Jerry Cowley (Mayo, Independent)
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I am grateful for the opportunity to raise the plight of hill farmers in this Adjournment debate. Yesterday, I was at a meeting in Westport, which was attended by at least 500 farmers from Mayo, Connemara and Sligo. They are annoyed about what they perceive as a threat to reduce REPS payments. It is unfair to expect hill farmers to take a 30% cut in incomes, as a result of the Fischler CAP reforms and the incompetence of the Department of Agriculture and Food in tackling this draconian land designation, which has left hill farmers hampered for more than six years.

Farmers in these areas could not change or improve their farming types to take account of the Fischler agreement, whereas farmers in other areas were able to increase their individual quotas in sheep, cattle, suckler cows, dairy or grain. These most vulnerable and disadvantaged people on the western seaboard have been hard done by, whereas farmers in other counties, including Kildare, could plant any crops they wished. The only option for farmers in hill areas was to farm in an environmentally friendly way through the rural environment protection scheme. Since they had no other choice, they cannot accept the measures currently being proposed by the Minister for Agriculture and Food.

Everyone agrees that REPS has been good for the environment but the current arrangements discriminate against designated areas when compared to non-designated areas. The aim is to maintain REPS payments in commonage and SAC areas, which amounts to discrimination. It is obvious that all farmers with commonage and SAC land on their area aid applications, who are forced to be either in REPS or the national compensation scheme, are under threat.

For example, a farmer with 40 hectares, all of which is either designated and/or commonage, will see his or her payment reduced from €9,680 to €6,040 — a reduction of 40%. Who could tolerate a cut like that? By comparison, the new REP scheme for non-designated areas increases payments by up to 30%, as well as allowing farmers to qualify for additional measures. Meanwhile, farmers in commonage and SACs are facing a reduction of up to 30% and are not eligible for extra measures. The latter group will have to farm under severe environmental restrictions and their stock numbers are limited by the commonage framework plan.

In County Mayo, the single farm payment value of the sheep stock is €0.9 million, while the estimated loss of REPS payments will be up to €7 million. For 2,500 farmers in County Mayo, the loss is estimated at €6.1 million. Everybody is demanding that this cut should be resisted and that REPS payments in commonage and SAC areas be addressed.

Thousands of farmers have already left the land and many more will do so in future. These are the people who need help, instead of which they are being badly affected by the proposals. The problem extends beyond the farming community to shopkeepers, publicans, pharmacists, doctors and others. Everyone is affected because it means that income is being taken away from the area. Those who were forced into REPS had no choice and are now being severely punished because of that. The net loss to County Mayo should not be tolerated because it will have a huge impact on rural life. It is a major blow and a threat to those involved. The money, upon which local businesses depend, is not even going into the State's coffers but back to Brussels.

I am sure the Minister of State would agree that farmers have been looking after the land well for generations. I hope he will address this matter urgently. Maximum pressure is required to resolve this issue and if it entails officials working this out, it should be done, no matter how long it takes. The people concerned want their entitlements, including a REPS increase which is badly needed. One no longer hears of young people taking up hill farming, so if such farming is to have a future it is time to address this situation urgently.

Noel Treacy (Galway East, Fianna Fail)
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The new single farm payment scheme, to be introduced with effect from 1 January 2005, will be based on the average amount paid to farmers under the livestock premia and arable aid schemes in respect of the reference period 2000-02, inclusive. Council Regulation 1782/2003 governing the single payment scheme provides that where a farmer was under agri-environmental commitments during the reference period — that is, where stock numbers were reduced because of environmental commitments — the member state, in this case Ireland, shall calculate the single payment on the basis of the amounts paid, during the period 1997-99. If one or more of those years were affected by agri-environmental commitments, the average can be calculated using only the year or years not affected by such commitments.

Commission Regulation 795/2004 provides that when single payment entitlements are being calculated for farmers affected by agri-environmental commitments during the reference period, care must be taken by the member state to avoid double compensation — that is, where a year or years, during which no stock reduction was in place, are taken for the purposes of calculation of the single payment, then the compensation element for stock reduction included as part of the agri-environmental scheme, must be reduced accordingly. The Commission regulation gives farmers the option of either getting the single payment based on a reference period when no stock reduction was in place, and getting a reduced agri-environmental payment, or getting the single payment based on the reference period 2000-02, and getting an agri-environmental payment which includes an element of compensation for de-stocking.

Agri-environmental commitments in Ireland took the form of REPS. Under a 1998 agreement with the European Commission, Ireland secured a generous rate of payment of up to €242 per hectare on commonage or target area lands. Included in this figure was an amount of €90 per hectare to compensate farmers who might have to reduce sheep numbers under framework plans to be drawn up for all commonages. Pending the drawing up of those framework plans, the Commission insisted that Ireland take action to address the real problem of overgrazing by sheep on commonage land in the six western counties of Donegal, Sligo, Leitrim, Mayo, Galway and Kerry.

In November 1998, all sheep farmers with commonage land in those counties were de-stocked by some 30%. In total, some 5,600 farmers in the counties concerned had commonage land, and some 2,577 of those farmers were already participating in REPS and were not, therefore, required to de-stock. The farmers who were not already participating in REPS, were given the option of joining REPS or a national scheme administered by what was then Dúchas and is now under the aegis of the Department of the Environment, Heritage and Local Government. Those who participated in the national scheme were given an annual payment per ewe de-stocked, which included the value of the ewe premium foregone.

By 2003, some 2,500 farmers in the six western counties were participating in the national scheme, including 527 farmers in County Mayo. Those 527 farmers were paid a total of €1.3 million under the national scheme in 2003. In addition, a total of 942 farmers, 296 of whom were in County Mayo, left the national scheme during the period 1998-2003 and joined the REP scheme. The basis of the alleged loss of €6.1 million is not clear.

In the course of setting up the single payment scheme, the Department intends to use the average amount paid in the reference years 1997-98 for all farmers currently participating in the national compensation scheme. This means the farmers concerned will get the benefit of the ewe numbers they had prior to the de-stocking that took place at the end of 1998. This will have to be offset by a reduction in the level of compensation payable from 2005 onwards by the Department of the Environment, Heritage and Local Government. Therefore, the farmers concerned will not suffer any loss and it is important that this point is clearly understood by everybody.

For those farmers who are currently participating in REPS and who had reduced sheep numbers during the reference period 2000-02, it is intended to use that reference period in calculating the single payment. This means the single payment will be based on years when sheep numbers were reduced. However, the intention is that the farmers concerned, if they entered into REPS contracts before January 2005, will be entitled to keep the existing payment under measure A for the duration of those contracts. Individual farmers in this category will be able to apply to the Department of Agriculture and Food to exercise the option outlined earlier.

The question of sustaining the existing level of measure A payment on commonage for REPS contracts entered into after the introduction of the single payment scheme, from 1 January 2005, will be examined later in the year.

As regards confining the new REPS payment increases to the basic rate, it is important to make the point that this is fully in line with the arrangements agreed with the farming social partners in Sustaining Progress. In summary, this matter is being handled in a reasonable fashion at all levels.