James Breen (Clare, Independent)
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Question 44: To ask the Minister for Agriculture and Food if, in view of the fact that 102,000 farmers are receiving disadvantage payments, no change will take place and the [i]status quo[/i] will apply; if she will defend all areas designated; if funding for disadvantaged areas will be increased in line with inflation; if pockets of areas which meet natural handicap criteria but were excluded due to not being adjacent to existing areas will now be included under natural handicap criteria; and if she will make a statement on the matter. [14245/05]

Mary Coughlan (Donegal South West, Fianna Fail)
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The EU Commission's proposal for the post-2006 rural development framework provides for the reclassification of disadvantaged areas. It responds to the European Court of Auditors criticism, endorsed by the European Parliament, concerning the system. The suggested new methodology will be based on natural conditions, notably soil and climatic factors. The socio-economic criteria, taken into account to designate eligible areas, will no longer apply.

At meetings of the Council of Ministers, I have stressed that reclassification is an extremely important and sensitive issue. Other member states have adopted a similar position. I will continue to seek a solution that is equitable and in Ireland's interests. I cannot yet be definite regarding the shape of that solution, since negotiations are still in progress. However, the negotiations to date give me grounds for cautious optimism. Regarding the issue of funding, that too is covered by the EU Commission proposal for the post-2006 rural development framework. Negotiations on that have not yet begun in earnest but I assure the Deputy I will be seeking a solution which is fair and in the best interests of our disadvantaged areas.

James Breen (Clare, Independent)
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Since the Minister hails from Donegal, where there are small farmers such as in County Clare, I do not need to tell her of the hardship which will befall them if the disadvantaged area is declassified. It will reduce their incomes considerably. The introduction of the nitrates directive will further reduce their incomes and stocking rates, while the beef premium overshoot of €18 million will also cause hardship for farmers. I ask the Minister to do her best to ensure there is no reclassification of disadvantaged areas in this country.

Can the Minister veto the declassification? Over what timescale does the Minister expect it to take place? If the current situation is maintained, will the Minister guarantee index linking, so payments will rise with the rate of inflation? This is important for farmers. The Minister and the two Ministers of State in the Department are aware that we cannot afford to allow declassification to take place.

The Minister is fighting to maintain live exports of cattle. If they are not maintained, small farmers will be put out of business. The Minister sees the importance of this. I remind Deputy Naughten that I am the biggest small farmer in County Clare, by size only.

Mary Coughlan (Donegal South West, Fianna Fail)
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I agree with the Deputy that this is an important area. I expected Deputy Crawford to jump up and thank the Minister and the Minister of State for including Monaghan.

Denis Naughten (Longford-Roscommon, Fine Gael)
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I was telling him to keep quiet.

Mary Coughlan (Donegal South West, Fianna Fail)
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It is terrible to be successful on occasion on this side of the House. I know the Ceann Comhairle is above politics but he would welcome that.

Deputy Breen is correct. A considerable portion of his constituency in County Clare lies in a disadvantaged area. This is a politically sensitive issue. We are currently in quite difficult negotiations on the issue. A number of my colleagues will suffer huge losses as a consequence of the re-evaluation taking place, and as the Deputy will appreciate, that is politically unacceptable to them. We are back into the melting pot. The Deputy is correct in saying that any degressivity of removal of the disadvantaged payments will have major implications. All of this depends on the financial perspectives which are to be negotiated and finalised in June. We expect this matter to be concluded by the end of June, during the negotiations at the Council of Ministers.

I agree that the issue is of major importance, and we will make every effort to ensure the outcome will not be disadvantageous to Irish farmers.