Fergus O'Dowd (Louth, Fine Gael)

The rural development programme 2007-13 is divided into four axes. Axis 1 deals with the competitiveness of the agriculture sector; Axis 2 aims to improve the countryside and the environment, while the objectives of Axis 3 are to support the diversification of the rural economy and improve quality of life in rural areas. Axis 4, or the Leader axis, 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 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 Annex 1 to the EC treaty and commonly called Annex 1 products. Under the main Rural Development Regulation 1698/2005 support-grant aid for adding value to Annex 1 products is facilitated under Axis 1 of the programme. At the start of 2011 Ireland was notified by the European Commission that support-grant aid for adding value to agrifood products was not eligible under Axis 3 but rather under Axis 1 as detailed in the regulation. As a result of this, grant aid under Axis 3 of the RDP for this activity is suspended.

A significant part of enterprise activity in rural areas focuses on food and food-related businesses. The continued provision of support for these businesses is critical as we look to ways to generate employment in rural Ireland. The Department of the Environment, Community and Local Government is aware of the seriousness of this issue and has been working with the Department of Agriculture, Food and the Marine on an ongoing basis since the issue was identified in order to reach a solution.

It should be noted that although there are many agrifood products that Axis 3 of the RDP has been unable to support since the issue was notified in early 2011, the Leader programme can and does continue to offer substantial support to certain food processing enterprises in rural areas. Examples of activities which are being funded and will continue to be funded include the production of chocolate, ice cream and bakery products. Support is also provided for farm shops and farmers markets.

I am not in a position to make an announcement on additional funds for the projects referred to at this time, but I reassure the Deputy of the ongoing efforts to achieve a solution which I hope will be found in the near future.

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