Jackie Cahill (Tipperary, Fianna Fail)
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Apologies have been received from Deputy Kehoe.

Members have the option of being physically present in the committee room or they may join proceedings via Microsoft Teams from their Leinster House offices. Members may not participate in the meeting from outside the parliamentary precincts. It is important to note that in order to participate in this, members must be physically present in the committee room. If joining on Microsoft Teams, I ask that Members mute their microphones when not contributing and use the raise hand function to indicate. Members and all in attendance are asked to exercise personal responsibility to protect ourselves and others from the risk of contracting Covid-19. Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against any person outside the Houses or an official, either by name or in such a way as to make him or her identifiable.

The meeting has been convened to consider the Supplementary Estimate for Vote 30 - Agriculture, Food and the Marine, which was referred to the committee by the Dáil on 9 November. I welcome the Minister for Agriculture, Food and the Marine and his officials. The Minister is accompanied by Mr. Gordon Conroy, chief financial officer; Ms Rebecca Chapman, finance officer; Mr. Paul McNally, assistant principal and Mr. Will Farrell. I call on the Minister to make his opening statement.

Charlie McConalogue (Donegal, Fianna Fail)
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I welcome the opportunity to present the committee with this request for a Supplementary Estimate for 2022. I thank the Cathaoirleach and the committee for the opportunity to be here and for facilitating this meeting to ensure this can be dealt with. The Supplementary Estimate is required in order to provide for two exceptional schemes and to make use of savings in the Department's Vote to provide for a spend across several headings.

In gross terms, an additional €93 million is required by my Department to meeting costs that have arisen in 2022 for the fodder support and tillage incentive schemes. These schemes were put in place with the aim of offsetting some of the impact of the Russian invasion of Ukraine on agricultural input costs and insecurity of supply. The Supplementary Estimate also includes funding to meet the additional costs over the original 2022 provision of the recently agreed extension to the Building Momentum public sector pay agreement for the Department and its agencies.

The net amount of €115 million is €22 million higher than the gross requirement. This additional provision is to account for a €22 million reduction to the projected appropriations-in-aid to be received in 2022 under Vote 30 because a European Maritime and Fisheries Fund payment from the European Commission that we were expecting to receive this year is now expected to be received in 2023 instead. The Estimate will also provide for the movement of savings on certain subheads to meet cost pressures arising in other areas, including the World Food Programme, Irish National Stud and grants for farm capital investments.

An additional €93 million is required by my Department to meet the cost of a number of schemes. The first of these is the fodder scheme for 2022. The members will all be well aware of the scheme which was designed to incentivise farmers to grow sufficient grass and conserve fodder, be it silage or hay, for winter 2022 in order to reduce the risk of potential animal welfare issues arising as a result of the impact of the Russian invasion of Ukraine in February and its impact on price and agricultural inputs, especially on energy and chemical fertiliser. The scheme is expected to pay out approximately €54 million in 2022. In addition to the 2022 scheme, a fodder support scheme for 2023, similar to that operated this year, has recently been opened for applications. At present, it is only open to the approximately 71,000 farmers who successfully applied for the 2022 fodder support scheme and who declared 546,000 ha for support. The purpose of the scheme is to incentivise and support farmers to grow sufficient grass and conserve sufficient fodder, that is, silage or hay, for the 2023 winter and to account for the fact the cost of key inputs such as fertiliser, diesel and plastic for the conservation have increased significantly. I am sure the members will join with me in encouraging those who availed of the scheme this year to reapply by the closing date of 5 December. The budget for the scheme is €30 million and the aim is to provide support to a maximum of 10 ha for eligible applicants.

The tillage incentive scheme 2022 is also covered. We are heavily reliant on imported feed materials for the manufacture of feed for the livestock sector. An average of 4.2 million tonnes of feed materials were imported into the country last year and the year before. Approximately 30% of world wheat and maize exports originate from Russia and Ukraine. In the past year, the price of the key ingredients used to manufacture compound animal feed has doubled. The importance of the tillage sector in reducing our dependence on imported feed and in delivering necessary feed stock has therefore never been more evident in light of the crisis in Ukraine.

The tillage incentive scheme aims to support tillage farmers to maintain their current area under tillage production by helping to mitigate the high level of risk in production that is forecast for 2023. The purpose of the scheme is to increase domestic production of cereal grains and proteins to address feed security concerns for harvest 2023 and to reduce our dependence on imported feed materials. The scheme is expected to pay out €10 million in the current year.

Finally, the Estimate also includes funding to meet the additional costs over the original 2022 provision of the recently agreed extension to the Building Momentum public sector pay agreement for the Department and its agencies. The costs were met from savings in the first instance, with an additional requirement now for €4.36 million.

I propose moving €95 million in savings across other subheads. As these proposed transfers and expenditure involve changes to the original 2022 voted allocations, I believe that it is important to seek the committee’s input and approval. The areas where savings have emerged reflect the very dynamic and uncertain environment in which the sector and the Department has operated in this year. Despite the continuing challenges facing the sector, including additional pressures arising as a result of the war in Ukraine this year and avian influenza, in particular, we have continued to carry out our usual business.

Since September 2022, over €956 million has been paid to farmers in respect of their 2022 basic payment and areas of natural constraints schemes. The Department issues these advance payments at a rate of 70% and 85%, respectively, to farmers at the earliest date possible under EU regulations. The remaining balancing payments, at a rate of 30% and 15%, are due to commence in early December.

I will outline where the savings which we propose to use have emerged, starting with Programme A: Food Safety, Animal and Plant Health and Animal Welfare. This year I continued to fund vital services to ensure we have the highest international standards of food safety and quality. To ensure these standards are maintained, I am requesting an additional €6.5 million to bring the non-administration part of the programme to €141.601 million. The reasons for the increase are that there were six highly pathogenic avian influenza H5N1 outbreaks in 2021, and all of these flocks were depopulated. My Department received applications for compensation for animals culled, animal products, and animal feed or similar items that were destroyed in these 2021 outbreaks. To date over the course of this year, €1.9 million has been paid in compensation to owners of animals culled. This compensation was not included as part of my Department’s original Estimates for 2022 and was paid from within existing resources within Programme A earlier this year.

The on-farm market valuation scheme was the principal compensation measure available to herdowners whose herds are affected by disease under the TB eradication scheme. This compensation is based on the market value of the animal, subject to individual animal ceilings under the on-farm market valuation scheme. Buoyant output prices have resulted in strong market prices for both beef and dairy stock this year, which has contributed to the cost of the increase in the on-farm market valuation scheme.

In addition, in recent months the number of reactors per breakdown is increasing which is also impacting on the cost of compensation per herdowner. This additional funding will also fund the Department’s purchase of TB tuberculin supplies which is required for TB skin tests.

On Programme B: Farm Sector Supports and Controls, I am increasing the allocation to almost €992 million. The reason for this increase is the introduction of the two fodder schemes and the tillage incentive scheme which I discussed earlier. These schemes are in subhead B12. My Department continues to operate the large on-farm investment scheme: the targeted agricultural modernisation scheme, TAMS. It is made up of a suite of seven measures and was launched under the Rural Development Programme 2014-2020. The allocation for TAMS for the period 2022-27 is €404 million. To date, expenditure under TAMS II has exceeded €379 million. Payments under the TAMS II scheme continue to issue on an ongoing basis. To date in 2022, we have issued payments of €59.5 million.

Savings of €12 million arising from the less than anticipated take-up of demand-led schemes from subhead B3 are moving to subhead B5 to fund TAMS payments.

An additional €500,000 for subhead B3 will provide investment focusing on the integration of a grass biorefinery and anaerobic digestion at farm level and equipment to facilitate the robust testing of feed additives, which are critical to fill the knowledge gaps, inform agricultural mitigation policy and support implementation at ground level.

I propose re-allocating capital funding of €7.9 million and also €200,000 of current funding from the forestry subhead. This saving has arisen because planting of new forestry, which attracts establishment grants and premiums, is much less than the targeted 8,000 ha. The saving of €200,000 from current funding arises from the less than anticipated take up of funding under the knowledge transfer scheme. This is the final year of the current programme, and it is customary for many to wait and see the details of the new programme before committing to planting. Anyone who will have observed the increased rates which we introduced over the past week will understand that dynamic. There are afforestation licences issued for 7,000 ha which have not being taken up yet.

It must also be noted that a new strategy for forestry, Shared National Vision for Forestry 2050, has been developed along with a new programme for the next five years which awaits state aid approval. The new programme is grounded in this recently published vision which, if achieved, will result in a country with multi-functional and diverse forests delivering multiple benefits for climate, nature, wood production, people, communities, the economy and rural development. The new programme will be the biggest and best-funded forestry programme we have had and will provide unprecedented incentives to encourage the planting of trees that can provide a valuable addition to farm income and help to meet national climate and biodiversity objectives. This funding guarantees continued payments to those forest owners who planted under the current scheme and who are still in receipt of premiums. It also offers new and improved financial supports to those who undertake planting and sustainable forest management under the new programme. We intend to increase premiums for planting trees by between 46% and 66% and, very importantly, to increase the length of time for which annual premiums will be available from 15 years to 20 years for farmers. This will be very significant in respect of the prospective farmers take in respect of embracing forestry.

On Programme C: Policy and Strategy, the funding will increase from €403 million to €443 million. I propose to make a capital investment of €6.2 million in the Irish National Stud & Gardens. The function of the stud is the promotion and development of the thoroughbred industry through provision of stallion services and other supports. It educates future industry leaders through its stud management course and has a thriving tourism business. The Irish National Stud & Gardens has submitted a draft strategic plan to my Department covering the period up until 2025 for consideration. It identifies key objectives which are aligned with the main business areas of the stud and the Government's national development plan. The draft plan also outlines a challenging financial environment for the stud as its principal source of revenue, the lead stallion which we will all be all familiar with: Invincible Spirit, is due to be retired.

The stud is seeking a one-off allotted and fully paid share capital increase from the current figure of €13,768,724 to €20 million to support is core business activities, together with the implementation of the strategic plan.

On the World Food Programme, my Department leads on Ireland’s engagement with it. I met representatives from the programme roughly three weeks ago in Rome and discussed many of the challenges facing us in the year ahead. This programme is funded exclusively from voluntary contributions. It works in partnership with other UN and international organisations, NGOs, civil society, and the private sector also, to enable communities and countries to meet their own food needs.

The World Food Programme also plays a significant role in the UN’s global campaign for zero hunger, Sustainable Development Goal No. 2 of the 17 Sustainable Development Goals agreed in 2016, and is at the forefront of dealing with the migration crisis.

Ireland’s commitment to the WFP, expressed through three-yearly strategic partnership agreements, is €75 million for the period from this year until 2024. The proposed €25 million allocation in 2022 represents an advance on next year’s commitment and it will help save lives by supporting food security and nutrition, and rebuilding livelihoods in fragile settings. It also reaffirms Ireland’s role as a country, as one of the World Food Programme’s most engaged partners.

On access to finance, this is a crucial business need and, as one of the main economic drivers of our national, rural and coastal economy, and as the committee will be aware, it is vital that the agrifood sector has access to appropriate financing. As well as liaising with the main banks on issues relating to the agrifood sector, we work closely across Government on important supports for businesses.

I am pleased that we have been able to progress the new proposed €500 million growth and sustainability loan scheme, GSLS, which will facilitate strategic investment by farmers, fishers and food businesses, and ensuring their continued viability and sustainability into the future. The costs for the GSLS are to be shared by the Department of Enterprise, Trade and Employment and my Department on a 60:40 basis, which will ensure support of up to 40% of lending for the agrifood sector. It is estimated that the €500 million scheme will cost approximately €115 million, with my Department providing €46 million between 2022 and 2026. My Department’s original budget allocation for the Strategic Banking Corporation of Ireland, SBCI, for 2022 was €12.8 million. That was a provisional figure, pending the design and confirmation of a new long-term investment scheme.

Our first year costs for the new loan scheme are currently in the amount of €17.3 million. Therefore, in order to cover the first tranche of costs for the GSLS additional funding of €4.5 million will be required.

The allocation in programme D for the seafood sector has been reduced from €207 million to €199 million. Savings within programme D were identified and used elsewhere within the Vote. Savings in the Sea-Fisheries Protection Authority, SFPA, of €1.7 million in pay are mainly attributed to the delayed timing of on-boarding of new recruits. Non-pay savings of €1.5 million are due to continued savings in support service costs associated with a review of the organisational capacity of the SFPA and external assistance with a review and analysis of significant volumes of historical data in response to an EU administrative inquiry which commenced in 2019. There has also been a significant reduction in the legal and professional fees in comparison with 2021.

I will briefly mention programme E, appropriations-in-aid. As I mentioned, the Department's receipts Estimate has been reduced from €429 million to €407 million because €22 million to be received from the European Maritime and Fisheries Fund, EMFF, is expected next year rather than this year.

This is a necessary and important Supplementary Estimate, which I earnestly recommend to the committee for support. I look forward to the engagement and I am happy to take questions. I am joined by my team, including the recently appointed assistant secretary in the Department, Mr. Gordon Conroy, who started a week and a half ago. He takes over from Mr. Kevin Smith who held the role previously. Best wishes to him in this important role. I am also joined by principal officer, Ms Rebecca Chapman, and assistant principal officers, Mr. Paul McNally and Mr. Willie Farrell.

Jackie Cahill (Tipperary, Fianna Fail)
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I thank the Minister. I will ask a few questions before I go to Deputy Carthy. On the €22 million the Minister said will not be received until next year, what is the reason for the Commission's decision to delay the funding?

On the tillage scheme, how many hectares qualified in 2022? How many new hectares have gone into the scheme? Does the Minister plan to incentivise the same acreage in 2023 to try to incentivise people who have gone into tillage for the first time to continue to grow the crops? It was only for fresh land in 2023. I do not know how much more fresh land will be available. We will still be in the same situation with Ukraine in the spring and we do not know what the summer will bring in 2023. Does the Minister envisage allowing the same number of hectares to be applicable again in 2023?

The Minister used the phrase "buoyant output prices" regarding TB, which might be a bit strong. Prices have improved or are higher than they were in any event. The number of reactors per breakdown is increasing, which I accept fully. However, much of that is due to Department policy. When there are reactors, officials go in immediately for a blood test, which is definitely increasing the number of reactors per herd. That approach could also help get people out of lockdown quicker. I am not objecting to the policy but where there are breakdowns, the fact that the Department has a more intensive testing regime is definitely finding reactors faster.

There must be a focus on testing badgers and wildlife for TB. We saw a report from another committee on the cost of TB. We need to put extra resources into testing wildlife. I am aware of a farmer who found a dead badger the other day and no one in the Department was interested in doing a post-mortem examination. Finding a dead badger is worrying for any farmer. If we are serious about trying to meet our targets for reducing or eradicating TB, we must focus on wildlife. When a farmer reports an incident such as this, there has to be some collaboration with the Department and testing of animals found on a farm. There can be no argument that badgers and deer are a major contributory factor to TB. I would like much greater focus on the TB budget. We must be proactive as regards wildlife.

The forestry programme has been announced and grants have increased significantly. Forestry will be competing in a very competitive environment for land supply for afforestation. We will have to see how the new premiums measure up. The fact that the scheme has been extended to 20 years is definitely an attraction for farmers. That must be welcomed. The committee has focused strongly on forestry and there are still significant challenges in meeting the 8,000 ha afforestation annual target in the programme for Government. I texted the Minister today about ash dieback. This issue must be addressed in the forestry strategy. While this is a separate issue and we are talking about planning for the future, ash dieback should also be addressed in the near future.

The Minister referred to increased funding for the Irish National Stud and Gardens and noted that its star stallion is no longer active. This is a very competitive environment. I understand the national stud does other things besides operating a horse stud programme. The Government should support its many other activities. This is a competitive industry and this country has many of the top stallions in the world standings, be that in national hunt or flat racing. Is the national stud in a position to be able to compete in that competitive environment? Would it be better to focus on other aid for the industry, for example, welfare, improvements in horse breeding etc? Has the time come for the national stud to examine whether it can compete as an active commercial stud with standing stallions? I read today that competition for nomination for some of the top stallions is huge. For people in the horse industry, the national hunt foal sale is taking place and there is a very strong market there. Perhaps a strategic examination of the national stud is needed to identify what part it has to play in the industry. I fully accept that it has an important part to play but perhaps not as regards horses' standing. In the past, it had good fortune and good judgment, both of which probably go together in acquiring very good stallions. It might be hard to do that going forward.

On the growth and sustainability loan scheme, it is very welcome to see money being made available to the agrifood sector. This is a very good development. What rate of interest will be charged on those loans and who will determine it? We are in an environment of interest rate increases across the sector. How will the rate of interest for this scheme be set? Those are just a few observations and questions.

Charlie McConalogue (Donegal, Fianna Fail)
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With regard to the sum of €22 million, we are seeking accommodation from the Department of Public Expenditure and Reform in that regard because those moneys are now expected in 2023. It relates to the withholding of funding under the European Maritime and Fisheries Fund from the European Commission because of our failure to implement a points system, a legal obligation on us dating back more than ten years. We were subject to legal enforcement and a case was brought at European level by the Commission for our failure to do that. The Commission also stalled our funding under the EMFF.

We introduced a penalty points system, probably 18 months ago, so this is the unlocking of the funding which had been withheld. We had already spent it, as such, and we are recouping it. We have been engaging and assessing to see when it is likely to come. We expected it this year but now it looks like it will be the start of next year instead, so we are adjusting the Estimate to reflect that.

Regarding the tillage scheme, it is correct to say there is competition for land use, but it is very important to grow the area under tillage. It is something on which there was a particular focus this year. The €10 million we spent on the scheme was successful and resulted in an overall increase of 25,000 ha converted from grassland to tillage land. There were increases in crops of wheat, barley, oats, maize, oilseed rape, red clover and fodder beet. I will repeat that next year. We want to retain the gains we got this year so we are putting in a €200 per hectare maintenance payment on the land that qualified as additional in the past year.

Jackie Cahill (Tipperary, Fianna Fail)
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Will the 25,000 ha qualify?

Charlie McConalogue (Donegal, Fianna Fail)
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Yes, and also the €400 per hectare payment for fresh ground will be available again. We are looking to hold and to push forward with next year's scheme.

Jackie Cahill (Tipperary, Fianna Fail)
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Will they get half the rate of payment that they got this year?

Charlie McConalogue (Donegal, Fianna Fail)
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Yes, it will be half the rate for the area that has already been brought in.

There is a particular focus on TB. In terms of the increase in prices, I take your point, Chair, on the reference to "buoyant" prices. Stronger prices would be a fairer term.

Jackie Cahill (Tipperary, Fianna Fail)
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It might be a better word.

Charlie McConalogue (Donegal, Fianna Fail)
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I will ensure a spell check is conducted on all texts. I agree that stronger prices are necessary. As we know, at farm level, those stronger prices are being mirrored by increased input costs and, unfortunately, in particular in the beef sector, they have not resulted in increased profits. The TB scheme has impacted in terms of the cost of compensation and that is reflected in the Estimate.

You say, Chairman, that forestry is something the committee has put a significant focus on in the past year. It is also something on which the Department has put a very significant focus because we have had challenges to address. We have worked very hard to resolve the licensing backlog that was there when the Government took office, which had emerged from a court decision that significantly changed the amount of time involved in assessing each licence and, therefore, led to a backlog. That had to be addressed by increasing the staffing complement to ensure licences would be dealt with appropriately, and also to deal with the existing backlog. We have now gone from a situation where in mid-2021 we had a backlog of more than 6,000 licences to around 1,500 now. We have significantly increased afforestation licensing and felling licences this year. We are on course to have the largest area ever licensed for felling by the end of the year. Thankfully, that is significantly addressing the situation and every week we continue to progress the removal of the backlog to a stage where we are at an equilibrium, whereby only the current applications in hand are being processed.

What we need to do now is to turn the dial and see a significant step change in regard to the take-up of forestry by farmers. Today, the Minister of State, Senator Hackett, and I brought to the Cabinet details on the updated afforestation rates. They are very significant and will cause farmers to stop and consider the potential to incorporate forestry into their farm and to have a separate income stream coming forth from that. The change in the payment of premiums from 15 years to 20 years is significant and will cause people to really think about it. If we take the example of afforestation rates for plantations of native trees, per hectare, there will be an annual premium of more than €1,100 a year for 20 years, which is €22,000, that a farmer can expect in income from premiums when he plants the land. That is in addition to the plantation grant that a farmer will receive, which is expected to cover the cost of planting. The other key point is that the €22,000 is tax free. That is a significant incentive that offers real opportunities to farmers to look at areas of their farm on which they can incorporate forestry that would make sense from the point of view of their farm and be significant in terms of the income potential. It would also help to deliver on the biodiversity challenges and climate targets we have. It is a very significant programme and we will encourage farmers to look at it and to examine the potential of individual farms to incorporate forestry.

Ash dieback is an issue we have discussed on a number of occasions in the committee. The Department is considering the approach in regard to it. There is a scheme in place and there have been many representations from you, Chairman, and others on the need to revisit it, which is something on which we are reflecting.

The National Stud is a very significant and successful business model, service and also tourist attraction. A big part of its income over the years has come from Invincible Spirit, who has been a very successful stallion that has been in service for much longer than expected, but he is coming to retirement. The National Stud has a strong strategic plan, one that merits our backing, in terms of the once-off share capital increase to support it. That is why we are investing in that. I have no doubt the National Stud would welcome an opportunity to engage with the committee as well on the merits of the work it is doing.

On the loan scheme, it is established based on the lenders' proposal for participating in the scheme. We have signed off now on a new capital allocation and this Revised Estimate is facilitating that. It will be set by the lenders based on the proposals they are putting in place, but it will be significantly below what the market price would be.

Matt Carthy (Cavan-Monaghan, Sinn Fein)
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I thank the Minister for being present. I wish to put on record that we received the documents relating to these Estimates a couple of hours before the meeting. I will not labour the point, but it is not a good way of doing business. In fairness to the Department, it does not usually happen.

Charlie McConalogue (Donegal, Fianna Fail)
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I apologise to Deputy Carthy. It was only approved by the Cabinet this morning. I accept that it is not ideal.

Matt Carthy (Cavan-Monaghan, Sinn Fein)
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That is no problem. I will just go through questions as quickly as possible because I know other members want to come in. Why is the fodder scheme for next year being limited to 2022 recipients?

Charlie McConalogue (Donegal, Fianna Fail)
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I will be adjusting it for new entrants next year, but this year I want to work to support farmers planning for next year. The cost of fertiliser is a particular challenge. One of the main reasons for introducing the scheme this year was to make sure that fodder-making would continue. It has left us in a good position going into this winter and spring. Stocks are strong. We want to make sure that we are planning even earlier for next year and that is why I am forward-loading next year's fodder scheme this autumn. I will again be encouraging farmers to plan ahead, look at their stocks of fertiliser and to buy ahead as well and make sure they have some in the yard. I am supporting that through an early payment of the fodder scheme. Administratively, it is too big a job to restart the entire scheme in a short period. I expect the vast majority of those who took part this year to participate next year.

We are forward paying all of those who took part this year and allowing people a very straightforward option in terms of applying for next year in advance of this year's payments going out. They will then get a significant part of next year's payment and this year's payment in one go. We will provide an additional opportunity for new entrants at the start of next year.

Matt Carthy (Cavan-Monaghan, Sinn Fein)
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There are quite a number of points I want to speak on so I will be as quick as possible. There was a 13.5% reduction in agri-environmental schemes. Did people leave existing schemes early? Were increased penalties applied? How did this happen? I am fairly surprised that savings of 1% accrued on areas of natural constraint, ANC, given that the payment rate has been static. Why was there a failure to expend all of this?

Charlie McConalogue (Donegal, Fianna Fail)
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I will check the ANC data. The budget of €250 million is the maximum that can be spent. It is based on the number of applicants who applied in 2022 when compared with previous years-----

Matt Carthy (Cavan-Monaghan, Sinn Fein)
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Okay.

Charlie McConalogue (Donegal, Fianna Fail)
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-----and the value of payments to date during the scheme year and the expected payment values at the end of the year. Some 5,000 eligible applications do not meet the required minimum stocking requirements. It has to do with minimum stocking.

Matt Carthy (Cavan-Monaghan, Sinn Fein)
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On the ANC, there were much-needed increases in 2018 and 2019 but it has been static ever since. From the CAP documents it appears the budget of €250 million will remain static for the period. Does the Minister accept that in real terms this means the scheme will reduce in value? He knows it is one of the more popular schemes that supports farmers, particularly those in peripheral areas. Is he concerned that the scheme will be significantly devalued over the coming five years, particularly given the current rate of inflation?

Charlie McConalogue (Donegal, Fianna Fail)
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Where something stays static it means it is not increasing in value with what is happening in the wider economy. That is a fact. As Deputy Carthy knows there are choices to be made when a CAP strategic plan is being put together. I have increased the national funding for pillar 2 for the next CAP by 50%. It has been increased by 50% overall. We could have put more of this into ANC but then there would have been less for other schemes. Overall when we take all of the pillar 2 schemes they have increased by 50% in funding, for example, the beef scheme and the agri-climate rural environment scheme, ACRES, which are very important. This was a choice as the Deputy knows. I consulted very broadly and widely on putting this CAP plan together to try to get as balanced a CAP as possible. There are schemes we would like to be able to do more on if we had more funding. When we got the funding, which saw the highest increase we ever had for a CAP plan, we had to decide how best we thought we could make it work for the sector. This is the profile in relation to-----

Matt Carthy (Cavan-Monaghan, Sinn Fein)
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Let us speak about this. When the Minister says it is the highest level of funding ever for a CAP scheme-----

Charlie McConalogue (Donegal, Fianna Fail)
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For a strategic plan in terms of national funding.

Matt Carthy (Cavan-Monaghan, Sinn Fein)
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So the co-financing element of it.

Charlie McConalogue (Donegal, Fianna Fail)
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Yes.

Matt Carthy (Cavan-Monaghan, Sinn Fein)
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I am sure the Minister accepts that in terms of the overall pillar 2 budget when we account for inflation there will be a reduction-----

Charlie McConalogue (Donegal, Fianna Fail)
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No.

Matt Carthy (Cavan-Monaghan, Sinn Fein)
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-----even accounting for the increase in Exchequer funding.

Matt Carthy (Cavan-Monaghan, Sinn Fein)
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Pillar 1 is static with regard to the basic payment.

Matt Carthy (Cavan-Monaghan, Sinn Fein)
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Yes. So that will account-----

Charlie McConalogue (Donegal, Fianna Fail)
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All of that comes-----

Matt Carthy (Cavan-Monaghan, Sinn Fein)
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For next year pillar 1 will see a 13% reduction on where it was in 2019.

Charlie McConalogue (Donegal, Fianna Fail)
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Pillar 1 has been an ongoing challenge because it is entirely European funding. There has been significant pressure at European level to seek to reduce CAP funding as part of the European budget. This is something we continuously fight against. A significant reduction in the European budget was initially proposed for this CAP period between now and 2027. The Taoiseach fought hard against it to try to get it increased and get it pushed back up. It was pushed back up to a static level for pillar 1. This is something that all 27 member states have to agree to. Ireland was a very ardent supporter of increasing the CAP budget. There is no doubt there has been downward pressure on the CAP budget at European level and this impacts pillar 1. We can only battle as hard as we can and get as much success as we can at European level. Where we have capacity to make a real impact is on pillar 2 funding which is national co-funding. This is where we have increased the funding by 50% and stepped up to the mark on national support for the CAP.

Matt Carthy (Cavan-Monaghan, Sinn Fein)
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For clarity, the Minister accepts now that the level of EU funding under the Common Agricultural Policy coming to Ireland over the next five years accounting for inflation will be a reduction on the previous CAP.

Charlie McConalogue (Donegal, Fianna Fail)
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Pillar 2 funding has increased coming from year-----

Matt Carthy (Cavan-Monaghan, Sinn Fein)
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In terms of the European contribution. We will come to the other point in a minute.

Charlie McConalogue (Donegal, Fianna Fail)
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Pillar 2 funding from Europe has increased also.

Matt Carthy (Cavan-Monaghan, Sinn Fein)
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Accounting for inflation. Is that the Minister's position now?

Charlie McConalogue (Donegal, Fianna Fail)
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We do not know what inflation will be over the coming years. Pillar 2 funding from Europe has increased by approximately 20% if I recall. Pillar 1 funding has decreased by approximately 1% or 2%.

Matt Carthy (Cavan-Monaghan, Sinn Fein)
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In real terms.

Charlie McConalogue (Donegal, Fianna Fail)
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We fought hard to increase this as high as we could. We wanted it to be a lot higher. If we were running Europe ourselves we would have far higher payments in there as part of the overall European budget. As one of 27 we have to fight hard for it. When we brought the CAP home and got the chance to make decisions at national level on how we support it as a Government we stepped up to the mark in a way that had not been seen before with regard to the level of additional funding we put into pillar 2. This is reflected in various schemes such as ACRES. The Deputy knows there is significant engagement and uptake in ACRES at present. It will see farmers significantly increase their payments.

Matt Carthy (Cavan-Monaghan, Sinn Fein)
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Going from GLAS to ACRES incorporates inflation. Does the Minister think people will be better off?

Charlie McConalogue (Donegal, Fianna Fail)
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Absolutely.

Matt Carthy (Cavan-Monaghan, Sinn Fein)
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Under ACRES.

Charlie McConalogue (Donegal, Fianna Fail)
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If Deputy Carthy engages and speaks to farmers-----

Matt Carthy (Cavan-Monaghan, Sinn Fein)
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I have.

Charlie McConalogue (Donegal, Fianna Fail)
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-----who are applying at present the feedback is very strong and the interest is very strong. There is very strong uptake. Our funding for ACRES is an increase of 50% compared with GLAS.

Matt Carthy (Cavan-Monaghan, Sinn Fein)
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We go around in circles on this and I do not think there is an understanding or at least there is not an acknowledgement. If I go into a shop with €10 and fill a basket of goods and the following year I go in with €11 but the basket of goods costs €12 in reality I am poorer. This is where we are with Common Agricultural Policy funding. I do not know why-----

Charlie McConalogue (Donegal, Fianna Fail)
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Not at national level.

Matt Carthy (Cavan-Monaghan, Sinn Fein)
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Yes, in terms of-----

Charlie McConalogue (Donegal, Fianna Fail)
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At national level we are pushing massively higher.

Matt Carthy (Cavan-Monaghan, Sinn Fein)
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In terms of the payments that farmers are going to receive.

Charlie McConalogue (Donegal, Fianna Fail)
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In relation to the pillar 1 basic payment scheme, unfortunately this has been our experience for a number of CAPs. It is something we fight against. Where we get the chance to influence it and bring funding to the table is at national level. I must recognise the support I have received from the Minister for Public Expenditure and Reform, Deputy Michael McGrath, on putting the money on the table so we could run strong pillar 2 schemes.

Matt Carthy (Cavan-Monaghan, Sinn Fein)
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Here is the difficulty. In terms of the payments that most farmers will receive under pillar 1 and pillar 2-----

Charlie McConalogue (Donegal, Fianna Fail)
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Pillar 1.

Matt Carthy (Cavan-Monaghan, Sinn Fein)
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They will be worth less.

Charlie McConalogue (Donegal, Fianna Fail)
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Pillar 1.

Matt Carthy (Cavan-Monaghan, Sinn Fein)
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I am speaking about across both.

Charlie McConalogue (Donegal, Fianna Fail)
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Pillar 1.

Matt Carthy (Cavan-Monaghan, Sinn Fein)
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They will be worth less in real terms.

Charlie McConalogue (Donegal, Fianna Fail)
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No, pillar 1 is static. Pillar 2 is up significantly.

Matt Carthy (Cavan-Monaghan, Sinn Fein)
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Here is the real problem and issue. The Minister knows I had fundamental disagreements with the way in which the previous Government and this Government when it took office approached the EU budget negotiations. I was part of some of the conversations. They did not condition Ireland paying an increase of several hundred million euro into the EU budget on us getting a return through the programmes that were most important. Be that as it may, the battle lines for next EU budget and the next Common Agricultural Policy are already being drawn. If we have an Irish Minister with responsibility for agriculture saying we are better off when clearly we are not we are undermining ourselves for the next Common Agricultural Policy.

Charlie McConalogue (Donegal, Fianna Fail)
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I have not said that at all. I have very clearly outlined with regard to pillar 1 that there has been downward pressure across Europe and we fought hard against it to keep it as high as we could. I have also outlined with regard to pillar 2 that where we have control we are stepping up to the mark and putting money on the table for farmers. Deputy Carthy will get nothing but reality from me on acknowledging the challenge we have and trying to meet that challenge.

Matt Carthy (Cavan-Monaghan, Sinn Fein)
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If the Minister does not understand the realities of what inflation means in terms of figures-----

Charlie McConalogue (Donegal, Fianna Fail)
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There-----

Matt Carthy (Cavan-Monaghan, Sinn Fein)
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I am conscious of the time.

Charlie McConalogue (Donegal, Fianna Fail)
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We fully understand it Deputy. Deputy Carthy is trying to twist things in a way that is totally unrepresentative and inaccurate.

Matt Carthy (Cavan-Monaghan, Sinn Fein)
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No, absolutely not. I have two specific questions. I dispute what the Minister has said. I am speaking about the real value of the money we pay our farmers at a time we are asking them to do much more.

Charlie McConalogue (Donegal, Fianna Fail)
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To be clear, pillar 1 is static. We fought hard against this.

Matt Carthy (Cavan-Monaghan, Sinn Fein)
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It is not. Pillar 2 in real terms is a reduced-----

Charlie McConalogue (Donegal, Fianna Fail)
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Pillar 1 is static. When something is static, then, if there is inflation, that will erode it. Pillar 2 is up 20% at European level. We put it up 50% at national level.

Matt Carthy (Cavan-Monaghan, Sinn Fein)
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In terms of both pillars, the next CAP will mean, in real terms, a reduction for farmers in respect of the payments they receive, compared with where they were at the end of-----

Charlie McConalogue (Donegal, Fianna Fail)
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Pillar 1 is static. If there is any inflation, then that erodes it. Regarding pillar 2, we have put it up by 50% at national level-----

Matt Carthy (Cavan-Monaghan, Sinn Fein)
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Not in real terms.

Charlie McConalogue (Donegal, Fianna Fail)
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Unless the Deputy has a magic ball I do not have that allows him to know what is going to happen in the next five or six years in the context of inflation, and he will have many careers post his political one if he can project in this way, all we know is that this has been a year that has seen challenging inflation levels. What I can do, and what I have done as the Minister, is to deliver an extra 50% in this regard.

Matt Carthy (Cavan-Monaghan, Sinn Fein)
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Okay.

Charlie McConalogue (Donegal, Fianna Fail)
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I certainly hope this is not eroded over the course of the next five years.

Matt Carthy (Cavan-Monaghan, Sinn Fein)
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Well, okay. We will dispute this point and we will return to it, no doubt.

Turning to my two final brief questions, regarding the outlay for the sheep welfare scheme, I see this has been revised downwards to €18 million. This is again a payment that has remained static. In the indicative allocations for 2023-27, this area has been allocated €20 million annually. By my calculations, this will be €8 million shy of what will be required for the increase in payments from €10 to €12 per ewe over the next five years. Has the Government accounted for this? Does it expect to increase the allocation to this scheme or is it that there is an expectation there will be a drop in numbers?

Charlie McConalogue (Donegal, Fianna Fail)
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We are opening this up. The sheep welfare scheme for next year will be for €12 per ewe and it will be for all comers that apply. When profiling the CAP for the next five years, we make the best estimate we can concerning how it will work. This scheme will run based on €12 per ewe. Equally, the Deputy will know as well as I do the representations from sheep farmers seeking to increase this amount. There was no sheep scheme at all at the start of the last CAP. It evolved in the last three or four years. Starting off this new CAP, a scheme is in place which pays €12 per ewe. The objective is to ensure this scheme is open to all who apply. If this scheme then requires adjustments regarding budgeting as we go along, I will certainly work to do the best I can to ensure it is adjusted as necessary.

Matt Carthy (Cavan-Monaghan, Sinn Fein)
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The Minister mentioned that a forestry programme was launched today. What is now the afforestation target for 2023?

Charlie McConalogue (Donegal, Fianna Fail)
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It is 8,000 ha.

Matt Carthy (Cavan-Monaghan, Sinn Fein)
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We are not, therefore, targeting an increase for next year, considering the abysmal record we have had in the last three years?

Charlie McConalogue (Donegal, Fianna Fail)
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I would be very happy if 8,000 ha were to be planted next year because we have not been meeting these targets. This is why we have significantly step-changed in this regard. We have discussed the licensing challenge, which was no help at all and which we have worked hard to resolve. We are now combining what will be an efficient licensing system with a strong and attractive new forestry programme and rates of payment. These new rates are subject to state aid approval from Europe, so it is not a slam dunk. We hope we can get these rates across the line. We want to give clarity to farmers concerning what rates will be in place from January 2023 to enable them to plan. We want people to start planting. I think when people look at this programme and consider it, that they will then look at areas of their farms which might be suitable because this is going to be a significant and attractive income stream. It will provide a certain income stream as well for farmers that adapt. I hope, therefore, to see a significant change from next year regarding afforestation.

Matt Carthy (Cavan-Monaghan, Sinn Fein)
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The significant change, however, is to meet the targets that were set three years ago-----

Charlie McConalogue (Donegal, Fianna Fail)
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If we can deliver 2,500 more hectares next year, and bring the total up to 8,000 ha, then I would be very happy with that outcome next year. We are getting there and we are building this activity, and this would be a good step-change. We can then look at progressing from there.

Michael Fitzmaurice (Roscommon-Galway, Independent)
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I thank the Minister for coming in. I also thank his staff in Agriculture House, and I wish Mr. Conroy the best of luck in his new position. I ask the Minister to be blunt and straight with us and to give it to us as it is. There would be a lot of appreciation for that approach.

To pick up on one thing with the Minister, early on he spoke about forestry. He said many more licences were issued than have been picked up on. The Minister mentioned approximately 5,000 ha or 6,000 ha. I know, the Minister knows and the dog in the street knows that some of these go back three, four and five years. The Minister brought in the green low-carbon agri-environment scheme, GLAS, and other things farmers did not wait around for and will not wait around for. This is the reason these are not being picked up on. The Minister has a job at hand. I do not envy him given the 8,000 ha figure he is looking at, no matter what scheme he brings out. I refer to bringing a bit of confidence back to this area after what has gone on. I know there were issues with licensing and all that.

The Minister spoke of €28,000 being available on a new scheme, when the planting grant and everything else is added together. This is a 100-year project that farmers are giving up their hectares for and this aspect needs to be recognised. If hardwoods are planted in a hectare, then the farmer gets the €28,000. The Minister is 100% right about this. Adding the €22,000 to the €6,000 means the whole lot works out at €28,000. The farmer, though, will never see the hectare again, nor will the next two generations. Who will have the carbon credits off this forestry?

Charlie McConalogue (Donegal, Fianna Fail)
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We want to ensure they go to the farmer.

Michael Fitzmaurice (Roscommon-Galway, Independent)
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Right.

Charlie McConalogue (Donegal, Fianna Fail)
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A framework is being considered at European level concerning how carbon credits, carbon sequestration and carbon trading can be organised.

Michael Fitzmaurice (Roscommon-Galway, Independent)
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Okay.

Charlie McConalogue (Donegal, Fianna Fail)
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The objective here is to ensure these elements remain with the farmer.

Michael Fitzmaurice (Roscommon-Galway, Independent)
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Okay, I am not going to be nit-picking. The Minister knows I have supported him regarding the new CAP. The Minister and his Department officials were in Tuam last night and I think he is in Cavan next week. The more town hall meetings that can be done the better. I would be the first to say that, and it is not popular for members of the Opposition to say this, many farmers must learn or get to know about the different schemes existing. Some of them are still mesmerised by all this. A headline will be seen in the Irish Farmers' Journalabout the necessity of cutting the number of cows, and then farmers will ring up wondering whether it is compulsory, which it is not. Headlines are also seen stating farmers are going to get so much money in organic farming, or whatever, and then we will also see different headlines. They are nearly bamboozled with all the material out there. Getting information to farmers is important, because a fair few quid is available if people follow the money and know how to follow it. It is also extremely important that farmers going into the ACRES or the areas of natural constraint programmes adapt the best measures for them. If farmers are going into riparian zones-----

Jackie Cahill (Tipperary, Fianna Fail)
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Is the Deputy referring to organic farming?

Michael Fitzmaurice (Roscommon-Galway, Independent)
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I am sorry, it is organic. The riparian buffer zone rate is €1,500 per acre. The equivalent figure for permanent pasture is €200 but it is possible to get €300 for organic farming. It is important for farmers to know this information.

I have several queries. Regarding the overseas funding budget, and I see it is in again, I understood we paid all this a few years ago. I remember we were all in here a few years ago and that this had been front-loaded and paid off. Why are we paying it again?

There also seems to be a great deal of money on the fisheries side. I am no expert on fishing, but it seems €6 million has not been paid out in the context of an industry that, from everything I see, is under pressure. I also worry about the €46 million in the context of the environmental schemes. I refer to farmers who did not go back into GLAS or extend their contracts, I presume. This €46 million is a lot of money. If we add this figure to the €3 million for ANCs, then this gives us a total of nearly €50 million that could have been allocated to farmers but that they never got.

The Chair also brought up another issue earlier. We have less spending on tuberculosis even though I think the report yesterday said we are under a bit of pressure on this issue. I was in Brussels yesterday, so I have not read the report. It is, though, important to note this point as well.

Regarding the new forestry programme, and the Minister has spoken about it, my understanding is that there is an increase in funding in the broadleaf sector. If we look at the premium, however, with the rejigging that has been done on the spruce side of things and the percentage of hardwoods that must be brought in, and the extra cost involved in doing that, then the percentage for the people involved in this is very low. It is just a point I have made note of.

I spoke to the Minister last week and in fairness, he has said that young entrants will be brought in and I welcome that.

On the approximate figure of €46 million in respect of GLAS that has not been claimed because farmers may not have land because the lease might be up or whatever and it is therefore a loss to them, can I ask the Minister to do one thing? At the moment, Teagasc planners are telling farmers that in some instances, they cannot take them even though they are with Teagasc. Some people have got phone calls. We have private planners and I spoke to someone who knocked off their phone on Sunday evening because they simply cannot cope with the number of farmers. Can the Minister address this for their sake and that of their home lives, as well as for the farmers who are out there? We are not saying that every farmer in the world is going to get into it but it will cause an awful divide in cases where a planner is saying to someone who was with them for five years that they cannot get to them. This is in the cases of both Teagasc and the ordinary private planners. Can the Minister do it now, rather than at the last hour or the last minute, when the harm has been done and when the people have fallen out with one another? At the moment, people are being refused in respect of doing plans and that is not a good situation. While by no means am I saying that everyone will get in, this is resulting in the planners basically ending up being called X, Y and Z, not the nicest names in the world, because they will not be able to do it. We should give everyone a fair crack at it and hopefully after that we can try to get as many as possible in. I urge the Minister to do that. This is not a populist thing but it is a matter of the planners themselves physically not being able to do it. They have to have an app on their phones and they have to go out and take the photos and it is taking a lot longer than doing something on a desktop. It would be helpful if the Minister could do that.

On the issue of the ANCs, the Minister said that 5,000 farmers did not reach the target. The average ANC amount, if they were all up to the top, is €1.5 million. Are fewer farmers now applying? There is more of a reason than that of the aforementioned 5,000 farmers, because had every one of them been paid the full €3,000 or whatever bar was on the mountains, they would get a higher rate and it would not work out as being near that figure.

Other than that, all I am saying to the Minister is that it would be good if the Department - I know it is doing this - would address these schemes. I am an great believer in town hall meetings. It is a pity in my opinion and although the Department has done a few of them, it might be no harm if all helped out. It would be helpful to know the different schemes that are there for farmers to try to follow and to know what is of the most benefit to them. I welcome the change in the single farm payment. I stood with the Minister in marts on that issue. I welcome the likes of the ANC, even though that payment will stand still. I have always said that one needs acres for the agri-climate rural environment scheme, ACRES, and that it is tough. I was speaking with a farmer today who had 8 ha and it is tough on them because they are trying to find which would be best. In the line of that scheme, the beef data and genomics scheme and the new beef environmental efficiency programme, BEEP, the Minister announced, we need to make sure that the farmers know how to avail of the best moneys that are out there for them.

Charlie McConalogue (Donegal, Fianna Fail)
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I thank Deputy Fitzmaurice for the various points that he has made and for the questions he has asked. At the outset, I recognise the fair wind, the proportionate commentary and the balanced assessment he has given to CAP. I recognise and acknowledge that and he has been fair in relation to the strengths, weaknesses and challenges around what it means and, importantly, what it will mean for farmers. That has not always been the case but it is encouraging to see that Deputy Fitzmaurice calls it out as he sees it and that he calls it out in a balanced way.

First, in relation to the UN World Food Programme, WFP, we forward paid that last year. We forward paid this year's money at the end of last year and we will be doing the same again this year. That has been the case for the last few years. In relation to fisheries, some of that €6 million in fisheries is down to an underspend at the Sea-Fisheries Protection Authority, SFPA, because staff had not started as early as had been projected. Some of the remainder is around delays, mainly in local authority piers and harbours funding, as well as in the drawdown on that in terms of funding that has been committed to.

In relation to forestry, overall, I take the Deputy's fair point about the amount of time needed for native broadleaf trees, given that they will be in the ground for longer. However, for those who want to make a contribution and who want a good income over the next 20 years, the tax-free aspect of it is significant. Ultimately, there will be an income from that. While it will take longer, it will be a good income. If people can see that in 20 years, it will encourage them. We need farmers not to plant their whole farms but to look at their farms to see where it can be incorporated in a way that delivers income and that brings all the many other benefits to the environment and to biodiversity, as well as to the make-up and the assets of the farm. As for the conifers, it is true that the increases are not as significant there but it is still a strong proposition. The commercial value and timeline involved in that is shorter, more in line and more in sight as well.

In relation to ACRES and the extension for planners, I hear what the Deputy is saying. I have been discussing this with farmers and planners from the outset. My phone, I am sure no more than the Deputy's own, has been hopping strongly with messages over the past few days. Deputy Aindrias Moynihan asked me about this in the Dáil yesterday as well, and I told him that I was considering the situation and would bring clarity to it very soon. I understand the pressure that advisers in particular are under. It is a massive challenge-----

Michael Fitzmaurice (Roscommon-Galway, Independent)
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When? How soon?

Charlie McConalogue (Donegal, Fianna Fail)
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It will be within the next day that-----

Michael Fitzmaurice (Roscommon-Galway, Independent)
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That is good, I thank the Minister.

Charlie McConalogue (Donegal, Fianna Fail)
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-----I expect to bring clarity to that. I am working with a team on that at the moment. Within the next day, there will be clarity on that. I acknowledge the work that planners have done. They are going flat to the mat on weekends and everything. It is an issue of needs must here, because we only have a certain window and because we want to get as many in as possible for next year. We therefore only have a certain amount of flexibility but we will bring clarity to that in the next few days. I understand the pressure they are under, as well as the appetite among farmers for the scheme. It is good to see that, as well as the positive feedback from farmers in relation to the scheme. As farmers have got to learn about it, as meetings have happened and as they have started engaging the application process, it has been well received. I want to see as many getting in as we can.

As for the ANC, it is difficult to know from year to year but 5,000 eligible applications did not meet the minimum stocking requirements. In a budget of €250 million, it is hard to be clear on that and we have to make sure that we have sufficient provision. The change and difference there is €3 million this year. I think that covers most of the points that Deputy Fitzmaurice has raised.

Jackie Cahill (Tipperary, Fianna Fail)
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I thank the Minister. He need not reply to this point but I meant to say that we need to focus on the dairy calf to beef scheme going forward. There is always a cloud hanging over live exports. Like Deputy Fitzmaurice said, with more information for farmers and more research from Teagasc, it can be a profitable method of farming and has a future. Sexed semen is getting greater traction and I believe the Minister is accompanying me to see a lab next Wednesday. Much is being done in the sexed semen side of things and hopefully, more suitable animals will be coming out for the beef industry. Extra incentives and extra research into it would have a lot to contribute in meeting different challenges as we go forward.

That concludes the select committee's 2022 Supplementary Estimate for Vote 30 - Agriculture, Food and the Marine. I thank the Minister and his officials for assisting the committee with its consideration of the 2022 Supplementary Estimates and for dealing so comprehensively with members' questions.