When they get into a hole for €20 million, we buy something from the board for €20 million that is worth €12 million. This issue has been before the committee previously. When I asked for the valuation of Bord na gCon on that day, it was also termed "commercially sensitive". The real story was not that it was commercially sensitive; it was that my back of an envelope valuation was closer to Savills' valuation. The Valuation Office was retrofitting a valuation to allow Peter to be robbed to pay Paul, but that is an aside. It is very frustrating when Mr. Gleeson, as manager of the line Department responsible for an organisation to which we divvy up €16 million per year and which has not covered itself in glory in recent times with regard to governance, says that he cannot give the report to the committee because the organisation told the Department it was commercially sensitive. The Department would never have received that report were it not for the substantial questioning of Deputy Alan Kelly through parliamentary questions. Now the Department has the report, Mr. Gleeson has read it and he concurs with Bord na gCon. To paraphrase, I am bound to say they did not want to give the Department anything. Through the actions of other people such as Deputy Alan Kelly, the Department has the report and is backing up the board by saying, "We cannot let this out".
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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What date is on the report?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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That is two years old. The Department received it on 24 May and it went through a couple of principal officers for a couple of weeks.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Has it highlighted many problems?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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How will the Department deal with it?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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In the interests of the taxpayers' €16 million and the purchase and sale of the Harold's Cross site, would Mr. Gleeson not like to facilitate the committee in doing the same?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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So give us the report.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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I do not.
Seán Fleming (Laois, Fianna Fail)
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Was Mr. Gleeson aware of the contents of the report before the 2019 Estimates were agreed?
Seán Fleming (Laois, Fianna Fail)
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Is there anything in the report Mr. Gleeson wishes he was aware of when the Department was preparing the Estimates for last year and this year? The Department appears before a select committee to discuss its Estimate and we go into the Dáil to vote on it on the basis of this year or last year and what the Department believes to be the case. Two years after the fact the Department now has a commercially sensitive report that may be significant - I have no idea because I have not seen the report - and it would have been helpful for the State agency under the remit of the Department to be aware of these reports. We have all voted these figures through the Dáil on the blind and it looks as if the Department has been preparing them on the blind without the report. This is our concern. Where is the governance, oversight and control?
Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Did the Minister for Agriculture, Food and Marine see the report?
Seán Fleming (Laois, Fianna Fail)
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Does Mr. Gleeson get the point we make?
Seán Fleming (Laois, Fianna Fail)
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Can Mr. Gleeson reassure us in that regard?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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This report might have said some of those things, might it not?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Would Mr. Gleeson be concerned that the board failed to contact him the day after it received the report in 2017 to say "Secretary General, we are in an awful state" and to invite him to a meeting to see what could be done?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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The board paid for the report.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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It did not come up with the right answers for the board. Is that it?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Were terms of reference given to the company to do the report?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Okay.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Okay. Would it be the case that the board did not like the look of the report and decided to bury it on the basis that it made it look bad?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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How much did it cost?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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All right. Perhaps the Chairman will allow me to ask a few follow-up questions. I know I am coming towards the end of my time. We have known for some time that Bord na gCon has been seeking to implement new marketing and commercial plans and to improve its financial outlook. Has the status of the organisation improved?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Has the financial outlook of the organisation improved?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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We do not have to go back there. We have been through all of that here ad nauseam.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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No.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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I do not want cherry-picked figures. I have asked about the broad headline issue. Is Bord na gCon in a better place now, in terms of its financial outlook, because of what has gone on? It is a yes-no answer.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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We know about the debt being cleared, so let us leave that aside.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Right.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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No, it is just money,
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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I do not care about policy. That is a matter for the Government.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Right. Is the Department satisfied that the commercial income and track receipts for 2018 are accurate?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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I think this is a yes-no question, to be honest.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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There is no problem.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Let us not blame any individual. Is the Department of Agriculture, Food and the Marine, of which Mr. Gleeson is in command on the permanent government side, satisfied that the commercial income and track receipts of Bord na gCon are accurate for 2018? It is a simple question.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Mr. Gleeson's answer is "Yes". Is he saying that he is satisfied?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Okay. There was nothing in the report that suggested otherwise.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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All right. Does the organisation have a marketing director at the moment?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Why does it not have one?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Unfortunately, the board is not here. Mr. Gleeson is here on behalf of the Department, which gives Bord na gCon €16 million. I think we are entitled to get answers. We are either responsible or we are not. Mr. Gleeson has said he is confident that there is no issue. He has said that the gate receipts for 2018 are accurate.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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I do not have it.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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I have to depend on Mr. Gleeson.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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No. That is why I am here. I am here to ask Mr. Gleeson these questions. I do not have the confidence. Mr. Gleeson is telling me that he does. He seems to be falling a bit short of that when he says that there are systems in place and to the extent that the systems are performing he is confident-----
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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That is not really good enough for us.
Seán Fleming (Laois, Fianna Fail)
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I will try to streamline it a bit. Has the Comptroller and Auditor General seen the 2018 audited accounts yet?
Seán Fleming (Laois, Fianna Fail)
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Of course. That is what I am coming to.
Seán Fleming (Laois, Fianna Fail)
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The Comptroller and Auditor General has not seen them yet. We will have to wait for the audited accounts before we can get an answer to the question. I consider that the issues which are being raised are relevant to the audit of the 2018 financial accounts.
Seán Fleming (Laois, Fianna Fail)
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I presume the Comptroller and Auditor General will do his job, as he always does. If information on the matter being raised here is made available in response to a parliamentary question or in a report, it would be incumbent on the Comptroller and Auditor General to have sight of it as part of his audit work for 2018. Then he will report to the Committee of Public Accounts.
Seán Fleming (Laois, Fianna Fail)
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Bord na gCon can be brought in to answer questions as soon as we get those audited accounts.
Seán Fleming (Laois, Fianna Fail)
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I am not making such a suggestion. I am saying we have not seen the figures. The Comptroller and Auditor General has yet to do his audit.
Seán Fleming (Laois, Fianna Fail)
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Of course. It has not been completed.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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I have three more questions.
Seán Fleming (Laois, Fianna Fail)
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If the Deputy has a question that is specific to Bord na gCon, it is within the remit of this committee to bring in Bord na gCon so that such questions can be asked directly. I would say it would be far more useful to do that when we have the 2018 audited accounts from the Comptroller and Auditor General. That is merely a suggestion.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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They are just reasonable questions. That is all.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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When we do a little research before these meetings, it throws up questions.
Seán Fleming (Laois, Fianna Fail)
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It is clear that there is information in there. I am sure the relevant people who have to sign off on the 2018 accounts will need to have sight of such a report if it is commercially relevant. We have to leave the Comptroller and Auditor General do his job now.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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I am helping him to do his job. I ask Mr. Gleeson to give the report from Preferred Results Limited to the Comptroller and Auditor General too. That might assist him in his-----
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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If it transpires that the Comptroller and Auditor General does not have it-----
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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No, the report is from 2017.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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I will give some context. I understand the Office of the Comptroller and Auditor General has written to all of the Departments to ensure it has been given all reports from all agencies under their control. Did that not happen at some stage? Did the Comptroller and Auditor General write to all of the Departments to ensure he has access to the various reports undertaken by agencies and semi-State companies under their control? Did his office seek to make this happen?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Maybe I misunderstood. I have three more questions.
Seán Fleming (Laois, Fianna Fail)
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The Deputy is over time. I want to get other Deputies in.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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I apologise. Is Mr. Gleeson aware of how many Labour Court settlements or other court settlements there may have been with ex-employees of Bord na gCon over the last year?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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That would be good. Mr. Gleeson can come back to us on that. I know that animal welfare is part of a broader €200 million heading within the Department's accounts. Is the Department aware of any animal welfare issues specific to this industry that could expose it?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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We are concerned about that.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Does that expose this country or the Department to financial-----
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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My final question is another "Yes" or "No" question. Does the Department have confidence in the corporate governance at Bord na gCon at the moment?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Is that another way of saying "Yes"?
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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Okay, so Mr. Gleeson does have confidence in the corporate governance.
Marc MacSharry (Sligo-Leitrim, Fianna Fail)
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I thank Mr. Gleeson.
Seán Fleming (Laois, Fianna Fail)
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I call Deputy Connolly.
Catherine Connolly (Galway West, Independent)
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I welcome the witnesses. I am grateful for the presentation of the accounts and the clear audit, subject to the matters that have been raised in the internal financial statement or whatever it is. Some of my colleagues have already asked questions about that. I have one or two specific questions. An internal audit identified a number of serious issues.
The Department tells us on page 5 that it has taken steps and that significant action has been taken. One of the steps was setting an implementation date of the first quarter of this year for the e-risk database. Has it been implemented? We are beyond the first quarter.
Catherine Connolly (Galway West, Independent)
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The answer is yes.
Catherine Connolly (Galway West, Independent)
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That is fine. The dedicated asset management unit was set up in January 2017.
Catherine Connolly (Galway West, Independent)
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Presumably, it has a limited lifespan to deal with the problems that arose in identifying the assets, given the list, and then making sure any new purchase was automatically on the list. That is what I understood.
Catherine Connolly (Galway West, Independent)
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Therefore, there will be a permanent watchdog.
Catherine Connolly (Galway West, Independent)
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What progress has been made since it was set up in January 2017? Where are we in identifying the assets? What changes have been made?
Catherine Connolly (Galway West, Independent)
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I understand that is what will happen, but what about the history and rectifying the absences?
Catherine Connolly (Galway West, Independent)
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I understand all of that.
Catherine Connolly (Galway West, Independent)
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Motor vehicles and plant machinery were mentioned, but what progress has been made? How extensive is the list? Where is the Department with it? How many items have been identified and how many more need to be identified? When will that process be concluded?
Mr. Brendan Gleeson:
We have made our way down through the highest value assets. We are using our IT system to determine whether there is a quicker way to do it than counting every machine. In other words, we are examining whether there is a technological way to count assets. After that we will be down to furniture and fittings. It is a case of tagging stuff and putting it on the register, but we have made progress on all of the big stuff.
Catherine Connolly (Galway West, Independent)
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I understand that, but it is hard to judge progress, is it not? I am asking the question because-----
Catherine Connolly (Galway West, Independent)
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Perhaps Mr. Gleeson will come back to me on it in a little while in order that I can judge.
Catherine Connolly (Galway West, Independent)
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That is all right. I understand we are jumping all over the place, but it would help us to understand. It was identified as a risk; a huge effort has gone into it and a special team was set up. We need to know what has been going on for two and a half years.
Catherine Connolly (Galway West, Independent)
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Going through the accounts, there are a number of write-offs mentioned on page 36. There was a rural environment protection scheme, REPS, and a huge write-off of €406,658 in 2017. Perhaps Mr. Gleeson might explain it.
Mr. Brendan Gleeson:
We had a large number of relatively small historical debts under some of the old schemes where we would have overpaid people and found it difficult to recover them. We made significant progress in setting up a new debt management system in the Department. As we now have a central debt management unit, all of these debts are being managed through it, whereas in the past they were dealt with by individual divisions. We have a systematic way of determining whether something should be written off.
Catherine Connolly (Galway West, Independent)
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They are bad debts, is that it?
Catherine Connolly (Galway West, Independent)
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That amount of money was paid out under various schemes that should not have been paid out, or were the conditions not complied with?
Mr. Brendan Gleeson:
It could be a combination of both. It could be the case that the conditions were not complied with and it was then difficult to recover the funding. If the participant remained in a scheme, the money was recovered from his or her next payment. That was easy enough, but if somebody reaches the end of a five-year contract, it has to be pursued. We had a significant number of these historical debts and came up with this systematic arrangement to determine whether the debt was recoverable, based on whether it had gone beyond the Statute of Limitations.
Catherine Connolly (Galway West, Independent)
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There were various criteria the Department used.
Catherine Connolly (Galway West, Independent)
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How far back would it go and would there be huge variations in the amounts?
Catherine Connolly (Galway West, Independent)
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The payments would have been limited-----
Catherine Connolly (Galway West, Independent)
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-----because they would only have been entitled to a certain amount.
Seán Fleming (Laois, Fianna Fail)
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The Department can give a breakdown.
Catherine Connolly (Galway West, Independent)
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There is another matter I do not understand, namely, the miscellaneous Vote premia. There was a write-off of €136,000. While the officials from the Department are looking for the details, further down it is mentioned that an aquaculture licence expired, was surrendered and not renewed. It is a smaller figure, but will Mr. Gleeson, please, explain it also.
Catherine Connolly (Galway West, Independent)
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I am just asking for a quick answer as to why the aquaculture licence was not renewed. What is the meaning of the figure written off?
Catherine Connolly (Galway West, Independent)
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The Department might come back to me and explainitt out of interest. There are three matters I do not understand on which the Department might come back to me.
Catherine Connolly (Galway West, Independent)
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It is page 36 of the appropriation account. I will leave it for a moment if the witnesses do not have the details, but I am highlighting those issues. There are a number of others-----
Catherine Connolly (Galway West, Independent)
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I mention the list that was referred to. It is an appendix to the accounts on the lands the Department owns. I agree with it. It is great that a State agency owns land. It is set out on pages 40 and 41 where the land is in the various counties. The properties range from 1,000 ha to less than 1 acre. It is a huge range of properties, with which I am delighted. I am delighted that we have property options. How are they managed? For instance, I know that in Galway security firms tell me that they are not involved in managing them. Are there management teams? Are there private companies managing the properties, or is the Department managing them directly?
Catherine Connolly (Galway West, Independent)
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No, they are huge. They range in size from 56 acres to 145 acres.
Mr. Brendan Gleeson:
The larger properties are generally farms. For example, we have a research farm for potatoes in County Donegal and a research farm in County Kildare for bovines. We have a number of farms around the country that are actively managed by the Department. None of them is privately managed.
Catherine Connolly (Galway West, Independent)
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None of them is privately managed or nothing is being outsourced.
Catherine Connolly (Galway West, Independent)
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Very good. I am not proposing that there be sales, but when there are, how are they managed? Were there sales in the last year or included in the 2017 accounts?
Mr. Brendan Gleeson:
We were asked that question. I think there were no sales included in the 2017 accounts, but if there were, they would have been put out to public tender and we would have carried out evaluations. As the Deputy can see, most of the properties are small, but if we were to sell any of them, it would be valued. Incidentally, we have also sent the list to the Land Development Agency. Therefore, if it was interested in it from a housing perspective, it has the list.
Catherine Connolly (Galway West, Independent)
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The Land Development Agency is actively looking at the list.
I refer to veterinary fees and lower levels of testing which are mentioned on page 20. There was a shortfall in expenditure of €5.5 million relative to the Estimate provision. There were also lower levels of testing which resulted in fewer payments. I would have thought veterinary inspectors were essential.
Mr. Brendan Gleeson:
One of the issues is that Ireland is now brucellosis free; therefore, the level of testing required for brucellosis is lower than it has been, although we are still doing some tests to make sure. In 2017 the level of tuberculosis, TB, also declined. Therefore, a lower level of testing was required.
Catherine Connolly (Galway West, Independent)
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What was the planned level of testing that year?
Catherine Connolly (Galway West, Independent)
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I read that note on the shortfall in expenditure. Is it because there is no need to test anymore?
Catherine Connolly (Galway West, Independent)
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It will drop and drop.
Catherine Connolly (Galway West, Independent)
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Okay. On climate change and the report this week, 35 actions have been recommended for the Department. I presume Mr. Gleeson is very familiar with the 35 or maybe he has not had time to become familiar with them. There are 35 specific actions for the Department. How is the Department fixed in relation to those?
Mr. Brendan Gleeson:
There is a sectoral target for agriculture now whereas up to this there was a national target to reduce emissions by 30%. In the context of determining what that target should be, the Government took into account the fact that the forestry and land use sector had already contributed a significant amount of mitigation to the overall national target. We then had a toolbox established by Teagasc, namely a marginal abatement cost curve, that lists actions that might be taken to abate and sequester carbon. As such, there are three pillars to the effort. One is measures to reduce carbon emissions from agriculture. That will involve things like reducing the use of nitrogen-based fertilisers and improved breeding of animals. The second pillar is sequestration. That will involve trying to meet our forestry targets, which is a challenge, planting more trees-----
Catherine Connolly (Galway West, Independent)
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Are we not meeting those at the moment?
Catherine Connolly (Galway West, Independent)
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Is there a reduction in the amount of money the Department is spending on that?
Mr. Brendan Gleeson:
Yes, because we are not meeting the targets. Sequestration will also involve better management of certain kinds of land. For example, there could be land on the margins of bogs which might have to be managed less intensively. There are certain types of mineral soils which may have to be drained. That will contribute to sequestration. The third leg of the stool is the contribution agrifood can make on the replacement of fossil fuels with renewables.
Catherine Connolly (Galway West, Independent)
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I understand all of that. We have all had to read the reports over and over. Every year when Departments have come before the committee, we have asked for this to be done proactively. My question is where the Department is on that and the 35 actions. I understand that one of the actions is to bring back a Teagasc report that was not acted on. Is that right?
Mr. Brendan Gleeson:
It was not a report that suggested we should be doing things. It was the identification of measures that could contribute to a reduction in emissions from the sector. We are doing some of those things already. A significant portion of our CAP budget is dedicated to environmental and climate change measures. We have a programme to improve the breed efficiency of animals and improve the environmental sustainability of farmers but we will have to do a great deal more on that. We have a programme for forestry.
Catherine Connolly (Galway West, Independent)
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I understand. We need to go forward, working together. I am not about divide and conquer, even with carbon tax. Climate change is the biggest risk for us. Over the past two and a half years on this committee, I have not had the sense that Departments are taking it seriously. It is not just the Department of Agriculture, Food and the Marine. I do not have that sense. It does not appear here as a risk. Brexit appears as a risk, not climate change, in the Department's financial statements. Will that change? Does the Department consider climate change to be a risk? On the 35 actions, we are limited. What programme will be rolled out on the 35 actions, when will that be and so on? We had Teagasc before us at one stage and it stated clearly that the trajectory was going the wrong way. It said that publicly. Teagasc is not particularly radical in its statements and I would have thought that one was a cause not only for reflection but serious action. That did not happen. We will be monitoring the 35 actions closely.
Mr. Brendan Gleeson:
The plan requires us to deliver on all of those. I will be accountable to another committee. We are entering a negotiation on a new Common Agricultural Policy and how farmers do those actions will have to be configured. We will also have to use regulation. It will be a combination of incentive and regulation to deliver on all of those actions.
Catherine Connolly (Galway West, Independent)
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We will certainly be monitoring it for as long as we are on it in terms of money because there are huge implications for money. I thank Mr. Gleeson for the detail on the fisheries harbour. There was a special report on that by the Comptroller and Auditor General in 2014 and it contained seven recommendations. There was a general reference in Mr. Gleeson's opening statement that some have been dealt with. Where are we with the seven recommendations? Serious issues were raised about governance and management. I have one last question and then I will be finished.
Catherine Connolly (Galway West, Independent)
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I am never happy with the word "substantial".
Catherine Connolly (Galway West, Independent)
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Substantial planning compliance does not exist but people keep using that phrase. Have the seven recommendations been implemented?
Catherine Connolly (Galway West, Independent)
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Of the ones that were done quickly, how many have been done and completed of the seven?
Catherine Connolly (Galway West, Independent)
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I ask for an update.
Catherine Connolly (Galway West, Independent)
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Which of the seven have been implemented and which have not and why?
Catherine Connolly (Galway West, Independent)
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To go back to property, finally, I was asking about the proceeds of land sales. There was one particular matter on page 31, namely extra receipts payable to the Exchequer. It referred to proceeds of a land sale of €642,000, which was a sizeable sum that I overlooked. What was the valuation process? What was the land and what was the process of sale?
Mr. Seamus McCarthy:
I think I can assist. My notes suggest it was Model Farm Road in Cork and that there was an agreement that 50% of the proceeds would be remitted to the Exchequer while the other 50% would be retained as appropriations-in-aid. What the Deputy is seeing there is half the sale price. Half of the sale price went back to the Exchequer.
Catherine Connolly (Galway West, Independent)
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What happened the other half?
Catherine Connolly (Galway West, Independent)
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Was that an open sale?
Catherine Connolly (Galway West, Independent)
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I see one last thing.
Catherine Connolly (Galway West, Independent)
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Under surrender of Vote, "uncashed cheques" caught my attention, which gave the Department €72,000. Are some people not bothering to cash cheques?
Seán Fleming (Laois, Fianna Fail)
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I thought that after six months a cheque had no validity anyway.
Seán Fleming (Laois, Fianna Fail)
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Are these cheques the Department has not reissued or that were lost in the post? No, they are old uncashed cheques. We will ask for a note on that.
Seán Fleming (Laois, Fianna Fail)
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It is unusual. Most uncashed cheques are reissued.
Mr. Seamus McCarthy:
The way the appropriation account works is that when the cheque is issued to the payee, it is charged to the account. Subsequently, the cash is not drawn from the bank. It sits in the bank. When it is recognised that it is never going to be claimed, it is not the property of the Department and the money should be surrendered to the Exchequer.
Seán Fleming (Laois, Fianna Fail)
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I ask for a note on how that works because it is an unusual figure relative to other Departments. I call Deputy O'Connell.
Kate O'Connell (Dublin Bay South, Fine Gael)
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What is the schedule for voting today? It is 12.49 p.m. now.
Seán Fleming (Laois, Fianna Fail)
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There are two votes at 1.02 p.m. The Deputy has 15 minutes.
Kate O'Connell (Dublin Bay South, Fine Gael)
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I ask in terms of timing and other members.
Seán Fleming (Laois, Fianna Fail)
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Everyone else has been in once.
Kate O'Connell (Dublin Bay South, Fine Gael)
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I understand that and I am fully aware of that, but some people who were not lead questioners had almost 30 minutes so I feel that I am against the clock.
Seán Fleming (Laois, Fianna Fail)
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You have ten minutes-----
Kate O'Connell (Dublin Bay South, Fine Gael)
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I know what I have.
Seán Fleming (Laois, Fianna Fail)
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I am going to give you at least 15 minutes, Deputy. The lead speakers and the second speakers get most of the time.
Kate O'Connell (Dublin Bay South, Fine Gael)
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I understand all that. The third speaker is my issue.
I thank the officials for attending this morning. I want to go back to the assets issue that has been raised several times, including tagging items and putting them on the register. Up to 2017, when a microscope, bailer or testing kit was purchased with Department money, no one put a sticker with a reference number on the item and entered the information on a spreadsheet. Is that the way the Department was doing business? It is a yes-no answer - I am under pressure for time.
Kate O'Connell (Dublin Bay South, Fine Gael)
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What was the Department doing?
Mr. Brendan Gleeson:
There were several efforts to go around and put stickers on things, but the information was not always making its way on to an asset register in a formal way. We did not have a system that forced people, when they were in the procurement system, to put things on the asset register. It was flawed.
Kate O'Connell (Dublin Bay South, Fine Gael)
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If someone put in a request to buy a bailer, for example, the Department's control of that situation ended. Is that accurate? The Department gave it to the person in agriculture college who needed it and that was the last the Department saw of it in terms of registering it on paper. Is that the case?
Kate O'Connell (Dublin Bay South, Fine Gael)
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It does not really matter. Mr. Gleeson referred to motor vehicles. Are we talking about tractors, motor vehicles, telephones and computers? Are we talking about every asset?
Kate O'Connell (Dublin Bay South, Fine Gael)
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There was no formal procedure before 2017 for tagging and registering post-procurement. Is that correct?
Kate O'Connell (Dublin Bay South, Fine Gael)
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It did not work.
Kate O'Connell (Dublin Bay South, Fine Gael)
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Is that not an astounding lack of governance on the part of the Department? It is a vast amount of money.
Kate O'Connell (Dublin Bay South, Fine Gael)
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There is a figure of almost €12 million in assets. That is such a vast amount to fall under office equipment and other machinery. I understand it is different from most offices, but it is an astounding amount of money over which the Department had no governance.
Is a figure lodged on the balance sheet when the Department buys a new piece of equipment? I assume in the agricultural colleges the modern injectors for slurry are bought and people are not spreading slurry up into the air. Do we have any figures entered anywhere on the accounts for second-hand sales of depreciated assets? Such figures would show what we do with old machinery that is defunct.
Kate O'Connell (Dublin Bay South, Fine Gael)
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I am referring to assets that have been disposed of.
Kate O'Connell (Dublin Bay South, Fine Gael)
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They are noted as a sale. They were sales pertaining to old equipment that has been replaced. Is that correct?
Kate O'Connell (Dublin Bay South, Fine Gael)
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Great, it has not all fallen off.
Kate O'Connell (Dublin Bay South, Fine Gael)
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A figure of €81,000 is entered for selling bits and bobs.
Kate O'Connell (Dublin Bay South, Fine Gael)
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That is for a one-year period.
Kate O'Connell (Dublin Bay South, Fine Gael)
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The Department is doing well with this list of assets. The Department is making good headway in response to what was raised. Is that correct?
Kate O'Connell (Dublin Bay South, Fine Gael)
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How does the Department know it is making good headway if it has no idea how many assets there are? If the Department does not know what is there, how does it know whether it is 20% through or 60% through the spreadsheet? Is this simply a feeling?
Kate O'Connell (Dublin Bay South, Fine Gael)
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If the Department does not know the global figure in Ireland, then how does it know how far it is into registering the assets?
Kate O'Connell (Dublin Bay South, Fine Gael)
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Is everything on that register now?
Mr. Brendan Gleeson:
No, we are involved in a project to make sure. I could say everything is on the register and I might not be right. What I am saying is that we are working our way through it in a systematic way from the highest value assets down. We have made substantial progress. The focus has been on the most valuable assets, including motor vehicles, plant and machinery. That is all done.
Kate O'Connell (Dublin Bay South, Fine Gael)
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We had that already.
Kate O'Connell (Dublin Bay South, Fine Gael)
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How does the Secretary General know how far down the road the Department has gone with this? How does he know how far the Department is into the process if he does not know the value of the motor vehicles or microscopes or how many the Department had?
Kate O'Connell (Dublin Bay South, Fine Gael)
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That is not really my point. How does the Department know how much headway has been made if it does not know how much is out there?
Kate O'Connell (Dublin Bay South, Fine Gael)
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Is that the figure of €81,000?
Mr. Seamus McCarthy:
The Department really had not made progress by the time the 2017 appropriation accounts were done. I have the draft 2018 figures but I will not give a figure. However, there is a much more significant disposal in 2018. Progressively, as the Department takes items off that list, I would expect to see it coming through in big figures with big adjustments.
Kate O'Connell (Dublin Bay South, Fine Gael)
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It will be interesting to see how, from the time the governance started, the disposal figure will rise. It will be interesting to see what that implies about what happened beforehand. That is a block of work.
Kate O'Connell (Dublin Bay South, Fine Gael)
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The Department operates the animal identification and movement system, AIMS. Is there any requirement under legislation for this animal data to be visible to the proprietors or owners of beef factories? I cannot understand it. I know the point of the register. I understand it attracts the age and breed and so on - I am from rural Ireland originally, although I am a Dublin Deputy - but is there any requirement? Is it necessary for factories to see that data?
Kate O'Connell (Dublin Bay South, Fine Gael)
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I understand that. I know the purpose of it.
Kate O'Connell (Dublin Bay South, Fine Gael)
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Does Mr. Gleeson accept that this data could be used by beef processors to manage and control supply and demand within the beef sector? I am asking these questions in light of the stresses on the beef sector due to the world as it is now as well as Brexit. We have heard people speak about the €100 million for beef. We are putting in money to help our farmers but sometimes there are other ways of doing it. I will try to hammer down the question. Does Mr. Gleeson accept that this data could be used or is being used by beef processors to manage the supply chain? They know what is coming on track in terms of what is coming into their factories to be killed. It is a yes-no answer.
Kate O'Connell (Dublin Bay South, Fine Gael)
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Mr. Gleeson does not need to be; it is really a data issue.
Kate O'Connell (Dublin Bay South, Fine Gael)
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Is Mr. Gleeson talking about the Department managing it properly or those in the beef industry managing it?
Kate O'Connell (Dublin Bay South, Fine Gael)
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I know that; I have worked in a plant.
Kate O'Connell (Dublin Bay South, Fine Gael)
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Mr. Gleeson is telling me today at the Committee of Public Accounts that only data relating to the animal being presented for sale can be looked at. Is that correct?
Kate O'Connell (Dublin Bay South, Fine Gael)
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Moreover, those in the beef industry are not able to look and see how many six-month old beef bull calves are coming on stream. Is that accurate? They do not have access to that information. Is that the position?
Kate O'Connell (Dublin Bay South, Fine Gael)
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The point of my questions was that I assumed, and was under the impression, that they had access to these data.
Mr. Gleeson is telling me now that it is only on animals presented-----
Kate O'Connell (Dublin Bay South, Fine Gael)
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The animal is registered at birth with a tag and it is in the system. I am just trying to get this straight in my head. Let us say I own a calf. I register him when he is born but that information is hidden from the beef processor until the day I sell my calf to the factory for killing. Is that correct?
Kate O'Connell (Dublin Bay South, Fine Gael)
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Do the data become available on the day the animal is presented?
Kate O'Connell (Dublin Bay South, Fine Gael)
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Perfect.
In terms of the €100 million Brexit fund for beef to which Deputy Aylward referred, Mr. Gleeson suggested this could mean a reduction in beef herd numbers. I am worried about that. We are number one for efficiency vis-à-visgreenhouse gas emissions in the dairy sector and number five in the beef sector. We are improving all of the time in terms of education and Teagasc is doing great work with genomics and so on. I understand the argument here in terms of climate change, agriculture and the pressures we are under. However, greenhouse gas is in the air above all of us in Europe. We are exporting over 90% of our agricultural products and are feeding almost 60 million people in Europe. We are now looking at feeding people further afield. Why would it be efficient to reduce beef numbers? We have to eat. Would it not be much better to invest the money in breeding, genomics and improving our number five position in Europe to number one or number two? Obviously if there is a hard Brexit and the beef industry is hit very hard, farmers will need a subvention in order to be able to pay their bills but in terms of the longer-term use of taxpayers' money, it does not seem to make any sense for the Secretary General of the Department to propose a voluntary reduction in beef numbers. Perhaps I am pulling him up on the wrong point but I would have thought his remit was to promote beef and the efficient production of same.
Mr. Brendan Gleeson:
My remit is to serve and implement Government policy. In the context of the fund for beef, that is the subject of an implementing regulation at European Union level. The implementing regulation is a market measure designed to help beef farmers through a very difficult market situation. The conditions in that regulation were determined by the European Commission. The title of the regulation is "Temporary Market Adjustment". The college of the Commission, when this was approved, inserted a requirement that there be some market adjustment required of Ireland. That is not something we sought. I was simply trying to read into the minds of those who crafted this and I am assuming that they looked at it and said it was a market issue which requires some kind of market adjustment. It is not connected to climate change but is a condition of-----
Kate O'Connell (Dublin Bay South, Fine Gael)
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It is a market-----
Kate O'Connell (Dublin Bay South, Fine Gael)
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There is no stipulation that the market adjustment must be a reduction in beef headage.
Kate O'Connell (Dublin Bay South, Fine Gael)
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That could be one of-----
Kate O'Connell (Dublin Bay South, Fine Gael)
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Okay, that is fine.
The Department gathers a lot of information on antibiotic use, veterinary prescribing and so on. How are those data managed? What is the Department doing with it? Is it looking at it from the point of view of antibiotic resistance? Is it looking for geographical spikes in usage? A lot of powdered antibiotics are used in the poultry and pigmeat sector. Is the Department looking for antibiotic black spots? Is that what it is using the data for or is it just purely a data collection exercise?
Mr. Brendan Gleeson:
We have a residue monitoring plan, which was approved by the Commission. We have to go out and check for this stuff and we do it on the basis of random selection, as well as on the basis of risk. When we see the results of previous years, we feed that into a risk analysis system to determine what we will do in the following year. More generally, on antimicrobial resistance, AMR, we are working very closely with the Department of Health on the One Health Initiative, which coalesces animal and human health as part of the same dynamic. We are working to try to encourage farmers to use less antibiotics and are working with veterinarians to send out that message. There are a number of initiatives under way under the One Health Initiative.
Kate O'Connell (Dublin Bay South, Fine Gael)
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Is horticulture part of the remit of the Department too?
Kate O'Connell (Dublin Bay South, Fine Gael)
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Antibiotics are used in the production-----
Kate O'Connell (Dublin Bay South, Fine Gael)
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In terms of the One Health Initiative, Deputy Harty organised a meeting here yesterday on microbiomes and antibiotic resistance. In the context of agricultural practices feeding into human health and environmental health, would it be a good idea to have an Oireachtas committee that meshes these issues together? I sit on the health committee but we never discuss the effect of the world of agriculture on the world of human health. There seems to be a lack of connectivity in that regard. Issues like water run-off, slurry being spread on land and so on all feed into this. We had the Environmental Protection Agency, EPA, in before us recently and we discussed drug residues, both illicit and legal, in our water table. It seems strange to me that the Oireachtas does not have a joined-up, whole world approach to this involving the EPA and the Departments of Agriculture, Food and the Marine and Health all working together and feeding through the same information. There is no point in the Department of Agriculture, Food and the Marine doing great work, gathering data on antibiotics if pharmaceutical and human health interests are not using it. Does Mr. Gleeson understand my point?
Mr. Brendan Gleeson:
I am always reluctant to recommend the establishment of another Oireachtas committee but the Deputy's point is very well made. This is a continuum and that has already been recognised by the various agencies that are dealing with human and animal health. We are working together on AMR and there is definitely a connection to the environment as well. What the Deputy says makes sense.
Kate O'Connell (Dublin Bay South, Fine Gael)
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Has Mr. Gleeson any knowledge of human effluent being moved from Dublin to be spread on agricultural land in rural Ireland?
Kate O'Connell (Dublin Bay South, Fine Gael)
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As Deputies, we get queries at times about which I wonder. There is no movement of human sewage for spreading on agricultural land of which Mr. Gleeson is aware. Would that be an issue for the Department of Housing, Planning and Local Government or the Department of Agriculture, Food and the Marine?
Mr. Brendan Gleeson:
It would probably be an issue for Irish Water but if it was to be spread on agricultural land, we would have a role in determining whether that is permissible. I am not aware of it happening but the issue certainly came up a few years ago in the context of the treatment of sewage. At the time, although my memory of this might be imperfect, we looked at quality assurance schemes and so on but felt that it was not consistent with our objectives under quality assurance.
Kate O'Connell (Dublin Bay South, Fine Gael)
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If there was anything happening in terms of sewage, raw or otherwise, being used for agricultural purposes, the governance would be for the Department of Agriculture, Food and the Marine. Is that correct?
Seán Fleming (Laois, Fianna Fail)
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The local authorities have a role in that regard, which I will go back to when Deputy O'Connell is finished.
Kate O'Connell (Dublin Bay South, Fine Gael)
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Finally, on farm safety, is the Department working with schools? Does it have a joint programme with the Department of Education and Skills? We have had a lot of tragedies this year. A lot of children work on farms, which is a normal part of rural life. On most issues, we try to engage people at a young age, in terms of the environment and so on. Is money being invested in that area? Is there a plan?
Mr. Brendan Gleeson:
We have participated in campaigns but our contribution in recent years, from a financial perspective, has mainly been in the context of on-farm investment, whereby we provide various pieces of equipment, including lairage equipment, that make farms safer places in which to work. However, the numbers are going in the wrong direction again. As a collective, including the industry, farming bodies and all stakeholders, we must do much more and as a Department, we must reflect on how we deliver on that.
Kate O'Connell (Dublin Bay South, Fine Gael)
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It has to come from the Department. We must get to the children when they are young. Children learn bad habits from their parents on the farm as much as anything else.
Kate O'Connell (Dublin Bay South, Fine Gael)
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But not children.
Kate O'Connell (Dublin Bay South, Fine Gael)
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Does Teagasc receive an education budget from the Department?
Kate O'Connell (Dublin Bay South, Fine Gael)
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Is Mr. Gleeson aware of any plan to roll out something in schools for children brought up in rural Ireland and on farms?
Kate O'Connell (Dublin Bay South, Fine Gael)
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I think it would be a good idea.
Kate O'Connell (Dublin Bay South, Fine Gael)
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Under which Department does it come?
Seán Fleming (Laois, Fianna Fail)
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It is the Department of Business, Enterprise and Innovation.
Kate O'Connell (Dublin Bay South, Fine Gael)
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We might call the HSA in to have a look.
Kate O'Connell (Dublin Bay South, Fine Gael)
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There are many players on the pitch but the whole question is one of farm safety. If one does not get children when they are young, one can forget it.
Seán Fleming (Laois, Fianna Fail)
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Votes have been called in the Dáil so we will conclude in the next few minutes. The committee will return at 2.30 p.m. for a meeting in private session with Mr. Alan Morgan, former valuer with the OPW.
Following on on the matter of farm safety, the annual report states that farms were the largest category of workplace fatalities in Ireland. There were 24 incidents, of which 14 were people over 65 years. It was mentioned at a previous meeting - I do not recall if it was with Mr. Gleeson or his predecessor. While he says it is a matter for the Health and Safety Authority, I make a plea to him, as I did on the last occasion, that someone in the Department take a bit more interest in it. It might be done through Teagasc or another body. Now that the economy is picking up, people who might otherwise have been available to work on the farm are gone. It is grandfathers who are doing all the work now. I look at my county, and most of the farmers are in their 70s because their sons have gone out to work. They are trying to do the work and maybe their sons or daughters help out in the evening. I can envisage this getting worse because more people are working on their own on farms. Years ago, there would have been two or three people working on a farm, but now it is only one. People are working alone with big machinery and if something goes wrong with it or an animal does something it is a problem. I know it is a policy issue but in the interest of people working in rural industry, I ask the Department to take some initiative. I know Teagasc has done something on it, but more needs to be done. If there were 24 deaths in the health sector, which is the biggest employer in the country, people would be up in arms, or similarly in the construction sector. Because the fatalities are so dispersed and are one here or there, it is not as visible. Mr. Gleeson will get the point I am making. We need more to be done, and I worry it will get worse.
Seán Fleming (Laois, Fianna Fail)
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The farm organisations have a role. We understand.
Seán Fleming (Laois, Fianna Fail)
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I am just making the point that it is a difficult situation.
Will the Department send the committee figures on staff by location, including the office in Dublin, Cavan, Clonakilty and Portlaoise? I know there is a map showing the Department's offices but will it provide a list of staff by county or location?
Seán Fleming (Laois, Fianna Fail)
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The matter of the OPW and leasing buildings versus buying buildings was discussed prior to this session. Will the Department send the committee the leasing building costs in each location? Mr. Gleeson will know that I have a specific interest in Portlaoise, but if it is relevant to Portlaoise it is relevant to several other key locations. We would like to know how much the Department is spending on leasing, by county or location, including for Portlaoise.
Seán Fleming (Laois, Fianna Fail)
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The Department should have that information by premises.
Seán Fleming (Laois, Fianna Fail)
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It will be on a printout. That is important. Is Mr. Gleeson satisfied about the premises in Portlaoise? There had been a plan for additional staff to come down, this was in the same building. Does the Department still own the site? That never progressed, in any case. Where is the Department at on this?
Seán Fleming (Laois, Fianna Fail)
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Will the Department send us a note on that?
Seán Fleming (Laois, Fianna Fail)
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Other Departments are also using some of the building. The Department of Employment Affairs and Social Protection is there, as is road testing, and the Probation Service.
Seán Fleming (Laois, Fianna Fail)
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The Department should send us the note it has on that, so altogether we seek notes on farm safety, location of staff and leasing costs.
Food safety follows on from what the Deputy was speaking about. She is a member of the health committee. It could take a step back and deal with some of the issues that are in its remit, and bring the issue back to the producer. The health committee could stretch back to that. Is the Food Safety Authority of Ireland a separate organisation or is it under the remit of the Department of Agriculture, Food and Marine?
Seán Fleming (Laois, Fianna Fail)
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That is what I am coming to. I have scoured - sorry for using agricultural word - I have examined in detail -----
Seán Fleming (Laois, Fianna Fail)
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I am reading about food safety, but I do not see reference to the Food Safety Authority of Ireland, FSAI. I presume it is elsewhere.
Seán Fleming (Laois, Fianna Fail)
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Which sector?
Mr. Brendan Gleeson:
It is under the Department of Health. There is an unusual arrangement in Ireland. The Food Safety Authority of Ireland is at the top of a pyramid over several other agencies. For the purposes of food safety, the Department is one of those agencies. We operate on the level of a service level agreement with the FSAI. That is something we agree periodically. It comes down and audits us on the standard set. We work with the FSAI. It provides independent scrutiny of what we do but it comes under the remit of the Department of Health.
Seán Fleming (Laois, Fianna Fail)
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Even though the title of Mr. Gleeson's Department is Agriculture, Food and Marine, the Food Safety Authority of Ireland is not under it.
Mr. Brendan Gleeson:
Food safety is a regulatory function. There must be some sort of external oversight. The FSAI is part of that external oversight and the other part is the Food and Veterinary Office of the European Union, which is located in Grange in County Meath. Our food safety systems are also audited and inspected by external bodies.
Seán Fleming (Laois, Fianna Fail)
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The Comptroller and Auditor General wishes to come in.
Seán Fleming (Laois, Fianna Fail)
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That is fine. It is under our remit. I just thought that it would be in the Department of Food, Agriculture and Marine, but that is probably historic. The Department used to be the Department of Agriculture, but is now also Food and Marine.
Seán Fleming (Laois, Fianna Fail)
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Will the Department send us a note on the relationship or how the system works? I am not looking for the service level agreement or anything but just an information note.
I wish to raise two other points. I was disappointed to see the figure in the accounts for grants to the organic sector. In 2016 is was €53.566 million and in 2017 it was €45.063 million, a reduction of €8.503 million. It says the scheme is closed to new applicants and payments are progressing as profile. Why in this day and age, with climate change and climate action, and health and food safety, would we close down grants to the organic sector? I am baffled. Will Mr. Gleeson explain?
Seán Fleming (Laois, Fianna Fail)
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That is fine. It says the scheme is closed to new applicants. The Department is letting the old scheme run out or expire but why are there not new people coming onto it every year? Surely people want food that is produced organically. I know it can be more expensive and it may be a niche market but if the Department of Agriculture, Food and Marine has stopped the scheme to encourage people to produce organic or the grant system will not be renewed, that is something people these days would find to be seriously remiss. What is the thinking?
Mr. Brendan Gleeson:
Organics are a really important part of the sector. There is no doubt about it. We have travelled to a lot of markets and there is inexhaustible demand for organic produce. It is important. One of the difficulties is that we have to get the big processing sectors interested in organic produce, which is not easy. In the context of the schemes, it is a function of managing a limited budget over a period of time and assessing demand. In a way, the Chair is asking is a policy question. The scheme was phased out at that time and reopened in November 2018.
Seán Fleming (Laois, Fianna Fail)
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What is the ballpark estimate for the coming year?
Seán Fleming (Laois, Fianna Fail)
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The Department would hope to build it up again. Mr. Gleeson might send a note on the old scheme and the new scheme. It jumped out at me to see that this, of all schemes, had been closed for a period.
Seán Fleming (Laois, Fianna Fail)
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Mr. Gleeson has been asked a few times about the fixed assets. He is going to say the Department is working on it but we know that. However, I find what is in front of us to be extraordinary. I am only talking about the office equipment and other machinery, not buildings or anything like that. There was a cost valuation of €233 million and depreciation of €221 million. The net value of the assets was €10 million. That is what the balance sheet shows on page 13. It shows the Department had additions of €5.5 million in 2017. The Comptroller and Auditor General informs me there were additions of €3 million in 2016 and €4.7 million in 2015. Even allowing for depreciation on what was purchased in 2015, 2016 and 2017, they would have a net asset value of €10.6 million. If those figures mean anything, they are saying that everything prior to that had been at 100% depreciation. Are those figures based on the time since the foundation of the State? We would want to be going back 70 years to have purchases of office equipment of €232 million given that the Department is spending €3 million to €5 million a year. Is that figure inclusive of figures that are 60 or 70 years old? It seems that way to me. The Department should forget about trying to update that register if it has stuff going back 70 years.
Mr. Seamus McCarthy:
What I would expect is a comprehensive review of the fixed asset register and a cleaning up of the figure here. There will be massive write-offs into the future. While good progress is being made, we are not there yet in respect of the evidence of that and the cleaning up of the asset register.
Seán Fleming (Laois, Fianna Fail)
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Is it a decade's worth? It is several years' worth.
Seán Fleming (Laois, Fianna Fail)
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To get that level of depreciation, we would have to be going back 50 to 70 years. Those figures are so old they are historic. Are other Departments showing similar issues?
Mr. Seamus McCarthy:
Yes, there are similar problems. This is one of the chapters we are working on for this year. We have been talking to the Department of Public Expenditure and Reform about this. There are a lot of problems with it. We need better accounting policies and greater clarity around what is to be in, what is an expectation for write-off and tidying this up. It is not satisfactory.
Seán Fleming (Laois, Fianna Fail)
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People might think it is just about tidying up a register. A register should ultimately link into the financial statement. It should be possible to reconcile them. I would say to the Comptroller and Auditor General that if this is an issue across the board, we may have to take it up with the Department of Public Expenditure and Reform and we may want to have periodic reports arising from it. That schedule has no basis in current day reality. To say the cost of assets is €232 million and there is depreciation of €221 million suggests decades and decades are being included. It means nothing. Some of this stuff might be gone after five or ten years. I would say that very little of that figure could be tracked down in reality.
Mr. Seamus McCarthy:
It possibly does not go back quite that far because there was not a balance sheet in the appropriation accounts until 1994. There would have been assets brought on at that stage. Presumably, they were all in existence at that point. However, it has been accumulating for 25 years.
Seán Fleming (Laois, Fianna Fail)
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We are going back 25 or 30 years. I have made my point. Once we got into that conversation and I looked at the figures, I found them even more strange. We want to finalise things now. Members have gone to vote and we have asked for questions. I thank the witnesses from the Department of Agriculture, Food and the Marine and the Department of Public Expenditure and Reform, who got off lightly today, for their attendance. I also thank the Comptroller and Auditor General. The committee agrees to request the clerk to seek any follow-up information that has been raised and any agreed actions arising from today's meeting.
We will suspend and resume in private session at 2.30 p.m. We will deal with Mr. Allen Morgan, a former valuer with the Office of Public Works, in that private session. Next week we will meet the Department of Health and the HSE to examine the appropriation account for 2017 for Vote 38; the financial statements for 2018 for the HSE, which we mentioned last week; and the Comptroller and Auditor General's Report on the Accounts of the Public Services 2017, chapter 16, control of private patient activity in acute hospitals.