Phil Hogan (Carlow-Kilkenny, Fine Gael)

The Rural Development Programme 2007-2013 is divided into 4 axes. Axis 1 deals with the competitiveness of the agricultural sector and axis 2 aims to improve the countryside and environment. The objectives of axis 3 are to support the diversification of the rural economy and improve the quality of life in rural areas. Axis 4 provides support for the use of a "bottom-up" approach to development which ensures local people are involved in decision making, thereby facilitating sustainable development in a more inclusive way. In Ireland the Leader approach is used to implement axis 3 measures.

A significant number of projects funded under the previous Leader+ programme, 2000-06, and under the diversification and business-creation measures of the current rural development programme, RDP, involve support for enterprise initiatives that add value to agrifood products. Basic agricultural products are listed in annexe 1 to the EC Treaty and are commonly called annexe 1 products. Under the main rural development regulation, support for adding value to annexe 1 products is facilitated under axis 1 of the programme. Early this year, Ireland was notified by the European Commission that support for adding value to agrifood products is only allowable under axis 1 and not under axis 3 of the RDP. As a result, grant aid under axis 3 of the RDP for this type of activity remains suspended.

Food and food-related businesses are a significant driver of enterprise activity in rural areas. These businesses require continued support as we look to ways to generate employment in rural Ireland. I and my Department continue to work with the Department of Agriculture, Fisheries and Food in pursuing a solution that meets the regulatory requirements. We are also maintaining ongoing contacts with the European Commission on the matter. While it is my objective to find an appropriate solution in the context of our overall budgetary situation, it is important to recognise that, overall, €62 million is available this year for the Leader elements of the RDP.

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