Brendan Smith (Cavan-Monaghan, Fianna Fail)

They were not allowed in the first place.

While market conditions are difficult at the moment, the global demand for meat and milk is forecast to double over the next 40 years and Irish agriculture, and the agrifood sector which is built on it, with the benefit of the investment under the farm waste management scheme, will be well positioned to take advantage of these trends.

As Deputies will be aware, a revised, and greatly improved, farm waste management scheme was introduced by the Department in March 2006 in order to assist farmers meet the additional requirements of the nitrates directive. The amendments to the scheme included, in particular, an increase in the standard grant rate from the previous 40% to 60%, with 70% available in the four Zone C counties, namely counties Cavan, Donegal, Leitrim and Monaghan. In addition, the new scheme provided for an increase in the maximum eligible investment ceiling from €75,000 to €120,000 and removed any minimum income requirements from farming from the scheme so that all small farmers could participate in it.

It is acknowledged that Ireland was in a very difficult position prior to the introduction of the revised scheme in 2006, having been found to be in breach of the terms of the nitrates directive in 2004 by virtue of a judgment of the European Court of Justice. Continued failure to implement this directive to the satisfaction of the EU Commission would have had serious implications for Ireland, including the threat of substantial daily fines and the undermining of EU funding for rural development schemes and the single payment scheme. The annual EU funding to Ireland under both headings amounts to approximately €1.6 billion. To have continued to have ignored those threats would have represented nothing less than gross irresponsibility which the Government was not prepared to countenance.

The immense success of the scheme is demonstrated by the 48,500 applications which were received by the closing date of end-December 2006, of which over 30,000 were received during the final month for receipt of applications. By responding thus to the Government's generous scheme, not only was the farming sector demonstrating a willingness to address the nitrates issue but it was also showing a huge amount of confidence in the future of the sector. Almost 43,000 approvals to commence work were issued to farmers under the scheme prior to the end-2008 deadline for completion of work. These figures are virtually unprecedented within the context of on-farm investment schemes.

The financial commitment of the Government to the scheme has been very substantial, particularly during these challenging economic times, and all of this grant aid comes directly from the Exchequer. This is demonstrated by the fact that €413.7 million was paid out to farmers under the scheme in 2008. This was in addition to amounts of €21 million in 2006 and €114 million in 2007. The high level of expenditure under the scheme last year was made possible by the agreement of this House to a Supplementary Estimate of €195 million, which enabled a further 6,000 farmers to receive timely payments under the scheme during 2008.

The 2008 expenditure of €413.7 million should be seen against the original provision of €129 million in the Estimates. In addition to savings of €53 million, identified in mid-year, and the Supplementary Estimate of €195 million, the Department devoted an additional €36 million to funding the scheme before the end of the year.

The Government places a very high value on the Irish agri-food sector and it was in view of the sector's importance that the Government agreed to fund such a generous scheme in support of an essential infrastructure investment that is every bit as important to the agri-food sector as other infrastructural investments were to other sectors of the economy. There is no doubt the scheme has already dramatically transformed the Irish farming infrastructure through this major injection of capital and it has left the sector well-positioned to meet the highest international environmental standards required of Irish farming, as well as the changing market requirements. It will also continue to strengthen the competitiveness of Irish agriculture into the future as well as protect Irish farmers from the threat to their EU payments.

The deadline of 31 December for completion of investment works under the scheme was an integral part of the EU state aid approval and had to be strictly adhered to. The state aid approval was granted by the Commission on the clear understanding that the scheme represented a once-off opportunity to enable farmers to meet the requirements of the nitrates directive. The Commission consistently reiterated that position, both in writing and to me personally, as well as to our officials on several occasions. Indeed, only recently an MEP representing Leinster was advised of this specific condition.

The imposition of this deadline was known at all stages of the scheme and has been shown in the final analysis not to have hindered the participation of most interested farmers. Despite the urgings of others, I was consistent in my advice to farmers that the deadline would not be revised and that they should spare no effort to ensure the necessary work was done and the paperwork submitted to my Department by the end of December last. All of the evidence suggests this advice was adhered to and approximately 35,000 claims were received in respect of completed works under the scheme prior to the closing date, over 14,200 of which were submitted during the month of December.

In an effort to facilitate those farmers who may, for whatever reason, not have wanted to proceed with the full extent of the project for which they had approval, I introduced a facility whereby the scheme participants could proceed with distinct discrete units of work, for which the Department would provide funding. I am satisfied this important initiative will have been of considerable assistance to thousands of farmers who might otherwise have lost the opportunity to provide important storage facilities.

By 31 December, almost 17,600 farmers had been paid and approximately 17,400 payment claims now remain to be processed. The Department is currently assessing these claims with a view to estimating the overall cost involved in grant terms. Though this review is not yet complete, I expect it will be completed shortly.

I am pleased to confirm to the House, as I have done earlier this week both through the media and again last night at the Irish Farmers' Association national AGM, that all farmers who completed work in accordance with the terms and conditions of the scheme will be paid.

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