Brian Stanley (Laois-Offaly, Sinn Fein)
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Question 2: To ask the Minister for Agriculture; Food and the Marine if the limits on expenditure agreed under the bailout programme has the potential to adversely impact on the potential take-up of the EU infrastructural support, or other funds; and if he will make a statement on the matter. [28863/12]

Simon Coveney (Cork South Central, Fine Gael)
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All Departments have been allocated fixed expenditure ceilings for the period 2012 to 2014 under medium-term expenditure framework which was introduced by the Government in the comprehensive expenditure report. The report outlines the Government's plan for a return to sustainable growth in the economy and sets out in some detail the measures that will be taken to put the national finances in order including annual public expenditure and revenue targets for the period. The expenditure ceilings in the report are given effect through the annual Votes for different Departments, including mine.

The expenditure ceilings which have been set for my Department represent annual gross expenditure. The cost of all administration, service delivery and scheme implementation must be accommodated within the ceiling. In addition to the gross expenditure corresponding to the expenditure ceiling, the Vote for the Department provides for net expenditure which takes account of appropriations-in-aid, including EU receipts. In accordance with long-established practice under Government accounting procedures, all receipts, including the drawdown of EU funding are accounted for separately in that manner. There has been no change in the situation under the arrangements introduced under the comprehensive expenditure report.

EU transfers take the form of the funding for those schemes which are 100% funded by the EU, such as the single payment scheme, and the co-funding of schemes under the Rural Development Programme 2007-13 and the Operational Programme for Fisheries 2007-13. The Department has been maximising the levels of EU drawdown under both programmes to date. My intention is to continue to manage the funding available to my Department in the Vote to ensure that as far as possible all available funds are drawn down. This is an ongoing process which will be carefully managed within the constraints of the annual Vote for the Department.

Brian Stanley (Laois-Offaly, Sinn Fein)
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I thank the Minister for his reply. Obviously the bailout programme places conditions and restrictions on expenditure across all Departments, including the Department of Agriculture, Food and Marine, as the Minister outlined. It covers not only expenditure, but also policy as we have seen with other Departments. If the Department of Agriculture, Food and Marine is bound by the Government expenditure rules, could it potentially cause difficulty this year or in the final year of the programme, 2013, when we try to draw down those funds? As the Minister said, some of them are 100% funded from Europe and some of them have a co-funded dimension. Could the funds from Europe exceed the Department of Agriculture, Food and Marine limits on expenditure from the point of view of co-funded programmes and thus harm the ability to draw down those funds?

Simon Coveney (Cork South Central, Fine Gael)
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That is a fair question. My Department is different from many other Departments in that many of the schemes we finance are heavily co-funded by the EU. These include AEOS, which is 70% co-funded, DAS and TAM scheme in terms of rural development funding. A very significant element of our budget comes through schemes co-financed by the EU. There is also the €1.2 billion to €1.3 billion each year of direct payments which are 100% funded. These direct payments do not come under our ceilings. The issue for us is trying to manage staying within our expenditure ceiling while at the same time drawing down all the available co-funding for schemes under Pillar II money, which is under Access 1, 2 and 3. They are the schemes with which we are all very familiar, the grant aid, Leader programmes and so on. We are working carefully to ensure - as farmers would say - we do not leave any money behind in Europe. So far we have done that very successfully and obviously I am working to ensure we maximise the drawdown of EU funds. In recent months the European Commission has had a decision confirmed that allows it to increase the co-funding level of European moneys for some of the co-funding schemes by up to 85%. We need to try to work that system as best we can to make it as cost efficient for the Irish Exchequer as possible.

Brian Stanley (Laois-Offaly, Sinn Fein)
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If the element of co-funding has been increased across the schemes, obviously that will be beneficial. From the Minister's reply, do I understand correctly that the schemes that are co-funded may be affected but the ones that are 100% funded will not be affected under the restrictions of the troika programme?

Simon Coveney (Cork South Central, Fine Gael)
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Single farm payment is not affected by ceilings. I can assure the Deputy that we will do everything we can to ensure we draw down all the available funding under the rural development programme. However, it is a management exercise to do that when we are dealing with ceilings as well as Exchequer targets. This is more difficult for my Department because setting expenditure ceilings as we have under the troika programme is a very blunt tool. It is just about what we spend and does not also take account of what we earn. When all the expenditure, whether it is the co-funding from the Exchequer or from the European Union, counts towards the expenditure ceiling it is a frustrating process. I would prefer just counting the Exchequer contribution towards an expenditure ceiling. This is difficult to manage, but we are doing it in a way that I hope will result in us drawing down all the available funds from Europe.