Michael Creed (Cork North West, Fine Gael)
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Question 46: To ask the Minister for Agriculture, Fisheries and Food if she will make a statement on the future of the farm improvement grant scheme; the number of applications received to date; and if her Department will hand back funding to the Exchequer in 2007. [26974/07]

Mary Coughlan (Donegal South West, Fianna Fail)
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The farm improvement scheme was launched by my Department in July 2007 and funding for the scheme was agreed under the partnership agreement, Towards 2016, as part of an overall programme of investment in the agri-food sector. A total of €350 million was provided for farm waste and other on-farm investment measures, of which €79 million was provided for investments in farm improvements. I had indicated, at the time of the launch of the scheme, that the scheme would be terminated when this financial ceiling had been reached. Accordingly, I announced last week that, as applications under the farm scheme had reached this level of funding, it would close to new applications for now. Funding for the scheme is provided as part of the overall package of measures amounting to €8.6 billion of funding for the agri-food sector which was agreed under the partnership agreement and is set out in the National Development Plan 2007-2013.

The scheme has proved to be extremely popular to farmers, as evidenced by the number of applications received, particularly in the last few weeks. More than 12,600 applications were received up to the closing date of the scheme and my Department will process these applications up to the level of funding available. This is in addition to 48,000 applications received under the farm waste management scheme. Payment of grant aid will issue in respect of all approved projects in due course when the work involved has been completed.

My Department is committed to expenditure substantially in excess of the €350 million provided for on-farm investment as a result of the large number of approvals under the farm waste management scheme. While there will not be an underspend in respect of my Department's on-farm investment schemes in 2007, I expect savings will arise on other demand or market-led schemes, expenditure on which is subject to a variety of external factors, including the pace of approval of state aids and rural development programmes at EU level, the completion of approved projects in the marketing and processing scheme within the year and a reduced reliance on intervention at EU level as a market management tool. Funding for the farm improvement scheme is provided under partnership, which provides for a review in 2008. In accordance with the terms of that agreement, the review will take stock of the outcomes achieved in the overall goals and will consider opportunities to refocus and reprioritise.

Michael Creed (Cork North West, Fine Gael)
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I am clutching at straws. The Minister stated the scheme was closed "for now". Is she holding out the prospect that the scheme may be reopened in 2008? Is she not embarrassed that a scheme launched less than six months ago had to be suspended last Friday? That reflects an appalling inability in her Department to predict the pent up demand for capital investment on farms. I acknowledge the investment provided under the farm waste management scheme but I refer the Minister to farm gates. Many farmers are in a scheme that was supposed to provide grant assistance under both the farm waste management and farm improvement schemes but, having gone through the regulatory and planning process, they find the door has been closed on them by the Department because it has run out of funding for the latter scheme. The Minister stated there will be an underspend in a number of schemes administered by her Department and she raised the possibility of a refund to the Exchequer this year. Is she aware of the comments of the Tánaiste and Minister for Finance in recent times regarding the downturn of the economy? He stated it is important in the context of competitiveness and efficiency to retain capital investment as an engine to drive the economy. The farming sector is a major employer. It plays on a world stage and needs to be efficient and competitive. Maintaining on-farm capital investment is as important as and comparable to maintaining investment in the national development plan and in Transport 21. Will the Minister consider informing the Minister for Finance that her Department has underspent in certain areas and ask whether this scheme may be reopened so that farmers may be allowed to get on with the works they had envisaged doing?

Mary Coughlan (Donegal South West, Fianna Fail)
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I am not embarrassed.

Michael Creed (Cork North West, Fine Gael)
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The Minister should be.

Mary Coughlan (Donegal South West, Fianna Fail)
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I should be more embarrassed if I had a €79 million scheme and nobody was interested in applying for it. That would be a greater embarrassment.

Michael Creed (Cork North West, Fine Gael)
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How could she have underestimated it by so much?

Mary Coughlan (Donegal South West, Fianna Fail)
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There are 48,000 applications under the farm waste management scheme. That is the largest capital investment in the sector in the history of the State and is very flaithiúlach in the context of encouraging people to address the issues of the nitrates directive. That has been and will remain the priority of the Department.

Seymour Crawford (Cavan-Monaghan, Fine Gael)
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That is nonsense.

Mary Coughlan (Donegal South West, Fianna Fail)
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I have overspent this year by €350 million, but on the basis of a very fine Minister for Finance, who appreciates my difficulties, I have been allowed to transfer some of my savings into that scheme because we have to address these issues. Deputy Crawford will appreciate there are many people in County Monaghan who have to be looked after.

Seymour Crawford (Cavan-Monaghan, Fine Gael)
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I am not one of them.

Mary Coughlan (Donegal South West, Fianna Fail)
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Since 2000 I have invested in 5,000 applications under the dairy hygiene scheme as well as almost 12,000 under the farm improvement scheme. Overall, there are almost 60,000 applications and people to be supported. Deputy Creed likes to remind me of my job so I shall remind him of what his crowd did in April 1995. I have 60,000 applications to deal with. His party in government had control of the farmyard pollution scheme, which closed at 17,000. That means there is an investment in respect of 60,000 on one side and 17,000 on the other. We need to look at the issues as they exist. We had a massive influx of applications to this scheme over five days.

Michael Creed (Cork North West, Fine Gael)
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The Minister should have seen the underinvestment.

Mary Coughlan (Donegal South West, Fianna Fail)
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It was part of the partnership agreement and, as I said, we shall be reviewing this and the priorities with all the farming organisations in 2008. I am reviewing all the applications on hand and those which have been sanctioned will be paid. We will then work towards payment of the rest when we see the different categories and know when people are going to invest etc. When all this has been done and an evaluation has taken place I may be able to reprioritise this scheme. The scheme has been massively expanded and covered a plethora of new ideas that presented. Until such time as I can evaluate what is on hand I cannot give commitments as to whether there will be any transfer of funds. However, it will be up for review in 2008 as per the partnership agreement.

Michael Creed (Cork North West, Fine Gael)
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I want to ask the Minster two brief supplementary questions and the possibility of an answer would be greatly appreciated. Specifically, as regards those now being denied grant aid under this scheme, will the Minister consider a derogation from their compliance obligations under the nitrates directive and REPS because very many of them had programmes in place and investment targeted to address shortcomings on their farms to enable them to comply with these regulations? Is the Minister aware of the assertion being made by social partners, and the farming organisations in particular, that this was a demand-led scheme for which there was no set budget? Will the issue be referred for adjudication to the machinery involved in resolving disputes under social partnership, whether the National Implementation Body or some such forum because farmers feel very aggrieved by this? There is a pent-up demand for capital investment on farms. The proof of this is that the scheme was so over-subscribed and nonetheless the Department could not programme a scheme of investment to last from 2007 to 2013. The fact that it collapsed within six months because of over-subscription smacks of desperate bad planning within the Department.

In view of that and the willingness of farmers to respond——

Séamus Kirk (Louth, Fianna Fail)
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Can the House hear the supplementary question, please?

Michael Creed (Cork North West, Fine Gael)
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I have asked a number of supplementaries, but I am not getting any answers.

Séamus Kirk (Louth, Fianna Fail)
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Perhaps the Deputy can avoid the long dissertation.

Mary Coughlan (Donegal South West, Fianna Fail)
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The answer is that when I negotiated the partnership agreement, we had a finite amount of resources, €350 million, of which €79 million was for the farm improvement scheme. The agreement provided that this was the amount to be spent until the money ran out. Moving on from the agreement there was to be a review in 2008 on the basis of ascertaining how these programmes were manifesting. If we needed to reprioritise we would do this within the budget as set down under the national development plan.

Seán Sherlock (Cork East, Labour)
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The Government is now discriminating against those people who got their applications in on time and who will now be cut off as a result of this action.

Michael Creed (Cork North West, Fine Gael)
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That is correct.

Mary Coughlan (Donegal South West, Fianna Fail)
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I am not ignoring the fact that a number of people have a natural expectation, perhaps next year or the year after, to do certain things. As matters stand I have to ascertain the timeframe as regards a number of applications on hand that might have been hopefully shoved in, but which might be unfair to people with a natural and genuine need. All that has to be ascertained.

On the issue of the nitrates directive——

Michael Creed (Cork North West, Fine Gael)
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And REPS.

Mary Coughlan (Donegal South West, Fianna Fail)
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——the farm waste management scheme is addressing that and I have allocated enormous resources and energy to this area.

Michael Creed (Cork North West, Fine Gael)
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It is not being dealt with exclusively.

Mary Coughlan (Donegal South West, Fianna Fail)
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It is. Anybody who has missed the big farm waste management scheme——

Michael Creed (Cork North West, Fine Gael)
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They would have works in hand which were a combination of both.

Mary Coughlan (Donegal South West, Fianna Fail)
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Yes, but the farm waste management scheme was moved ahead.