Michael Moynihan (Cork North West, Fianna Fail)
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Question 23: To ask the Minister for Agriculture; Fisheries and Food the maximum number of farmers that will be allowed take part in the agri environment options scheme in 2011; and if provisions will be made to enable up to 10,000 farmers take part in the scheme in 2011. [7841/11]

Michael Colreavy (Sligo-North Leitrim, Sinn Fein)
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Question 24: To ask the Minister for Agriculture; Fisheries and Food the reason €50m budgeted and committed for the agri-environment options scheme has been reduced to €25m; the reason the number of approved applicants will be limited to a maximum of 8,000; the further reason there are no proposals for additional payments in disadvantaged areas; if he has calculated the consequential impact on farming sustainability and on the budget of Department of Social Protection; and if he will make a statement on the matter. [7791/11]

Simon Coveney (Cork South Central, Fine Gael)
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I propose to take Question Nos. 23 and 24 together.

I congratulate Deputy Moynihan, Deputy Colreavy and Deputy Pringle on being made spokespersons on agriculture and fisheries for their parties or groups in the House. I look forward to a constructive relationship with them. We have many challenges in the next two years in respect of budgetary constraints, but agriculture and fisheries can be a good news story for the economy. I hope the Deputies find me straight, blunt and open to sharing information. I hope they will be able to work in the same spirit with me.

On Wednesday, 6 April, I announced the re-opening of the agri-environment options scheme, or AEOS, for 2011 and confirmed that the scheme will be open for applications until 16 May. I have made funding of €25 million per annum available for this scheme, with a maximum payment to any farmer of €4,000 per annum. I decided on this level of funding following long and careful consideration, and taking account of the expenditure ceilings for my Department, as set out in the National Recovery Plan 2011-2014. The number of applicants that will be accepted into AEOS for 2011 will be determined by the overall expenditure ceiling of €25 million per annum. The actual number accepted will depend on the aggregate of the payments due under the individual plans submitted. Applications will be accepted based on the priority access criteria and scoring matrix set out in the scheme terms and conditions, up to the expenditure ceiling of €25 million.

While I would like to have been in a position to announce this scheme earlier, the reality of putting it together was made all the more challenging due to the budgetary constraints in place. My Department must operate within the limits of the national recovery plan and funding was not provided for the launch of AEOS in 2011 when the plan was published. That is simply a fact. While difficult choices had to be made, I felt the commitment given to open the scheme in 2011 should be honoured. Given the overall constraints, it was not possible for me to commit €50 million a year to the scheme. The funding of €25 million per annum which I have announced must be found within the overall expenditure ceilings for the Department in the national recovery plan, and I will critically examine every element of the Department's expenditure to ensure that all available funding is maximised.

Prior to finalising the 2011 eligibility criteria and scheme terms and conditions, my officials carried out a review of the 2010 scheme to gain from the experience of operating that scheme. On the basis of this review I have put in place a scheme under which farmers will to be paid to undertake actions which specifically target the three objectives of halting the loss of biodiversity, contributing to the improvement of water quality and combating climate change.

While the 2011 scheme is broadly similar to last year's scheme, some minor changes have been introduced that are designed to enhance the benefits to both participating farmers and the environment. Farmers successful in gaining entry to this year's scheme will be paid to undertake identifiable and verifiable environmental measures under a scheme which builds on the success of the rural environment protection scheme and the inaugural agri-environment options scheme. The scheme will be attractive to farmers while delivering real, worthwhile environmental benefits to the wider community.

The contract period for the new scheme will be for five years, but the terms and conditions and payment rates for the new participants will apply until the end of 2013. At that stage, participants will have the option of terminating the contract without penalty or of opting to join whatever scheme may be introduced in the new EU financial perspective programming period. This is a sensible change which was introduced by the Commission to avoid overlap between EU programming periods.

Additional information not given on the floor of the House.

As with last year, farmers with commonage land or designated special areas of conservation or special protection areas will have to follow a "sustainable management plan" prepared by a planner and will be given priority access to the scheme. Applicants other than those requiring a sustainable management plan are not required to engage a planner to complete their application form. Such applicants will be awarded entry to the scheme on the following basis. Farm partnerships will rank second in priority in the selection process. Applications for all other holdings will then be considered and will be ranked initially according to the marking system shown set out in the terms and conditions which is based on the environmental actions selected by the individual farmer. Further selection will be applied, if necessary, using the following criteria: location of farms in less favoured areas; previous participation in REPS; and farm size, favouring smaller holdings, based on the utilisable agricultural area declared in the 2010 single payment scheme application.

The payments set out in the scheme terms and conditions do not allow for additional payments for farmers in disadvantaged areas for two reasons. First, to do so would result in fewer farmers gaining entry to AEOS. Second, such farmers already receive an income support to compensate them for the additional costs associated with farming in such areas under the disadvantaged areas scheme administered by my Department. Due to the budgetary constraints that I have outlined, I will not propose any increase in the payments under the disadvantaged areas scheme.

The purpose of AEOS is to compensate farmers for income forgone or costs incurred for complying voluntarily with specific agri-environmental measures. That it will be attractive to farmers and will provide a welcome income stream for the successful applicants. It is also a clear indication of my and the Government's commitment to sustainability and the development of the agri-food sector, even in very difficult economic and fiscal circumstances.

Michael Moynihan (Cork North West, Fianna Fail)
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I take the opportunity to wish the Minister and the Minister of State well in their Department. There is no doubt that agriculture has been at the forefront of society. It is one of our great indigenous industries and there are challenges ahead. I also wish Deputies Colreavy and Pringle well in their respective roles.

I thank the Minister for his reply on the AEOS. Provision was made in the budgetary process and in December's budget for the maximum rate of €5,000 and eligibility for 10,000 applicants. In the official briefing documents received by the Minister from the Department on the structures and so forth, it was clearly stated that in December 2010, the previous Minister announced that the scheme would reopen in 2011 with a maximum payment rate of €5,000 per farmer for up to 10,000 applicants. The Department's press release stated that the scheme would open in broad terms, as was announced in 2010. Therefore, we have difficulty accepting the reasons, notwithstanding the various challenges that exist. Provision was made for the full scheme to go ahead in 2011 and we have difficulty in accepting the reasons the drastic cuts were made to the AEOS scheme. Why did the current Minister not honour the commitments given by the Minister at the time?

Simon Coveney (Cork South Central, Fine Gael)
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I am glad this issue was raised by a member of the party Deputy Moynihan represents. The announcement of an AEOS scheme for this year was made by the previous Minister, but there was no provision in the budget for that. The Department of Finance had no provision for it. My Department had no provision for it. There are expenditure ceilings, to which the previous Government signed up, to reduce current expenditure in my Department by €60 million next year, €40 million the year after that and €20 million the following year. This was done to try to solve the financial mess that has been created here. Unfortunately, we are now required to try to address that under the constraints that are unavoidable.

It is simply untrue and misleading to say that the previous Government had provided for a €50 million AEOS scheme and that this Government is not delivering on it. If the Deputy is trying to paint that picture, he is just continuing the dishonesty that was there when this scheme was announced for the first time. Perhaps he might be able to tell me where he would find the extra €50 million for this scheme. If that was the case, there would have to be €110 million in expenditure reductions next year in my Department. That is the reality. The last Government signed up to €60 million in savings as part of the four-year budgetary programme to allow this Government to access funds from the EU Stability Fund. There was no AEOS scheme included in that. If such a scheme was planned by the Government, then the cut backs next year would have to be €110 million. Two days after taking office I was given a file with a question to the effect, "What are we going to do with the AEOS because we have no money and a promise has been made?" That is the context for a slimmed down scheme for which I had to find €25 million. I had one hell of job persuading the Department of Finance to allow me to open it. People need to know the truth. Unfortunately, some have been playing politics with this issue. The reality is that all of the accounting advice was not to go ahead with the scheme. However, we have gone ahead with it because it is worthwhile.

Michael Colreavy (Sligo-North Leitrim, Sinn Fein)
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I thank the Minister for his good wishes. I also wish him the very best, as I know he has a very tough brief. This is one of the few functioning areas of the economy, with such potential that the decisions and choices the Minister makes will have a big impact on how the country progresses in the next five, ten to 20 years. At some stage I would love to see him visit Sligo-North Leitrim because it has the most beautiful scenery.

Simon Coveney (Cork South Central, Fine Gael)
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I have been there and know it well.

Michael Colreavy (Sligo-North Leitrim, Sinn Fein)
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However, the land is marginal for agriculture, but the Minister would be most welcome. He comes from County Cork where the land is good.

Michael Moynihan (Cork North West, Fianna Fail)
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Not all of it.

Michael Colreavy (Sligo-North Leitrim, Sinn Fein)
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I shall certainly work positively with the Minister. Where Sinn Féin believes something is good, as Deputy Martin Ferris did before me, I shall work enthusiastically with the Minister. However, where we believe more can be done, we shall be resolute in insisting that the right choices and decisions are made.

I included in my question a number of factors. Many farmers in the area I represent are so dependent on this funding that if they do not receive it, or if it is reduced, they will move to schemes such as the farm assistance scheme and become dependent on social welfare. I have asked the Minister whether that contingency has been taken into account. He might be controlling the limits set in the agricultural budget, but-----

Michael Kitt (Galway East, Fianna Fail)
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We must allow the Minister to answer that question because we are running short of time.

Simon Coveney (Cork South Central, Fine Gael)
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I am very conscious that many farm families are and have been reliant for practically all of their farm profits on schemes such as REPS and the current AEOS. While we allow the more fertile land to be farmed in a more intensive manner to produce more food and meet the targets set under Food Harvest 2020, in addition to all of the other exciting events that will happen in the agriculture sector, I hope that in the next five years we will also ensure those managing marginal land can also survive. That is why the AEOS, even though it is not as generous as I would have liked, targets the limited resources we are aiming at it. It favours the small farmer, those farming in disadvantaged areas. If I had time, I would outline the criteria. Anybody farming in an SAC, an SPA or a commonage area automatically qualifies for the scheme. That covers up to 4,000 people for a start. As regards the remaining 4,000, if there are more applicants than places available, we will prioritise on the basis that are people are located in a less favoured area, as well as on the basis of previous participation in REPS, indicating earlier reliance on a REPS payment. After this we will look at farm size and favour smaller holdings based on the agricultural area being farmed as listed in the 2010 single farm payment application. In other words, we shall target the money available at the families and farms that need it most and those farming in an environmentally friendly manner. We will target disadvantaged areas such as Sligo, Leitrim, Donegal, parts of Kerry and west Cork to ensure the farms reliant on this income will continue to receive it.