Michael Creed (Cork North West, Fine Gael) | Oireachtas source

I thank the Deputy for raising this matter. The areas of natural constraints, ANC, scheme was introduced under the 2014-2020 rural development programme as a replacement for the previous disadvantaged areas and less favoured areas schemes that had been in place since 1975. Payments under the ANC scheme are an important support for farmers across the country in addressing cash flow issues and contributing to the continued growth and development of the agrifood sector.

The scheme was originally introduced in 1975 in recognition of the fact that farmers in particular areas were faced with challenges relating to lower productivity and higher production costs than farmers in other areas where levels of disadvantage were not as pronounced. The significant level of financial support delivered through the scheme in the intervening years was provided in recognition of the fact that such issues posed a significant threat to the future viability of these farming communities. The specific objectives of the scheme are thus structured around themes such as ensuring continued agricultural land use, thereby contributing to the maintenance of a viable rural society; maintaining the countryside; and maintaining and promoting sustainable farming systems which take environmental protection into account. I am very aware of the importance of the scheme to the more than 95,000 farmers who receive the payment annually. With this in mind, I have prioritised efficient payment under the ANC scheme in my Department in recent years. In 2016, payments under the scheme began in mid-September and to date over €201 million has been paid to over 94,000 farmers. With the payment of €1.18 billion to some 124,000 farmers under the 2016 basic payment scheme, this is a very important financial support for the agrifood sector and farm families in rural Ireland.

Under the Common Agricultural Policy, CAP, finalised in 2013, the new rural development regulations introduced a change in how eligible areas under the ANC scheme were to be defined. The designation of eligible areas under the scheme to date has been based on a range of socio-economic factors. The factors included particular stocking levels, family farm income levels, population density and the percentage of the total working population engaged in agriculture. The change introduced in the new rural development regulations required from 2018 eligible areas to instead be designated using a set list of biophysical criteria. In cases where a member state does not introduce this system for payment, the regulations set out that the old scheme remains in place but payments must be phased out on a digressive basis. The purpose of the change is linked with a concern at European Union level that areas were not being designated as disadvantaged in a consistent manner across the various member states. The biophysical criteria set out in the legislation to underpin the new system of designation are low temperature, dryness, excess soil moisture, limited soil drainage, unfavourable texture and stoniness, shallow rooting depth, poor chemical properties and steep slope.

My Department has commenced work on the project and relevant technical experts are working on sourcing and analysing the data for the new criteria. Departmental officials have also been in contact with the joint research centre and the Directorate General for Agriculture, DG Agri, in the European Commission about technical issues arising. The ongoing analysis will identify areas deemed to be facing natural constraints which will, in parallel, be subject to a refinement process. A number of the criteria I have listed will not have an impact on the new designation in Ireland, while others will have a small impact. In effect, the Irish process will be most impacted on by soil drainage and soil moisture excess. As outlined previously, in the original rural development regulations, the new ANC designation was scheduled to be in place for the 2018 scheme year. This is the timeline towards which my Department has been working. However, as part of the ongoing discussion on amendments to regulations at EU level, Austria raised the possibility of extending the deadline on an optional basis. Ireland supported this proposal, with Latvia, Slovenia, Poland, Luxembourg, France, Germany and Slovakia. The proposal is passing through the relevant approval process at EU level, with a number of other regulatory changes in what is referred to as the omnibus proposal. The technical work is ongoing; thus it is not possible lo set out the final set of areas to be eligible for payment. However, given the importance of the ANC scheme in the Irish context, officials in my Department are continuing to engage with our colleagues at EU level in order to ensure the best possible outcome of the review is secured. I am also aware that many farmers will have a direct interest in the outcome of this process. Accordingly, I expect consultation to take place with key stakeholders as the process develops further.

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