Mary Wallace (Meath, Fianna Fail)

I welcome the opportunity to contribute to this debate on the 2007 Estimates recently published by the Minister for Finance. The 2007 Estimate for the Department of Agriculture and Food demonstrates the Government's continuing commitment to the development of the Irish agrifood sector. Over the past ten years, the gross provision for the Department has grown from approximately €990 million in 1997 to €1.638 billion in 2007. The 2007 provision will be augmented by a further €20.2 million of capital savings carried over from 2006, bringing the total funding available next year to €1.658billion. This is an increase of €227 million, or 16%, over the projected gross outturn in 2006.

The 2007 abridged Estimate is a milestone, in that it includes the first year's funding for a significantly enhanced package of rural development and farm waste management measures, following the recent conclusion of partnership discussions with the farm organisations. The measures finalised in the partnership process involve agriculture related schemes worth €6.8 billion over the period 2007 to 2013, including Exchequer funding of €4.7 billion, compared to €2 billion in the current round. This is an increase of 135% in the Exchequer contribution to agriculture-related rural development measures, compared to the previous programme. The agriculture measures in the new rural development programme will also attract €2.1 billion from the EU.

In 2007, we are making provision, as part of the rural development programme, for an important initiative aimed at improving welfare and quality in the suckler herd. The suckler cow herd welfare and quality scheme will, subject to EU approval, involve an Exchequer provision of some €250 million over the next seven years. This measure is part of a structured and coherent approach to the beef sector, designed to enable it to meet the significant challenges that exist and to exploit the opportunities available over the coming decade.

Substantial provision is also made for the main rural development schemes. This includes €257 million in income supports for disadvantages areas, the rates for which are being increased by 8%, €328 million for REPS, for which a 17% increase in rates has been agreed, €79 million for the early retirement and installation aid schemes which, under the new rural development programme, will involve a maximum payment of €15,000 under each scheme and €114 million in subhead L for the forestry programme, for which a 15% increase in premium rates has been agreed.

Ireland's forestry cover is approximately 10% of total land area, compared to an EU average of approximately 38%. It is clear that the sector has significant potential for growth. We are making the funds available through the afforestation provision in the Department's Estimate for the continued development of the sector. Almost €1 billion will be provided over the seven-year life of the rural development programme. Forestry can be a major player in the development of the rural economy. It currently generates employment for 16,000 people, while another 16,000 people are established as forest owners in their own right.

Forestry also has the potential to contribute towards a wide range of environmental issues, including climate change. Over the period of the first Kyoto commitment, our forests will sequester some 2 million tonnes of carbon dioxide every year. Our forests will also supply a sustainable source of timber for building as an alternative to steel and concrete, and for the growing energy market. This is an area which we wish to develop further, and one which is being examined carefully in the context of the national bioenergy action plan. In addition, forests provide wonderful opportunities for recreation and amenity. This is an aspect of the forestry investment which we are at last beginning to value properly. The new rural development programme will, subject to approval at EU level, increase the forestry premium by 15%, maintain premium payments for the full 20-year term currently enjoyed by farmers, and retain the 100% establishment grant for new planting.

Reference has been made in recent days to the Department's projected savings in 2006. Savings are likely to occur in schemes which are subject to variables, such as farmer demand, animal disease trends, the pace of progress on approved projects and market conditions. In recent years, the effect of these variables was further exacerbated by considerable uncertainty in regard to the introduction of the decoupled single farm payment, the impact of the nitrates directive and question marks over derogation and, in the case of some rural development schemes, the relative proximity of a new rural development programme. In the case of forestry, issues such as the price of land, and competing alternative uses for it, were also a factor. It was, nonetheless, absolutely necessary to make provision for potential demand for these schemes in recent years, for which we make no apology. While estimation of the expenditure under these headings will always be subject to uncertainty, there has been considerable clarification of the nitrates directive and the probable shape of the new rural development programme. In addition, the single farm payment is beginning to bed down. We will see the impact of this in demand for a number of our schemes in the future. We will continue to make the necessary funding available for the agrifood sector in the coming years.

There are significant opportunities for all those involved in the agrifood sector to avail of the generous schemes administered by the Department of Agriculture and Food. I urge all those involved in the sector to avail of these opportunities to secure the future of their businesses and for the sector generally.

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