Michael Moynihan (Cork North West, Fianna Fail)
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Question 1: To ask the Minister for Agriculture; Food and the Marine the number of farmers who will be affected by the announced reduction in the disadvantaged areas scheme; and the number of farmers affected by reductions in the REP scheme. [40087/11]

Simon Coveney (Cork South Central, Fine Gael)
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Many difficult decisions had to be made by the Government in the light of the recognised ongoing weaknesses in the public finances. In that regard, savings had to be found in my Department's 2012 budget, in the context of which a decision was taken to limit the funding for the 2012 disadvantaged areas scheme to €190 million. To achieve this saving, priority is given to active farmers who farm exclusively within the disadvantaged areas, and there is a proposed range of technical adjustments to the qualifying criteria of the scheme. As the disadvantaged areas scheme forms part of the 2007-13 partially EU-funded rural development scheme, the approval of the EU Commission is being sought for the proposed changes. However, the reduction in the level of funding under the scheme will not have any impact on amounts drawn down from the EU under the rural development programme.

In regard to the proposed changes, I am pleased the savings can be achieved without reducing the rate of aid per hectare and with no reduction in the maximum area payable of 34 hectares. That means the reduction will have no impact on the level of aid payable to active farmers with holdings made up entirely of disadvantaged area land.

The proposed adjustments include increasing the minimum stocking density requirement from 0.15 livestock units per hectare to 0.30 livestock units per hectare in respect of 2011, the reference year; calculating the stocking density over a retention period of six months, with the average calculated over the 12 month period; excluding horses, with the exception of equine breeding enterprises or other commercial horse enterprises; providing for reduced rates of aid where applicants hold both eligible and ineligible land, that is, non-disadvantaged areas land; and excluding land located more than 80 km from an applicant's main holding where that main holding is situated outside disadvantaged areas.

Michael Kitt (Galway East, Fianna Fail)
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Perhaps the Minister could give the rest of his reply when Deputy Moynihan asks a supplementary question.

Simon Coveney (Cork South Central, Fine Gael)
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I will give a direct answer to the question. We do not have exact figures for the number of people who will be affected negatively by the changes to the disadvantaged areas scheme. The figure on REPS is much easier to calculate. There are 30,900 people in REPS 4 and they will experience a cut of 10% to their payments under the scheme.

Michael Moynihan (Cork North West, Fianna Fail)
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I have three brief points, the first of which concerns disadvantaged areas. While the vast majority would welcome the initiative to prioritise active farmers, there is a particular group who will be badly affected by the change. Perhaps when the Minister knows the number that will be affected, he will let us know.

On a different matter, also related to the budget, what did the Minister hope would be achieved by the levy imposed on the dairy industry? There is a reaction from the industry thereto, particularly from farmers. What does the Minister hope to fund with the proceeds of the levy?

Simon Coveney (Cork South Central, Fine Gael)
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That is an entirely different question but I would be happy to try to answer it with the understanding of the Chair. We are trying to recognise the fact that, when quotas go after 2015, there will be a significant increase in the volume of milk being produced by dairy farmers. People anticipate that within the first 12 to 18 months, there could be an increase of between 15% and 20%. We must plan for that now by investing in new markets, developing products and building brands so that when there is a significant increase in the volume of milk we need to process and sell, there will not be price volatility as a consequence.

We have not announced the opening of a new dairy levy yet. Following a long and very constructive meeting with the Irish Dairy Board, I have agreed to have, between now and the end of February, consultation between my Department, the Irish Dairy Board, Bord Bia and farming organisations to establish and agree on the magnitude of the job that needs to be done over the next three years. This is to prepare for the dramatic change in the dairy industry and ensure we are using all the resources available to the State in organisations such as Bord Bia, where there is a lot of expertise, to complement what the Irish Dairy Board is already doing. It is not about one or the other but about the possibility of Bord Bia complementing and adding to the work the Irish Dairy Board is doing to expand and plan for new markets. The latter now understands where I am coming from; perhaps it did not last week. It is happy to proceed on that basis.