Paudge Connolly (Cavan-Monaghan, Independent)
Link to this: Individually | In context

Question 116: To ask the Minister for Agriculture and Food the rationale behind her recently stated intention to abolish the early retirement scheme after 11 years; and if she will make a statement on the matter. [26539/05]

Mary Coughlan (Donegal South West, Fianna Fail)
Link to this: Individually | In context

I have not taken a decision on the future of the early retirement scheme. The EU Council regulation covering the current scheme will expire in December 2006. The Council regulation on rural development for the period 2007 to 2013 again includes provision for member states to operate early retirement measures. No decisions have yet been taken regarding the schemes to be operated in Ireland under this regulation.

The early retirement scheme was introduced as one of a number of instruments to improve the age structure of Irish farming and improve the viability of farm holdings. From this point of view, the first scheme from 1994 to 1999 was successful. However, take-up has fallen short of expectations, and an expenditure review carried out in my Department in 2004 raised a number of questions about the effectiveness of the scheme in achieving its objectives. Structural reform is still a priority both at home and at European level, and we still need to provide opportunities for young farmers. In framing proposals for the next rural development round we need to consider how best to achieve those results in light of the funding and the options that are available.

Paudge Connolly (Cavan-Monaghan, Independent)
Link to this: Individually | In context

I thank the Minister for her reply. I note she said that she has not yet taken a decision on the future of the scheme. I also note she was quoted as saying she was putting forward the idea that the scheme had run its course and that she would listen to what people have to say about this. I hope that was not a case of her stirring the pot and that she will listen to what farmers have to say about this scheme.

The message I have got from farmers is that scheme was innovative when introduced and that it was a good scheme. Over the 11 years it hasbeen in place, approximately 12,000 farmers availed of it. In 2001, 836 people applied for the scheme but the number who applied for it in 2004 decreased to 321. The main question is why was that the case and we must get to the bottom of that.

We need a root and branch review, rather than a scrapping, of the early retirement scheme, including increasing the income limit which is set at €25,500. That income limit was fair when the scheme was introduced 11 years ago but in today's terms a farmer would not gain any of the benefits applying in this area by participating in this scheme as one of the transferees. Such a farmer would lose stamp duty benefits etc. I ask that this aspect be reviewed.

We must respect the right of a farmer to decide when he or she wants to retire. We must also respect the Lisbon competitiveness agreement. These are elements we cannot ignore. We must balance those with having in place a fair early retirement scheme which will provide retired farmers with an income on which they can live. I am sure the Minister would agree it is not correct not to index link pensions. An income of €13,500 was probably in order 11 years ago but one need only reflect on a farmer retiring on a salary of €13,500 and what that income would buy in five or six years' time. That aspect must be examined.

There are key barriers to farmers taking up this scheme, including that the pension is not index-linked and the need to increase the income limits. We must also encourage young people to participate in farming — 12% of farmers are under the age of 35 and that is not a good basis for going forward.

Mary Coughlan (Donegal South West, Fianna Fail)
Link to this: Individually | In context

The Deputy has nearly answered the argument he put forward. That is the reason I put out this idea, although I would not say I am stirring the pot.

Denis Naughten (Longford-Roscommon, Fine Gael)
Link to this: Individually | In context

The Minister is definitely stirring the pot.

Mary Coughlan (Donegal South West, Fianna Fail)
Link to this: Individually | In context

Foresight is 20/20. Therefore, we must evaluate the scheme. I agree that its usefulness when introduced was tremendous. However, the decrease from 10,000 to 2,599 farmers to date participating in the scheme represents a major gap. It poses the question why are farmers not interested in participating in the scheme. There are a number of reasons, including that the pension is not index-linked. That feature is part of the scheme. Furthermore, the fact that the Government has introduced a good social welfare pension — I had to get my spoke in there — means that the scheme is not as attractive as it was initially for farmers.

I want to introduce a proper balance between two elements. I want to encourage young people to go into farming. Is the early retirement scheme the best mechanism for achieving that? Is there a better mechanism we need to introduce to support young farmers? I have put forward that idea and I welcome hearing what farmers have to say on it. Given that there is also the notion that we should not encourage people to retire at 55 years of age, but encourage them to remain in work until they reach the age of 65, and that we want to achieve a balance between younger and older people engaged in farming, is there an alternative view to the current scheme? Many people aged 55 still have major responsibilities at home, including providing for children at college, and they cannot afford to retire. Therefore, we need to strike a balance. I am not proposing a scrapping of the scheme but perhaps aspects of it need to be modified and other aspects should be maintained, and new initiatives should be considered. I have put forward this idea to establish what people have to say about it and whether the current scheme is the right way forward.

This is a small scheme and some people are disgruntled about it because it is not index-linked. My two colleagues opposite are smiling as if this aspect of this scheme will make me uncomfortable but it will not. The bottom line is that this is not an index-linked scheme, nor are many other schemes introduced between the European Union and ourselves. If people have novel ideas or consider that the scheme could be improved, now, rather than later, is the time to review it.

Paudge Connolly (Cavan-Monaghan, Independent)
Link to this: Individually | In context

I take it from what the Minister said that she will examine revamping the scheme. The fact that it has not been revamped is the reason farmers are not taking up the scheme. It is important for agriculture in the next five to ten years that we review this scheme. It provides a method of encouraging young farmers to remain in farming.