Séamus Kirk (Louth, Fianna Fail)
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Question 70: To ask the Minister for Agriculture, Fisheries and Food if the additional modulation agreed to in the CAP health check will result in a loss of money to farmers here. [4940/09]

Brendan Smith (Cavan-Monaghan, Fianna Fail)
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The agreed rates of additional modulation will generate approximately €120 million in total over the four years from 2009-2012 in transfers from the single farm payment to rural development. These additional funds will stay in Ireland and be passed back to Irish farmers under the rural development programme. As such, the additional modulation represents a redistribution of money from the single farm payment scheme to other farm payment schemes. As this process will involve the transfer of funds from one type of payment to another, it will be income-neutral for farmers as a whole.

Andrew Doyle (Wicklow, Fine Gael)
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That is not true.

Brendan Smith (Cavan-Monaghan, Fianna Fail)
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In line with the new regulations the funds must be used for measures to address the so-called "new challenges" of climate change, water management, bio-energy and biodiversity, dairy restructuring and innovation. The consultation process as to how these funds can best be used for the development of Irish agriculture is currently under way. It is also worth noting that more than 50,000 Irish farmers will be exempt from the increased rate of modulation.

Séamus Kirk (Louth, Fianna Fail)
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The Minister may not have the statistics, but could he tell us what will be the total annual benefit to the agriculture industry of the modified arrangement?

Brendan Smith (Cavan-Monaghan, Fianna Fail)
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With the existing modulation arrangements, the amount collected annually is €42.5 million. That modulation is in place up to 5%. With the new rates that will be applicable there will be an increase in modulation rate of 2% this year and 1% in 2010, 2011 and 2012. The additional funding that will be generated for the modulated fund will be €17 million this year, €25 million in 2010, €34 million in 2011 and €42 million in 2012. That brings the cumulative amount in the period up to 2012 to a total of almost €120 million.

Andrew Doyle (Wicklow, Fine Gael)
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The Minister said these would be zero gain, but there will be a net loss to some farmers who will not avail of some of the schemes. Can the Minister clarify whether some of the REPS 4 budget is being taken out of the modulated money? The spin on this is that REPS 4 and single farm payments have separate budgets, but is this a transfer of funds from the single farm payment into REPS 4?

Brendan Smith (Cavan-Monaghan, Fianna Fail)
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Up to now the modulated funds that were available, which were fairly small, went into the overall rural development programme. The Exchequer puts a substantial amount more into the rural development programme than the necessary requirement, because it is co-funded by the European Union. Deputy Doyle's point is correct in that there was an effort in the past to ensure the modulated funds would go to the broader rural development programme, which would encompass measures outside the farm gate. In the health check, I argued strenuously that the money should be retained on farms and not go to programmes that did not directly benefit individual farmers. Programmes will be introduced, particularly in the areas of climate change, water conservation, biodiversity and innovation, which can be availed of by individual farmers. I said in my initial response that the consultation process had begun and we have asked for submissions to be returned to the Department by 16 February. All the funding will go back to on-farm activities, not those outside the farm gate, as other countries would have argued for.

Seán Sherlock (Cork East, Labour)
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The question is whether there will be a loss of money to farmers. The point of modulation, as the Minister has stated, is to contribute towards environmental measures such as water conservation. Will the moneys involved be controlled by the Department? Will they be paid directly to farmers, or will they be paid to other agencies as determined by the Department to administer those schemes? The point is whether farmers will lose money through the measures that are supposed to be incorporated within modulation.

Brendan Smith (Cavan-Monaghan, Fianna Fail)
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The funding will remain in schemes operated by the Department, not outside bodies. For argument's sake, we could have a top-up in REPS which would consist of an extra measure, but the money will not go to agencies, projects or programmes that are outside the farm gate.