Brendan Smith (Cavan-Monaghan, Fianna Fail)

They were not frozen. All farmers who complete approved work in accordance with the terms and conditions of the scheme can be assured they will receive grant aid. Total expenditure in 2008 on this scheme will be approximately €377 million. That follows on expenditure of almost €114 million in 2007 and a provision of €125 million for the scheme next year. That is further evidence of the Government's continuing strong commitment to the farming sector and represents a massive level of public support by any standards.

Besides exercising prudence in the use of the funding available we must focus investment on measures that will contribute to the development of a sustainable agrifood sector. The scheme meets those important criteria. We must compete on the basis of quality, productivity and efficiency and ensure that we meet the needs of consumers and society generally. We must also ensure that the sector operates in a manner that is consistent with the preservation of the natural environment. This major investment by Government and by the farming community in the past two and half years will be beneficial for many years to come.

Investment in the farm waste management scheme is consistent with all of those priorities. The scheme represents the biggest ever investment in farm infrastructure and is an enormous vote of confidence in the sector, as too is the investment being made by farmers. That is well justified on the basis of our export performance. In each of the past two years Irish agrifood exports rose by more than 10% and 5%, respectively, to reach in excess of €9.2 billion in 2007. More importantly, a recent analytical study showed that the agrifood industry contributed over 30% of net foreign earnings from the manufacturing sector.

While commodity prices have eased somewhat in 2008, following the peaks of 2007, the medium-term price outlook remains strong and there is general agreement from both the OECD and the FAO that prices are unlikely to return to their historically low levels prior to that recent period. It is estimated that global demand for meat and milk will double over the next 40 years and Irish agriculture, with the benefit of the investment under the farm waste management scheme, will be well positioned to take advantage of these trends.

The Department has operated the scheme in a pragmatic manner in so far as possible. It has shown maximum flexibility in facilitating the receipt of completed application up to end June 2007. That ensured every farmer wishing to participate in the scheme had the opportunity to do so. The high number of applications received and approvals granted confirm that.

The EU state aid approval, to which I referred, allowed us, as an exceptional measure in the context of the nitrates action plan, to offer very generous grant aid under the scheme as a once-off concession on the strict condition that works would be completed by end 2008. Agreement was reached only after protracted negotiations with the European Commission and the closing date was a key element in the negotiations on the state aid approval. We agreed at the time to abide by the date and we have operated the scheme on that basis from the outset, as has the Department of Agriculture and Rural Development in Northern Ireland in respect of its less generous scheme.

The position in regard to the deadline was made clear from the start. It was included in the terms and conditions of the scheme and was widely publicised to all those involved. Farmers, planners and builders were clearly aware of the critical need to adhere to it.

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