Tom Hayes (Tipperary South, Fine Gael)
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Question 71: To ask the Minister for Agriculture and Food her plans for the modulation fund; and if she will make a statement on the matter. [6776/05]

Mary Coughlan (Donegal South West, Fianna Fail)
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The modulated funds become available for use in 2006. I will decide on their use and seek the necessary EU approval in the coming months. My Department is finalising its examination of the relevant options. As part of that examination there has been a widespread public consultation and discussions with stakeholders. The use of modulated funds in 2006 is limited to certain measures. The eligible measures are contained in the Common Agricultural Policy rural development plan, including agri-environment, early retirement, compensatory allowances and forestry, and the new initiatives introduced as part of the CAP mid-term review are food quality, animal welfare, farm advisory services and meeting standards. My decision on the use of the funds will be informed by the terms and conditions of those measures.

Denis Naughten (Longford-Roscommon, Fine Gael)
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Will the Minister comment on last week's rumour that these funds will come under the disadvantaged areas scheme for the current year? If not, are there plans to include the funds under the scheme at a future date if Ireland is still entitled to them following the Minister's negotiations in June?

Does the Minister plan to focus on issues such as food quality, animal health and meeting standards, which are critically important for the agricultural sector, or will the Minister for Community, Rural and Gaeltacht Affairs get his hands on the modulated funds?

Mary Coughlan (Donegal South West, Fianna Fail)
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I am delighted that the discussion with the IFA made the front page of the Irish Farmers' Journal. Perhaps if that discussion had been on the record, the story would not have been published.

There has been significant consultation and I received more than 60 submissions. One of the difficulties is the funds are available only for one year, 2006, before they become part of the rural development programme. The modulated funds amount to €18.3 million this year and will increase to €33 million next year. A number of initiatives relating to food quality, husbandry, calf rearing and sheep have been undertaken. However, the problem is the animal health issue is so broad that it may be difficult to tie down what we want.

Options are available, the easiest of which is to provide a top up. I have not decided whether to do that and then re-evaluate the position under the rural development regime, but a number of good initiatives have been proposed. Discussions are taking place with the farming organisations. I met them and my officials are following up while the internal working group is considering the proposals. It is a small sum but I would like it to be used in the most efficient way. The decision must be made by April or May and the modulated funds will not be accessible by the Minister for Community, Rural and Gaeltacht Affairs. The access decision on rural development has not been made and further discussion at the Agriculture Council is required. I hope a decision will be made in June but it may take time on the basis of the tour de table that took place last Monday.