Andrew Doyle (Wicklow, Fine Gael) | Oireachtas source

I thank the Deputy for raising this issue. I acknowledge his complimentary comments about the departmental officials in how they sought to ensure as many people as possible could be included under the new criteria.

The areas of natural constraint, ANC, scheme was introduced under the rural development programme 2014-20 as a replacement for the disadvantaged areas and less favoured areas schemes which had been in place since 1975. The scheme was originally introduced in recognition of the fact that farmers in particular areas were faced with challenges related to lower productivity and higher production costs compared with farmers in other areas. The ANC scheme is an important support for the 95,000 farmers across the country who receive the payment annually in addressing cash-flow issues. In recognition of its importance, the annual budget for the ANC scheme was increased by €23 million in 2018 and by €23 million in 2019, bringing the total annual budget for the scheme to €250 million.

The scheme is implemented around a tiered payment structure which recognises the different levels of constraint experienced on differing land types. Under the 2019 scheme, those farming on category 1 lands, previously called mountain-type land, will receive €148 per hectare for the first 12 forage hectares, with €112 on remaining hectares up to a maximum of 34 ha. Farmers with category 2 land, previously called more severely handicapped lowland, will be paid €111 on the first ten forage hectares and €104 on remaining hectares up to a maximum of 30 ha. Those with category 3 land, previously called less severely handicapped lowland, will be paid €93 on their first eight forage hectares and €88.25 on remaining hectares up to a maximum of 30 ha. These new rates represent an increase across all land categories, with the higher support being targeted at the greatest constraint.

The ANC scheme has had a long history of review and refinement since its introduction. From the first EU review of the scheme in 1976 through to the fifth review in 1996, Ireland has been successful in increasing the number of hectares eligible under the scheme, from just under 4 million ha to over 5 million ha, and incrementally increasing the level of funding available under the scheme.

Until 2018, under the Common Agricultural Policy, lands eligible under the ANC scheme were defined based on a range of socio-economic indicators such as family farm income, population density, percentage of working population engaged in agriculture and stocking density. This approach has now changed on foot of new EU regulations. From 2019, eligible areas under the ANC scheme must instead be designated using a set list of biophysical criteria. Under this change, where a member state has not introduced the new system for payment, the regulation sets out that the old scheme remains in place but payments must phase out on a digressive basis, which would result in significant cuts in payments. The purpose of this change in approach is linked with a concern at EU 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. The Department undertook the process of identifying eligible areas at townland level. Essentially, where the agricultural lands in a townland display one or more of the biophysical criteria listed and meet the 60% threshold set in the regulation, they are identified as constrained.

In parallel to this biophysical approach, two processes set out in the EU regulations were used to refine the identification of eligible land. First, a number of areas were identified as having "overcome the constraint" by reference to high levels of stocking density and arable land cover and are thus not eligible under the 2019 ANC scheme. This is referred to as "fine-tuning" in the EU regulations and was a mandatory step for all member states. Second, some areas were identified as eligible for the 2019 ANC scheme as they faced other specific constraints. In Ireland's case, this process identified townlands as eligible areas of specific environmental importance and townlands facing structural issues related to farm size, field size, farm fragmentation and the level of permanent pasture.

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