Michael Creed (Cork North West, Fine Gael)
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Question 68: To ask the Minister for Agriculture, Fisheries and Food when she plans to deliver the €34 million package committed to the development of the sheep sector; and if she will make a statement on the matter. [13251/08]

Mary Coughlan (Donegal South West, Fianna Fail)
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The series of measures I announced last May in support of the sheep sector constituted my response to the report of the sheep strategy development group, known as the Malone report. Together, the measures form a comprehensive package that recognises the importance of the sheep sector and addresses the challenges and opportunities that lie ahead.

Good progress is being made in implementing the various measures and I am pleased for this opportunity to set out the main points. Under REPS, my Department secured European Commission approval for a new supplementary measure in REPS 4 promoting mixed grazing of cattle and sheep. Under this supplementary measure a farmer can qualify for an annual payment of up to €1,000 in addition to his or her basic REPS payment

Payments of an additional €6 million to qualifying sheep farmers are currently being issued under the 2007 national reserve and all payments are due to issue by the end of May. Progress is being made by my Department in discussions with ICBF, Teagasc, breed societies and farm bodies on the proposal for ICBF to take over the management of a sheep breed improvement programme for the sheep sector. It is hoped to have an interim structure in place for the 2008-09 breeding year.

A capital scheme has been made available for the beef and sheep processing sectors. Trials are currently under way on the use of new technology to allow for the mechanical grading of carcases in the sheepmeat sector. The lamb quality assurance scheme, which was established in 2007, has seen almost 6,000 farms being registered to date with over 4,200 farm audits having been carried out. I have made €400,000 available to support inspections under the scheme.

Bord Bia will continue to organise strategic marketing campaigns in selected European markets. Along with its French and British counterparts, Bord Bia is undertaking a three-year generic lamb promotion on the very important French market to promote lamb to younger consumers. Teagasc has developed a comprehensive plan to restructure sheep support services, including a programme for technology evaluation and transfer farms, which includes hill and lowland areas.

These measures complement those to be taken by the industry itself in implementation of the Malone report. I am confident these form the right approach and will help to address potential difficulties. I remain very much conscious of the concerns within the sector and I raised these at the EU Council of Agriculture Ministers meeting on 17 March. Definitive conclusions on possible support action were not reached but my concerns were shared by a large number of colleagues and it was generally recognised that the needs of the sector should be borne in mind in the "health check" of the Common Agriculture Policy.

Michael Creed (Cork North West, Fine Gael)
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I thank the Minister for her reply. I note the date of the announcement of the package was May of last year, the run-in to a general election. Regrettably, there has been very little progress on it to date.

The Minister may need to be reminded of the signs of crisis in the industry at a practical level. This Easter, consumers could not source an Easter lamb. Sheep numbers have declined dramatically, as there has been a drop in the region of 2 million ewes in the past number of years. That is an industry in freefall. The European Commission recently contracted consultants to advise it on how to stabilise the position and reverse this trend. The consultants — Ernst & Young — were, I am sure, paid a great deal of money to arrive at a recommendation with which the House came up last October to the effect that there should be a return to a direct payment, perhaps €30, to farmers. There will be an opportunity for the Minister to deliver on this matter under the health check.

Why was the farm investment scheme suspended, particularly when €8 million in funding for sheep farmers was ring-fenced under it? At the stroke of a pen, the Minister removed this scheme. The idiocy behind all this is that on 18 October costings relating to the scheme were published on the Department's website, while on 20 October it was suspended. Will the Minister reintroduce the farm investment scheme in respect of sheep-handling and fencing grants — "Yes" or "No"?

Mary Coughlan (Donegal South West, Fianna Fail)
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"Yes" to what and "No" to what?

Michael Creed (Cork North West, Fine Gael)
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Will the Minister reintroduce the farm investment scheme?

Mary Coughlan (Donegal South West, Fianna Fail)
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The Deputy asked five questions so I will take the opportunity to reply to them.

Michael Creed (Cork North West, Fine Gael)
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The Minister will avoid answering them.

Mary Coughlan (Donegal South West, Fianna Fail)
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On the scarcity of lamb, and not to be overly facetious, the Deputy is well aware that Easter was celebrated early this year.

Michael Creed (Cork North West, Fine Gael)
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If that is the Minister's defence, it is damn poor.

Mary Coughlan (Donegal South West, Fianna Fail)
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The Deputy's hip is obviously still annoying him.

Seán Sherlock (Cork East, Labour)
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Perhaps we should consult the churches on this matter.

Trevor Sargent (Dublin North, Green Party)
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That is a separate question.

Seán Sherlock (Cork East, Labour)
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It is an ecumenical matter.

Mary Coughlan (Donegal South West, Fianna Fail)
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However, that will not happen for another 40 years and Deputy Creed and I will not be too concerned about it.

We are returning to the position prior to the ewe premium stage. The Deputy is correct. There has been a considerable reduction in the number of sheep in the country. It was on that basis we came together to consider the proposals we could implement and it was from there the Malone report emerged.

The Deputy is acutely aware that we are not in a position, in a decoupled area, to introduce direct payments. On the basis of an appreciation of the difficulties involved, however, we introduced a special scheme under both the national reserve and REPS 4. We are not in a position to witness the final outcome of REPS 4 as a result of difficulties experienced in clarifying the matter. Clarity now exists, however, and I await the outcome of the applications on 15 May.

Deputy Creed is correct. This issue can be dealt with under the health check. However, we will be obliged to proceed carefully.

Michael Creed (Cork North West, Fine Gael)
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We do not want to pay for it under modulation either.

Mary Coughlan (Donegal South West, Fianna Fail)
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That is exactly the issue. The Commissioner stated that we could consider modulation or that we could examine another formula under which money would be taken from one set of farmers in order to pay another set. The French do this but they have the option of transferring money from large cereal farmers into the sheep sector. I would be obliged to take money from beef producers and I am sure Members will agree that this would not be the correct formula.

Brendan Howlin (Wexford, Labour)
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I will take a brief final supplementary from Deputy Creed.

Mary Coughlan (Donegal South West, Fianna Fail)
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The Deputy is aware that we have serious concerns, with which he is in sympathy, regarding compulsory modulation. We are awaiting the outcome of a number of matters. We increased the REP scheme by 17%, which is considerable.

I am not stating it is particularly easy and we must consider a multifaceted approach. The bottom line is that the consumption of sheepmeat in Europe has decreased dramatically. The number of people under 45 years of age who consume sheepmeat has reduced to a huge degree. Even in countries where it is extremely popular, sheepmeat has become quite expensive, particularly in the context of the price farmers obtain for it.

Brendan Howlin (Wexford, Labour)
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I am obliged to call Question No. 69.

Mary Coughlan (Donegal South West, Fianna Fail)
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There are also consumer and price issues of which we must be cognisant. We will deal with all these issues.