Brendan Smith (Cavan-Monaghan, Fianna Fail)

During the course of his introductory and concluding remarks, the Minister for Finance referred to the continuing strong growth in export orders for both goods and services and the opportunities to further develop sustained, balanced, export-led growth in the economy. In this context the Minister referred to the important contribution of agriculture and the agrifood sector. I fully endorse the Minister for Finance's comments and wish to refer in some more detail to the key role which the agrifood industry can play in economic recovery, as identified in the Government's national recovery plan and based on the potential identified in the Food Harvest 2020 report which I along with the Taoiseach launched in July. The Food Harvest 2020 report sets the scene for the development of our agrifood, drinks fisheries and forestry sector for the next decade. Getting our future priorities right will be fundamental to growing our most valuable indigenous industry. The report captures the considerable scale and complexity of this indigenous sector. It underlines its unique and special position within the economy and illustrates the potential to grow even further. I am particularly pleased that the report contains concrete suggestions towards which Government and private enterprise can work.

The title of the report, "Food Harvest 2020", defines the potential of the sector to deliver real returns and be at the forefront of our economic recovery. If we make the correct decisions now, then the harvest will indeed be great and the report sets out a comprehensive and considered roadmap for the development of Ireland's key indigenous sector.

The targets set are challenging but they are also achievable. This will not happen by chance. We all have to be committed to make it happen and to achieve the goals which this report sets out based on a vision based on smart, green growth. Ireland's agrifood sector has always been associated with green natural and sustainable production but we cannot take this association for granted. At a time when these qualities are increasingly demanded by both society and consumers, it is vital that we are more proactive in demonstrating our green credentials. We must prove that what we are doing is sustainable and then deliver our green message to the rest of the world in a co-ordinated and targeted fashion. That is why we are developing the Brand Ireland concept.

"Acting Smarter" is also a key feature of the approach to be adopted to future development. It should help to dispel the myth that building a smart economy involves concentrating on one or two of what are generally considered to be the high-tech industries. Modern agriculture is technically advanced and cutting edge technology is used to add value to the food we produce. We have invested heavily in research and facilities over the years so that now our farmers, fishermen and food companies are among the most technically advanced in the world.

This is an industry where we have real strength and real opportunities. This, more than any other reason, is why we must support its growth and development. The challenge is to build on this existing knowledge and capability so that our industry remains at the forefront of our international competitors. Acting smarter also means rethinking our business relationships, targeting new customers, increasing skill levels and being innovative along every part of the supply chain, from farm to fork.

We must also improve our competitiveness. The report deserves to be carefully studied by everyone in the agrifood sector as a plan in which everyone in the sector has a role to play. The report identifies how existing resources, both public and private, can be better utilised. In this regard, we all will need to play a part. Government alone cannot deliver on this vision.

For the Government's part, I have established a very focused high-level group to ensure effective, joined-up implementation, including consideration and prioritisation of how best to pursue to recommendations made. This group will also act as a clearing house for the wide range of issues that arise in regard to the development of the sector, as recommended in the report.

As Minister for Agriculture, Fisheries and Food, I am committed to leading and driving the implementation of this report by bringing together all of the relevant arms of the State in pursuit of the one goal. I will also fully involve sectoral representative bodies and other external expertise as required. Our approach to implementation will be flexible. I am open to new ways of interacting and doing business, which will achieve results. Importantly, the approach will also be transparent and accountable.

I am pleased to say that the budget introduced yesterday and the 2011 Estimate for my Department recognise the contribution of the agrifood sector to the economy, especially the rural economy and society and represents a vote of confidence in the potential and ambition which is clearly set out in Food Harvest 2020. In summary, the main elements of the budget for my Department are that there will be no change in payment level for the main agricultural schemes, the agri-environment options scheme will re-open in 2011, farm waste management scheme payments will be brought forward to this month, and total Department expenditure in 2011 will be €1.644 billion, which, when added to EU-funded expenditure, will mean expenditure by the Department in support of the agriculture, food, fisheries and forestry sectors of almost €3 billion next year.

The Minister for Finance set out the current harsh reality of our economic circumstances and the difficulties in the public finances and my Department, like all others, has had to adjust to cuts in the resources available. The Department's Vote for next year shows a net reduction of 11%. However, to a large extent, this is accounted for by a reduction in payments under the farm waste management scheme. I am pleased to report that spending on a range of areas, including the disadvantaged area scheme, agri-environment schemes, forestry and fisheries is being maintained at or very close to this year's levels.

Before I deal with a number of specific points, I want to comment briefly on the presentation of the Estimate for my Department which appears for the first time in a new format. In addition to the traditional subhead-by-subhead presentation, the 2011 expenditure is also shown across the Department's four strategic programme areas into which the various subheads are grouped. My Department is the first line Department to present its Estimate in this format. However, I expect that this form of presentation will become the norm in future. On this occasion, the traditional presentation is also included in the Estimate for comparison purposes.

I am particularly pleased that the Government and the Minister for Finance have provided the resources to maintain a number of important schemes and the disadvantaged areas schemes in particular at existing levels in 2011. These payments, which have been issuing from the Department in recent weeks for this year, make a very significant and increasingly important contribution to family farm incomes in the less-favoured areas.

On the important point of payments to farmers, I remind the House that every effort continues to be made to clear all payments due under the single payments scheme, which is EU-funded and does not appear in the Department's Estimate. Despite a substantial review of eligible areas, by year end, total payments will be well in excess of €1.1 billion, and I am remain committed to expediting all outstanding payments as quickly as possible.

We have also provided for an increase next year in agri-environmental schemes from €330 million to €337 million. REPS payments will continue at current rates and funding is provided in 2011 for those participants who joined the new agri-environment options scheme last May. This is a more targeted scheme than REPS and has proven very attractive to farmers, especially those who are out of contract under REPS. I am pleased that with the agreement of the Minister for Finance and within the financial ceilings set out in of the National Recovery Plan 2011-2014, I intend to re-open the agri-environment options scheme next year. As indicated when the scheme was launched in 2010, I intend to review the experience of the 2010 scheme before the launch again in the early part of 2011. Participation levels will be capped at 10,000 and maximum payment levels will be capped at €5,000. This level of participation is roughly equivalent to the number of REPS participants who are currently out of contract or whose contracts will have concluded by 15 May next, the date by which applications must normally be submitted for participation in any agri-environment schemes. This level of participation is similar to that which applied this year.

Funding of €119.8 million is being provided for forestry and bio-energy expenditure. While this represents a small reduction over this year's level, I am satisfied that this level of funding will allow new planting well in excess of 7,000 hectares in 2011, and is evidence of the Government's commitment to afforestation.

The fishing sector makes a critically important contribution to the economies of coastal communities and expenditure on fisheries at €19.3 million is essentially being maintained at this year's levels. Funding for food processing and aquaculture development is being maintained and while there is a small reduction in the capital allocation for fishery harbours, the funding will continue to make a valuable contribution to essential infrastructure provision. Funding will be provided through Enterprise Ireland, with the assistance of the Minister, Deputy Batt O'Keeffe, to many agrifood enterprises during the course of 2011. I recognise the huge success for the diary industry of the announcement by Danone last Saturday of a €50 million investment. I pay tribute to my colleague, the Minister for Enterprise, Trade and Innovation, Deputy Batt O'Keeffe, my Department officials and officials in the Enterprise Ireland who worked tirelessly along with myself to ensure that investment came to County Cork.

The Estimate also provides substantial funding for investment in the future by way of capital investment on farms and in the food processing industry. The Minister for Finance has agreed that savings which are available in our Department's Vote this year of up to €100 million can be brought forward into the current year to pay the final instalment of the farm waste management scheme, which was due to be paid early next year. By the time the final instalment is paid in full, well over €1.1 billion will have been paid under this scheme, all of which is Exchequer-funded. Apart from being a most welcome development for the farmers concerned, this greatly reduces the burden on the Estimate for 2011 for our Department.

The capital budget includes provisions of €19 million for the targeted agricultural measures, which are focused on supporting productive investment. The schemes include a new scheme for dairy farmers to adjust to expanding dairy opportunities, aid for sheep fencing and handling facilities and animal welfare grants for pig and poultry producers in the area of enhanced housing facilities. These schemes have been launched and will encourage and assist farmers and producers who are interested in developing their enterprises. A total of €35 million is again provided for marketing and processing grants to meet commitments made under the beef, sheep and dairy rationalisation programme. This is an ongoing commitment to the development of the food industry, which is fully in keeping with the aims and ambitions of Food Harvest 2020.

I am also pleased to announce that the provision for horticulture is being maintained at this year's level.

An essential contributor to our future prospects, which was highlighted in Food Harvest 2020, is research and development and I am glad that expenditure in this important area is also being maintained at this year's levels.

The 2011 Estimate also provides for bringing forward €32 million for the suckler cow welfare scheme into 2011 to ensure that the Department can make the 2010 and 2011 payments during the course of 2011. The practice has been to pay a year in arrears and the arrangement for 2011 is evidence of the Government's commitment to the beef sector and will be a timely boost to those farmers who are determined to improve animal welfare and quality.

The State bodies make a major contribution to the development of the agrifood sector and, in aggregate terms, the funding which is to provided in 2011 has been increased. However, I want to emphasise that this is not to say that the agencies under the aegis of the Department, namely, Teagasc, Bord Bia, the Marine Institute, Bord Iascaigh Mhara and the Sea Fisheries Protection Authority, will be exempt from cutbacks. All of the agencies will be obliged to reduce current expenditure and seek administrative savings and efficiencies. However, the Government has also had to provide for pension costs which must be met and, in the case of Teagasc in particular, this is an important issue. There will be a 3.3% reduction in the allocation in 2011- down from €59.3 million to €57.3 million for Teagasc.

Responsibility for the Horse and Greyhound Racing Fund transferred to the Department in May 2010 and funding of €57.29 million will be provided in 2011. This reflects the importance of the horseracing and bloodstock sectors, particularly in the provision and support of 16,000 jobs, many in parts of rural Ireland where alternative employment opportunities are limited. The Minister for Finance announced yesterday the Government's intention to include provisions in the finance Bill and to revise the Betting Act 1931 to apply betting duty to offshore betting, which will benefit the industry in our own country.

Substantial savings have been made in the Department's administrative budget and payroll costs in recent years and further significant savings are forecast over the period of the Government's national recovery programme from 2011 to 2014. The departmental staffing level will fall by approximately 240 this year and this rate of reduction is set to continue next year. I am determined to manage the business of the Department as effectively and as efficiently as possible and to ensure effective service delivery with ongoing reductions and staff resources.

I take this opportunity to pay tribute to officials in my Department working throughout the country. With reduced personnel they are still delivering services to the farming community and food sector in an exemplary fashion. We are to the forefront in having payments made in the most efficient manner throughout the entire European Union.

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