Joe McHugh (Donegal North East, Fine Gael)
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I welcome the Minister of State to the House. I have been in contact with numerous farmers in recent weeks regarding the farm assist scheme, which is becoming quite a problem for many farmers. The measures in the last budget relating to the farm assist scheme, which is effectively and technically farmers' dole, have resulted in quite a substantial cut to the earning capacity of many smaller farmers. I know of one case where the payment has been reduced from €280 per week to €80 per week, which is a completely unsustainable cut, especially in the context of the unviable nature of many smaller holdings.

The farming industry in general has become a victim of its own success in public discourse. The general assumption is that farming is going well, and indeed it is in some respects. The price of cattle has increased quite substantially in recent years, but the reality for many farmers, as the Minister of State will appreciate, is that costs have risen greatly. That part of the story has not been factored into the public discourse in terms of the viability of many small farm holdings. The cost of fertiliser, meal and fodder has increased dramatically, placing a massive burden on smaller farm holdings and farmers. Farmers are having a very serious conversation among themselves about quitting farming because it is actually costing them money to stay in farming. While that is happening, we also have the situation where the farm assist scheme is being cut back, as in the case of the drop from €280 to €80 per week I just mentioned. That particular farmer has two young children and a partner who is not working and is in a very difficult financial situation.

In the overall context of the farming model in Ireland, which has been the subject of much discussion in the context of the ongoing Common Agricultural Policy, CAP, negotiations, attempts are being made to define productive farming and non-productive farming. The question has arisen as to whether productive farms are small or larger, but the whole thing is interrelated. Agriculture in Ireland is connected together, whereby there are multiple small holdings supporting small suckler herds from Donegal to Kerry. These west of Ireland farms are very small but they feed into the bigger model. Smaller farmers are producing small numbers of cattle, which are then moved on to the bigger farms to be finished off.

My main point is that the cuts to farm assist payments to small farmers must be reviewed in light of the recent fodder crisis, escalating costs and the severe difficulties being faced by many farmers. If multiple small farmers decide that small farm holdings are not viable anymore, they are faced with the stark choice of going on the dole and receiving €200 per week or staying on farm assist and losing money by staying in farming. We are at a dangerous juncture for farming in this country and face the prospect of numerous small farmers along the west coast deciding to get out of farming. That will damage our industry at a national level.

John Perry (Sligo-North Leitrim, Fine Gael)
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I thank Deputy McHugh for raising this important matter, which I am taking on behalf of my colleague, the Minister for Social Protection, Deputy Burton, who cannot be here today.

The farm assist scheme is based on jobseeker's allowance. It was introduced in 1999 to replace the smallholders unemployment assistance for low-income farmers, without the requirement to be available for and genuinely seeking work. Farm assist recipients retain all the advantages of the jobseeker's allowance scheme such as the retention of secondary benefits and access to activation programmes.

The budgetary changes in 2013, which took effect from April 2013, end the more beneficial treatment of farm assist claimants relative to the treatment of other self-employed persons who would be claiming jobseeker's allowance, thereby ensuring greater consistency in the treatment of self-employed persons on both farm assist and jobseeker's allowance. The budget changes increased the amount of means from self-employment which is assessed against the claim from 85% to 100% and discontinued a means-testing disregard for child dependants of claimants.

The headline rates of farm assist are being maintained so farm families with the lowest income will be least affected by these changes. Farm assist remains a flexible payment and farmers experiencing lower levels of income or cashflow problems can ask their local welfare office to review the level of means applying to their claim. The assessment of means for the purpose of qualifying for farm assist is designed to reflect the actual net income and takes into account gross income less any expenses necessarily incurred from farming. Income and expenditure figures for the preceding year are generally used as an indicator of the expected position in the following year. However, account is taken of any exceptional circumstances to ensure the assessment accurately reflects the current situation.

It should be noted that the farm assist means test continues to offer distinct advantages to farmers. For example, payments received under the agri-environment options scheme, AEOS or the special area of conservation, SAC, scheme are assessed separately from other farm income. The first €2,540 of such income is disregarded, 50% of the balance and related expenses are disregarded, with the remainder being assessed as means. In addition, farm assist participants can participate in the rural social scheme which provides additional resources to maintain and improve local amenities and facilities in rural communities. Communities benefit from the skills and talents of local farmers and fisher persons, while participants experience opportunities to improve existing skills or develop new ones and perform valuable work in the community.

The Minister for Social Protection met a delegation from the Irish Farmers Association on 15 May 2013 to discuss a range of issues, including difficulties arising as a result of fodder shortages and the operation of the farm assist scheme generally. Officials from the Department of Social Protection are in ongoing contact with the IFA regarding these issues. The Minister reiterates the statement she made at the meeting with the IFA that farmers currently experiencing financial difficulties as a result of the fodder shortages should apply for farm assist from their local social welfare office. The purpose of the scheme is to provide an income support to farmers who are facing significant difficulties and who may need a helping hand through these difficult periods. The scheme will assist farmers who are experiencing income related problems to continue to farm until their income levels rise in the future.

Joe McHugh (Donegal North East, Fine Gael)
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I thank the Minister of State for the reply. I welcome the fact that the Minister has been engaging with the IFA. I also welcome the fact that there is an acknowledgment of the financial hardship being endured by farmers as a result of the fodder crisis. However, the difficulty is that the dole was protected in the last budget but farm assist, which is effectively farmers' dole, was not protected. It fell between two stools because it is both a farming and a social protection issue. I know from private conversations with the Minister that she understands that farmers are under constraints. I would like her to discuss this matter with the Minister for Agriculture, Food and the Marine, Deputy Coveney and the Minister for Finance, Deputy Noonan, to see how we can protect unviable family farms, of which there are many. While there are many good news stories in the agrifood sector and money is being made in some sectors, it is costing many small farmers to keep going at the moment.

Another issue is the fact that there are different interpretations of what can be included as farming expenses. For example, a farmer who pays for diesel for a trip to the vet cannot include this as an allowable expense for the purposes of the means test.

Not all farmers are in the same situation but the danger is that farmers will be tempted away from farming as a result of this measure. There is a big debate about the definition of "productive farming". These farms are not productive, but the farmers work against massive constraints with regard to fodder, fertiliser and grain costs. They have massive financial pressures. If farmers decide to leave farming, it will be a bigger problem for our overall agriculture sector and is something on which we should focus. Will the Minister of State contact the Minister for Finance, Deputy Noonan, the Minister for Agriculture, Food and the Marine, Deputy Coveney, and the Minister for Social Protection, Deputy Burton, on this matter with regard to next year's budget?

John Perry (Sligo-North Leitrim, Fine Gael)
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The issue raised by Deputy McHugh is very important. The vibrancy of rural society is based on farming and the community. It is important for the renewal of villages and towns that farming remains viable. I will certainly forward the Deputy concerns with regard to the 2014 budget. The Minister is very conscious of social and community enterprise and regeneration within farming communities. We certainly would not like to see a reduction in the viability of any farming income. The farm assist scheme includes a huge disregard of income. Welfare officers are very receptive with regard to any exceptional case. Discussions will take place between the Ministers, Deputies Coveney and Noonan, and the IFA. The Minister, Deputy Coveney, has concern, understanding and respect for the viability of small farming families. Based on my experience in Sligo, Deputy McHugh has raised a very important issue and I will certainly forward his concerns to the Ministers, Deputies Noonan and Burton. I have no doubt he will speak directly to the Minister, Deputy Coveney, on this very important issue.