Simon Coveney (Cork South Central, Fine Gael)

I propose to take Question Nos. 23 and 24 together.

I congratulate Deputy Moynihan, Deputy Colreavy and Deputy Pringle on being made spokespersons on agriculture and fisheries for their parties or groups in the House. I look forward to a constructive relationship with them. We have many challenges in the next two years in respect of budgetary constraints, but agriculture and fisheries can be a good news story for the economy. I hope the Deputies find me straight, blunt and open to sharing information. I hope they will be able to work in the same spirit with me.

On Wednesday, 6 April, I announced the re-opening of the agri-environment options scheme, or AEOS, for 2011 and confirmed that the scheme will be open for applications until 16 May. I have made funding of €25 million per annum available for this scheme, with a maximum payment to any farmer of €4,000 per annum. I decided on this level of funding following long and careful consideration, and taking account of the expenditure ceilings for my Department, as set out in the National Recovery Plan 2011-2014. The number of applicants that will be accepted into AEOS for 2011 will be determined by the overall expenditure ceiling of €25 million per annum. The actual number accepted will depend on the aggregate of the payments due under the individual plans submitted. Applications will be accepted based on the priority access criteria and scoring matrix set out in the scheme terms and conditions, up to the expenditure ceiling of €25 million.

While I would like to have been in a position to announce this scheme earlier, the reality of putting it together was made all the more challenging due to the budgetary constraints in place. My Department must operate within the limits of the national recovery plan and funding was not provided for the launch of AEOS in 2011 when the plan was published. That is simply a fact. While difficult choices had to be made, I felt the commitment given to open the scheme in 2011 should be honoured. Given the overall constraints, it was not possible for me to commit €50 million a year to the scheme. The funding of €25 million per annum which I have announced must be found within the overall expenditure ceilings for the Department in the national recovery plan, and I will critically examine every element of the Department's expenditure to ensure that all available funding is maximised.

Prior to finalising the 2011 eligibility criteria and scheme terms and conditions, my officials carried out a review of the 2010 scheme to gain from the experience of operating that scheme. On the basis of this review I have put in place a scheme under which farmers will to be paid to undertake actions which specifically target the three objectives of halting the loss of biodiversity, contributing to the improvement of water quality and combating climate change.

While the 2011 scheme is broadly similar to last year's scheme, some minor changes have been introduced that are designed to enhance the benefits to both participating farmers and the environment. Farmers successful in gaining entry to this year's scheme will be paid to undertake identifiable and verifiable environmental measures under a scheme which builds on the success of the rural environment protection scheme and the inaugural agri-environment options scheme. The scheme will be attractive to farmers while delivering real, worthwhile environmental benefits to the wider community.

The contract period for the new scheme will be for five years, but the terms and conditions and payment rates for the new participants will apply until the end of 2013. At that stage, participants will have the option of terminating the contract without penalty or of opting to join whatever scheme may be introduced in the new EU financial perspective programming period. This is a sensible change which was introduced by the Commission to avoid overlap between EU programming periods.

Additional information not given on the floor of the House.

As with last year, farmers with commonage land or designated special areas of conservation or special protection areas will have to follow a "sustainable management plan" prepared by a planner and will be given priority access to the scheme. Applicants other than those requiring a sustainable management plan are not required to engage a planner to complete their application form. Such applicants will be awarded entry to the scheme on the following basis. Farm partnerships will rank second in priority in the selection process. Applications for all other holdings will then be considered and will be ranked initially according to the marking system shown set out in the terms and conditions which is based on the environmental actions selected by the individual farmer. Further selection will be applied, if necessary, using the following criteria: location of farms in less favoured areas; previous participation in REPS; and farm size, favouring smaller holdings, based on the utilisable agricultural area declared in the 2010 single payment scheme application.

The payments set out in the scheme terms and conditions do not allow for additional payments for farmers in disadvantaged areas for two reasons. First, to do so would result in fewer farmers gaining entry to AEOS. Second, such farmers already receive an income support to compensate them for the additional costs associated with farming in such areas under the disadvantaged areas scheme administered by my Department. Due to the budgetary constraints that I have outlined, I will not propose any increase in the payments under the disadvantaged areas scheme.

The purpose of AEOS is to compensate farmers for income forgone or costs incurred for complying voluntarily with specific agri-environmental measures. That it will be attractive to farmers and will provide a welcome income stream for the successful applicants. It is also a clear indication of my and the Government's commitment to sustainability and the development of the agri-food sector, even in very difficult economic and fiscal circumstances.

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