Brendan Smith (Cavan-Monaghan, Fianna Fail)

I thank Deputy Crawford for raising this issue and welcome the opportunity to outline the facts.

By any measure, 2005 was an exceptional year for the farming sector with the introduction of the single payment scheme. Aggregate farm income reached a record level of €2,765 million. This was a 24% increase on 2004, reflecting a once-off overlap in direct payments, as farmers received over €1 billion under the single payment schemes as well as almost €620 million in payments due on the old premia schemes. In addition, these farmers also received almost €570 million in rural development measures such as REPS, compensatory allowances and forestry premia. These measures brought total direct payments to €2,280 million, the highest amount ever in the history of Irish farming. These exceptionally figures fully justify the decision to decouple payments from production.

While the overlap between the single payment scheme and the old premia scheme will not be repeated in 2006, direct payments are expected to exceed 2004 levels, with increased expenditure provided for under the single payment scheme and rural development measures. It should also be remembered that expenditure by the Department this year will be over €3 billion. This level of spending is testament to this Government's commitment to Irish agriculture and our confidence in this sector's future.

This motion speaks of the need to protect farmers' incomes. This is precisely the intention of Government policy and the measures we have taken at both national and international level. Even before the exceptional increase in farm incomes in 2005, the national farm survey estimated that income on full-time family farms was €30,650. The average industrial wage, although not directly comparable, was lower at €29,620 in 2004. These figures were compiled before the exceptional increase in 2005 incomes and I very much look forward to seeing the income figures for full-time farms when they are published shortly. They will show significant further increases and will bear full testimony to the policies being followed by this Government in encouraging the development of the agricultural sector.

The Government's objective is to develop a competitive mushroom sector for the maximum number of producers. This sector accounted for over 38% of horticultural production in 2005. The funding provided by the Department is making a major contribution to the development of the mushroom sector. The scheme of investment aid for the development of commercial horticulture assists capital investment in specialised plant and equipment by mushroom producers. For the period 2000-06, mushroom producers have been approved grant aid under this scheme of approximately €6 million to support investments in the industry to the value of some €17 million. Under the marketing and processing scheme, a total of €1.62 million has been approved in grant aid to support investments to the value of €4.6 million. In addition to this, the aid paid to the mushroom producer organisations in 2005 amounted to €5 million. As Deputy Crawford said, the number of growers has reduced but the output has not decreased. The sector is worth almost €100 million in exports to the economy.

Over the last six months some parts of the European poultry industry have been experiencing market difficulties arising from the publicity surrounding avian influenza. The problem has been felt acutely in Mediterranean countries, while more northerly countries have encountered far fewer problems. In Ireland demand has improved in recent weeks and is now approximately 10% down on normal. The rates of export refunds have already been increased to extraordinarily high levels but their impact has been limited due to low third country demand.

The EU has also decided that exceptional support measures may be considered for the poultry industry. Measures under this framework will be co-funded on a 50:50 basis by the EU and the individual member states. We will shortly propose a package of support measures to the EU Commission for approval and co-funding. At political and official level, we will work to achieve the best possible outcome on the introduction of the most useful special support measures to meet the particular needs of the Irish poultry sector. The Minister and I have had constant contact with this sector and know the difficulties it has encountered. We are determined to support it.

Following a number of successful years for the Irish dairy industry on international and EU markets, 2006 is proving to be more challenging. As the situation developed over recent months, we urged the Commission on several occasions to use the market management tools in a more effective manner to ensure the overall stability of the milk sector. I was, therefore, pleased that the Commission responded to developments on the international markets by increasing export refunds for butter and whole milk powder at the end of April and again at the last milk management committee, when the tender refunds were accepted at a higher level for butter and butter oil.

Since the Luxembourg agreement of 2003 the dairy sector is operating in a new policy framework, where market forces have an even greater influence on the price paid for milk. It is critical that the sector as a whole maintains relative competitiveness and focuses on managing the transition to the next stage of intervention price reductions in July with the aim of maintaining and enhancing industry competitiveness and ultimately farm incomes.

Overall, it is clear that the range of measures taken in the specific sectors mentioned in the motion, as well as the overall results in terms of farm income, show the determination of the Government to underpin the income and viability of our farm families.

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