Dáil debates

Wednesday, 11 February 2009

Priority Questions

Farm Waste Management.

1:00 pm

Photo of Michael CreedMichael Creed (Cork North West, Fine Gael)
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Question 68: To ask the Minister for Agriculture, Fisheries and Food the amount of money required by his Department to meet its full outstanding liabilities under the farm waste management scheme and the farm investment scheme respectively; the amount provided to each scheme in his Department's Estimates for 2009; if, in view of the financial hardship being experienced by individual farmers due to the failure of his Department to meet its contractual commitments, he will begin to process and pay outstanding liabilities in full; and if he will make a statement on the matter. [5284/09]

Photo of Brendan SmithBrendan Smith (Cavan-Monaghan, Fianna Fail)
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The farm waste management scheme was introduced by my Department in March 2006 in order to assist farmers meet the additional requirements of the nitrates directive. The farm improvement scheme was introduced in July 2007 under the aegis of the 2007-13 rural development programme. The deadline for completion of work and the submission of claims for grant payment under the farm waste management scheme expired on 31 December 2008, although applicants were permitted to submit certain supporting documentation up to 9 January 2009.

Almost 17,400 claims remain to be processed to payment stage under the farm waste management scheme in 2009 and, in view of the exceptional number of payment claims received, my Department is undertaking a review of the situation which includes an assessment of the overall cost of these claims. I have already confirmed on a number of previous occasions that farmers will receive payment in respect of all works which have been completed prior to the deadline in accordance with my Department's technical specifications.

Last week, the Government took a number of decisions on the overall expenditure control and economic strategy that included the funding for the farm waste management scheme and arrangements for payment of grant aid on a phased basis. My Department is in discussion with the Department of Finance on the implications for the Department's Vote and the details that will be published in the Revised Estimates Volume next month.

Significant funding has been made available under the farm waste management scheme since its introduction in 2006, with over €527 million spent over the last two years alone. In addition, almost €13 million has been made available under the farm improvement scheme over the same period and claims are being processed and payments made as normal by my Department under the latter scheme.

Photo of Michael CreedMichael Creed (Cork North West, Fine Gael)
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I am not sure whether we are supposed to jump up and down and clap when we hear the Minister say he will pay. The big question for farmers is when they will be paid. Is the Minister aware that for every month he delays payment — I will not make reference to the charter of rights which speaks about payment within eight weeks — interest payments made by farmers to banks come to approximately €3 million? That sum comes directly from farmers' pockets.

I presume that before the Minister came into the House he was talking about recapitalising the banks. Possibly after he leaves here he will continue to do so as he will return to a Cabinet meeting. That policy should inform every Department and the way in which they approach such issues. Paying the farmers their farm waste management scheme grants would, in effect, recapitalise the banks. The farmers will take the grant with one hand and hand it with the other to the bank managers to whom they owe money. My questions for the Minister are simple. When will they be paid? Will he bring in a Supplementary Estimate to provide for payment?

Photo of Brendan SmithBrendan Smith (Cavan-Monaghan, Fianna Fail)
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I said earlier that the payments would be made on a phased basis. The Government is not in a position to make full payment this year. What has been decided is to have payments made on a phased and proportionate basis.

Photo of Seymour CrawfordSeymour Crawford (Cavan-Monaghan, Fine Gael)
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That is outrageous.

Photo of Brendan SmithBrendan Smith (Cavan-Monaghan, Fianna Fail)
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To date, €548.7 million has been paid out from the Exchequer on this scheme.

Photo of Seymour CrawfordSeymour Crawford (Cavan-Monaghan, Fine Gael)
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That is of no benefit to farmers who want grants.

Photo of Brendan SmithBrendan Smith (Cavan-Monaghan, Fianna Fail)
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I will deal with the schemes that were there when Fine Gael was in government.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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Allow the Minister to answer the question.

Photo of Brendan SmithBrendan Smith (Cavan-Monaghan, Fianna Fail)
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More than——

Photo of Paul KehoePaul Kehoe (Wexford, Fine Gael)
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Promises were made.

Photo of Brendan SmithBrendan Smith (Cavan-Monaghan, Fianna Fail)
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Promises made will be honoured, as they always are.

Photo of Paul KehoePaul Kehoe (Wexford, Fine Gael)
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Honour the farmers who should have been paid.

Photo of Brendan SmithBrendan Smith (Cavan-Monaghan, Fianna Fail)
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The Deputy's predecessors——

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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Please, Deputy Kehoe. This is a priority question.

Photo of Brendan SmithBrendan Smith (Cavan-Monaghan, Fianna Fail)
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I thank the Leas-Cheann Comhairle. More than 18,000 farmers have been paid in full. Over 17,000 remain to be paid. The expenditure available to us this year will enable us to pay all the remaining 17,400 payment claims when they are processed. Of those a 40% payment will be made during the course of this calendar year, 40% of the remaining payment will be made in the first days of January 2010 and the remaining 20% in January 2011.

Deputies:

Outrageous.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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Allow the Minister.

Photo of Brendan SmithBrendan Smith (Cavan-Monaghan, Fianna Fail)
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This funding will amount to approximately €550 million. If one takes the coming January date, within ten months €988 million will have been paid out of a scheme that will cost the Exchequer in excess of €1 billion. This means that 90% of all eligible claimants will be paid by 3 January next. With the funding available this year we could have made a decision to pay more than 7,000 applicants their full payment. That would not be fair to other people who would receive no payment this year. The Government decided that payments should be made on a proportionate basis, namely, 40% to claims that are processed and cleared with immediate effect. Others will be paid 40% of their entitlement as they are cleared and passed during the year.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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I will allow a further supplementary question from Deputy Creed.

Photo of Brendan SmithBrendan Smith (Cavan-Monaghan, Fianna Fail)
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Another aspect of Deputy Creed's question concerned the banks. I appreciate there are farmers who have substantial commitments and bank loans. Everybody in this House knows these farmers who depend on the payments to come through.

Photo of Ulick BurkeUlick Burke (Galway East, Fine Gael)
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Pay them.

Photo of Brendan SmithBrendan Smith (Cavan-Monaghan, Fianna Fail)
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I have spoken already to the major banks and am to meet them during the course of this week. I have asked that particular provision be made for individual farmers, in respect of their loans, to comprise a grant element. That money is guaranteed by the State even though it will not be paid as quickly as we would wish.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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I call Deputy Creed again.

Photo of Brendan SmithBrendan Smith (Cavan-Monaghan, Fianna Fail)
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I have asked the banks to give particular consideration to people with loans.

Photo of Michael CreedMichael Creed (Cork North West, Fine Gael)
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I have no alternative but to conclude that the Minister should consider his position as Minister for Agriculture, Fisheries and Food.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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There shall be no reaction from the Visitors Gallery.

Photo of Michael CreedMichael Creed (Cork North West, Fine Gael)
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It is an appalling vista that farmers will be asked to carry the can for the failure of the Minister to do a simple mathematical calculation.

Deputies:

Hear, hear.

Photo of Michael CreedMichael Creed (Cork North West, Fine Gael)
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There were 17,000 applicants. Reckoning an average payment of approximately €33,000 would have told the Minister what his Department Estimate required.

The Minister is in Cabinet and he and his colleagues are contemplating recapitalising the banks. Payment of the farm waste management scheme will recapitalise the banks, indirectly. I assure him that 99% of payments he will make out will go into banks.

Let us get down to brass tacks. I have had individual farmers sit opposite me with their wives, in tears because they did not have money to put bread on the table. The Minister should look at the range of other issues in which he is failing to make payments, in REPS and the farm investment scheme, in reduced payments in the suckler cow and the disadvantaged area schemes. The Minister has been an unmitigated disaster.

Deputies:

Hear, hear.

Photo of Michael CreedMichael Creed (Cork North West, Fine Gael)
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I ask the Minster, in the context of recapitalisation, to go back to the Cabinet room before it is too late and say that the €450 million required for this scheme will recapitalise the banks. It is not money for farmers but it will enable them to meet their requirements to continue in business.

I have one final question for the Minister. Will he meet the farmers' interest repayments? He stated the payments would be in the order of 40%, 40% and 20% over three years, which I reject as unacceptable. To make that more palatable, will he meet the contingent interest liabilities that farmers must pay in the meantime?

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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The Minister's final reply.

Photo of Brendan SmithBrendan Smith (Cavan-Monaghan, Fianna Fail)
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I totally reject what Deputy Creed said. I was told during the course of last year, before July, when €150 million had been provided for this scheme, that no further payments would be made between July and December. A sum of €150 million was provided in the Estimates at that time. Before the year was out we had allocated €414 million in payments and we have provided——-

Photo of Michael CreedMichael Creed (Cork North West, Fine Gael)
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The Minister should not blame the farmers.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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Allow the Minister.

Photo of Brendan SmithBrendan Smith (Cavan-Monaghan, Fianna Fail)
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I am entitled to speak. I belong to a party that believes in free speech and I should be entitled to answer.

Photo of Michael CreedMichael Creed (Cork North West, Fine Gael)
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The Minister is late coming to that.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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Allow the Minister, Deputy Creed.

Photo of Brendan SmithBrendan Smith (Cavan-Monaghan, Fianna Fail)
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During the course of last year I was told that payments would cease under the farm waste management scheme during the course of the summer.

Photo of Ulick BurkeUlick Burke (Galway East, Fine Gael)
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They have.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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If the Minister will yield, for a moment. I allowed Deputies to put their questions and they must let the Minister speak.

Photo of Brendan SmithBrendan Smith (Cavan-Monaghan, Fianna Fail)
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During the summer I was told payments under the scheme would cease. At that time we had spent €150 million. The Department put in another €32 million, a further €195 million of a Supplementary Estimate, which was regarded as an exceptional item of expenditure, and a further €30 million before the end of the year. We brought the payments practically up to date by the end of the year, amounting to €414 million——

Photo of Michael CreedMichael Creed (Cork North West, Fine Gael)
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As the Minister should.

Photo of Brendan SmithBrendan Smith (Cavan-Monaghan, Fianna Fail)
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During December more than 14,000 claims came in. We were told by plenty of people in this House that work would not be done and claims would not be made. We stated very clearly that payments would be honoured. The suckler cow scheme is a new stream of income that was paid out for the first time during December. Some €33 million was paid out before the end of the year and another €12 million has already been paid during January——

Photo of Michael CreedMichael Creed (Cork North West, Fine Gael)
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The Minister should deal with the farm waste scheme.

Photo of Ulick BurkeUlick Burke (Galway East, Fine Gael)
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The Minister should deal with the question in front of him.

Photo of Brendan SmithBrendan Smith (Cavan-Monaghan, Fianna Fail)
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Deputy Creed brought up the supplementary measures. Some €313 million was also paid out during 2008 under REPS. All these commitments will be honoured.