Brendan Smith (Cavan-Monaghan, Fianna Fail)

As Ireland is a major food producing and exporting economy, this is good news for the agriculture and food sector and presents us with opportunities into the future. It is precisely for this reason that I have targeted my Department's resources in 2009 at the most productive elements of the sector to ensure that it continues to prosper and continues towards achievement of its full potential.

The Department operates a wide range of schemes and services, all of which came under scrutiny in the preparation of next year's Estimates. I undertook a thorough review of all such schemes before choosing those for which I could prioritise funding. The Department's single biggest and, perhaps, flagship scheme is the Rural Environmental Protection Scheme, REPS, which has some 60,000 participants. I place a particular value on this scheme that meets environmental imperatives and consumer demands. Accordingly, I decided to maintain the scheme in full and have provided additional funding that brings next year's expenditure to €355 million, an increase of 7%. Between 2000 and 2009, the Department will have invested €2.25 billion in funding to REPS participants. This additional funding ensures full payment to those already contracted under both REPS 2 and 3, who opt to see out their existing contracts, as well as those new applicants to REPS 4, who undertake new five-year commitments, and those transferring from REPS 2 and 3. REPS 4 payments include a 17% increase in payment rates.

I have also ensured that commitment entered into in partnership to spend €250 million on a suckler welfare scheme is fully honoured. Such was the success of the scheme that the levels of participation exceeded all expectation. This year's level of participation, at a premium rate of €80 per head, will cost the Department €77 million. It will be necessary to correct the premium rate over the remaining four years of the scheme, but I am committed to the payment of the remaining €173 million over the remaining life of the scheme. The premium rate in the remaining years will depend on the participation rate and at current levels, the premium may have to be reduced by up to half. In respect of 2009, all payments that would ordinarily fall to be paid in late November 2009 will be delayed slightly until early January 2010.

Forestry is a particularly important sector, not least in providing important income to farmers and employment in rural areas as well as contributing significantly to meeting the challenge of climate change. The 2009 Estimate provides €127.7 million for the sector. While, more than €80 million will be directed to payments of premia, mostly to farmers, there will also be generous support for planting and support schemes. The level of funding provided should allow planting to be maintained close to this year's level.

I have also restated my commitment and that of the Government to support the Irish fishing sector through the provision of €30 million, which does not include the funding provided to Bord lascaigh Mhara, with particular prioritised investment in fish processing, aquaculture development and fishery harbours.

Unfortunately, my commitment to the schemes to which I have referred must come at some price and I have, therefore, reluctantly decided to reduce expenditure under the scheme of area-based compensatory payments. The provision for that scheme next year is being reduced to €220.4 million. However, this reduction will be targeted through reducing the maximum hectarage limit on which payments are to be made from 45 to 34 hectares and through a modest increase in the stocking density requirement, a requirement which has been advocated by some farm representatives for some time. Based simply on the reduction in the maximum hectarage to 34 hectares, some 67,000 of the 102,000 participants will experience no reduction in their payments. The modest increase in the stocking density requirement will have an impact on a further small number of scheme participants.

I have also chosen to temporarily suspend entry to both the early retirement and young farmer installation schemes with immediate effect.

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