Denis Naughten (Roscommon-South Leitrim, Fine Gael)
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Question 9: To ask the Minister for the Environment; Community and Local Government the progress made to date on addressing the issue of funding food projects under the LEADER programme; and if he will make a statement on the matter. [23973/11]

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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The Rural Development Programme 2007-2013 is divided into 4 axes. Axis 1 deals with the competitiveness of the agricultural sector and axis 2 aims to improve the countryside and environment. The objectives of axis 3 are to support the diversification of the rural economy and improve the quality of life in rural areas. Axis 4 provides support for the use of a "bottom-up" approach to development which ensures local people are involved in decision making, thereby facilitating sustainable development in a more inclusive way. In Ireland the Leader approach is used to implement axis 3 measures.

A significant number of projects funded under the previous Leader+ programme, 2000-06, and under the diversification and business-creation measures of the current rural development programme, RDP, involve support for enterprise initiatives that add value to agrifood products. Basic agricultural products are listed in annexe 1 to the EC Treaty and are commonly called annexe 1 products. Under the main rural development regulation, support for adding value to annexe 1 products is facilitated under axis 1 of the programme. Early this year, Ireland was notified by the European Commission that support for adding value to agrifood products is only allowable under axis 1 and not under axis 3 of the RDP. As a result, grant aid under axis 3 of the RDP for this type of activity remains suspended.

Food and food-related businesses are a significant driver of enterprise activity in rural areas. These businesses require continued support as we look to ways to generate employment in rural Ireland. I and my Department continue to work with the Department of Agriculture, Fisheries and Food in pursuing a solution that meets the regulatory requirements. We are also maintaining ongoing contacts with the European Commission on the matter. While it is my objective to find an appropriate solution in the context of our overall budgetary situation, it is important to recognise that, overall, €62 million is available this year for the Leader elements of the RDP.

Denis Naughten (Roscommon-South Leitrim, Fine Gael)
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I thank the Minister for his reply. It is access rather than Axis that we should be talking about here today. Is it not the case that there are many food businesses that are looking to expand or start up? Some ten food businesses in my county are waiting for funding under the LEADER programme. Would the Minister agree that the LEADER programme has been extremely successful in the past in creating indigenous jobs in the food sector? The Minister's colleague, Deputy Fitzgerald, stated in the House last May that she believed progress would be made in this area in the immediate future. We are now a number of months down the road and that progress has not been made, which is costing jobs. From a retail perspective, this industry is worth €475 million to the Irish economy. Surely, we must find some type of a mechanism to release those funds.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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I agree with Deputy Naughten that this is a serious issue. That is the reason I continue to try to resolve it. What is needed is more flexibility in regard to how moneys can be drawn down through the various programmes. The Department of Agriculture, Fisheries and Foods, as the lead Department, also has a role to play in providing funds through the rural development programme. I will be taking the opportunity when in Brussels in the near future to see what can be done to progress matters. A better draw down of funds from the European side would also help. I await the outcome of the negotiations. I am conscious of the fact that many food businesses in rural areas cannot start up until such time as these funds are released.

Denis Naughten (Roscommon-South Leitrim, Fine Gael)
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I have two brief supplementary questions for the Minister. Will the Minister, when he goes to Brussels, make the case to the Commission that at a time when the troika is trying to stimulate our economy and create jobs we are being hampered in the creation of jobs in some of the most disadvantaged rural communities in the country because of a difficulty in regard to the interpretation of the rules coming from Brussels? It makes sense in light of the error that is being made to try to address this.

One of the most successful tents at the ploughing championships during the past number of years has been the LEADER tent. Droves of people have visited that tent to view and sample the produce of local food companies. Does the Minister believe it is crazy that next week, there will sadly be no food companies in the LEADER tent because of the bureaucracy attached to this? Surely it makes sense to try to release these funds and to get these businesses up and running and to promote and support them.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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There is no bureaucracy tied up in it rather, it is question of money. The European Commission decided to suspend the axis 1 programme.

Denis Naughten (Roscommon-South Leitrim, Fine Gael)
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The money is in place.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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No, it is not. If the money was in place there would be no difficulty. The money is not in the programme to which the European Commission allocated the money, as the Deputy knows. If it was in place, we would not be having this conversation. I will be visiting the LEADER tent at the ploughing championships. I have been lobbied on this issue by the Deputy and other Members and by LEADER people around the country. I am setting out an honest appraisal of where we are at. I am telling the Deputy exactly what I, with my colleague the Minister for Agriculture, Fishers and Food, am trying to do to achieve an outcome. We will try to make some progress during the next few weeks. I am disappointed we have not made further progress to date.