Michael Collins (Cork South West, Independent)
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I acknowledge Deputy Margaret Murphy O'Mahony's input on this issue. I had intended to share time with the Deputy but she had another commitment this evening and was unable to come to the House.

Grain farmers are going through one of the most difficult periods experienced on family farms in many decades and farm incomes are at an all-time low. I have spoken at length with some members of the farming organisations and grain farmers in west Cork in recent weeks.

I have visited many grain farmers from Kinsale to Skibbereen and seen at first hand the crisis. Grain farmers across the country have lost much of their crops and many face ruination. Many grain farmers in County Cork, particularly along the coast, are in severe difficulties as a result of the recent weather conditions which were unsuitable for grain harvesting. This has been the most difficult harvest in the past 30 years. Instead, the grain harvest this year turned out to be a salvage operation. The bad weather, coupled with the low prices of grain in the world market and high input costs such as the cost of fertilisers and sprays, means the situation has reached crisis point. Many grain farmers have lost between €200 and €250 per acre this year.

Many growers of winter grain along the south coast lost their crops due to bad winter weather. They then replanted their crops with spring grain crops which led to extra expense. Many of these crops were then damaged by the bad autumn weather, compounding the problem for many grain growers in the south. Many of them are left with large bills to pay to co-ops and other merchants. This is a serious emergency for the sector and it is clear compensation should be made available immediately to rescue the industry.

This year is the fourth year in a row in which many grain farmers find themselves trading at a loss. Over the past four years, the amount of land in cereal production dropped by 100,000 acres. It is predicted to fall by a further 67,000 acres in 2017. The whole farming sector is suffering from low prices. The Government must stick up for it and support our farmers. Without support, farmers will not survive. The IFA, Irish Farmers Association, and the ICSA, the Irish Cattle and Sheep Farmers Association, have already made a case to Europe on this issue but they need strong support from the Minister for Agriculture, Food and the Marine. French farmers experienced similar problems this year and their Government is seeking compensation from the EU. Did the Irish Government support this call of the French Government?

Without a compensation package being made available to grain farmers, many of them will not survive. The sector is in real crisis. Will the Minister do everything in his power to support grain farmers in this difficult time? He would not be setting a precedent if he did, as in the recent past dairy farmers have been rightly compensated in a time of difficulty while forestry owners have been given replanting grants. Many grain farmers have told me that, due to the bad weather, their yield was as low as 0.8 of a tonne to the acre. Normally, they would have three tonnes to the acre. It is clear this year's harvest was simply a salvage operation, leaving them with huge losses.

Andrew Doyle (Wicklow, Fine Gael)
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I am pleased to have this opportunity to address the House on this important issue. I fully acknowledge and accept there are ongoing difficulties being experienced by the farming community, not least by our tillage farmers.The Minister for Agriculture, Food and the Marine, Deputy Michael Creed, is aware of the specific difficulties in County Cork and other coastal locations that some tillage farmers experienced this year at harvest as a result of sea mist.

This sector is an important area in the agricultural economy but it has been a challenging year both in terms of market returns and variable weather conditions experienced during the harvest. The Minister recently chaired a meeting with the main stakeholders in the tillage sector. At the time, the Minister said this meeting provided a platform for the stakeholders to express their views and concerns on the challenges they are facing but, equally, to discuss the opportunities that lie ahead for the industry. At that meeting the Minister outlined that one of his chief priorities was to provide low-cost and more flexible finance.

In this regard, he was happy to announce on budget day plans for a €150 million agri-cash flow loan support scheme. This financial instrument has been developed in conjunction with the Strategic Banking Corporation of Ireland by leveraging EU and Exchequer funding totalling €25 million from the Department to deliver a total loan fund of €150 million. This will support highly flexible loans for up to six years for amounts up to €150,000. The interest rate applying is 2.95% and the product will be available to livestock, tillage and horticulture farmers. Loans to tillage and horticulture farmers will be provided in line with the EU's agriculture state aid de minimisrequirements.

This is a cash flow support facility to improve the working capital position of farmers and other viable primary agriculture small and medium-sized enterprises, SMEs. The loans are primarily to pay down expensive forms of credit such as merchant credit and other short-term financing facilities such as overdrafts. Last week. The Minister welcomed the Strategic Banking Corporation of Ireland open call for financial intermediaries to deliver the scheme, which will be operational as early as possible in 2017.

The loan scheme is part of a three pillar strategy in response to income volatility that was announced in the recent budget, along with additional tax measures and farm payments. Among the tax measures agreed with the Minister for Finance was an adjustment to the current income averaging system, which will allow for an opt-out in an exceptional year. This will be available immediately for this year's tax liability and will go some way towards addressing current cash flow concerns.

As an additional support to cash flow on farms, including tillage farms, advance payments would be made this year in respect of the basic payment and greening payment schemes. Advance payments commenced on 17 October last, the earliest possible date by which payments can begin under the governing EU regulations. Up to last week, €786 million has been paid out to 119,904 farmers and payments are ongoing.

I am also pleased to note the processing of the areas of natural constraints payment scheme is on schedule and payments have already commenced during the third week in September. It is expected approximately 96,500 will fulfil the scheme eligibility requirements. The Department will also be opening a targeted agricultural modernisation scheme specifically for the tillage sector.

The Minister also stressed at the recent tillage stakeholders meeting that, in this changing landscape, we need to take a fresh look at our tillage industry to ensure that it is best positioned to withstand possible future threats and to avail of the new opportunities which may present themselves.

Michael Collins (Cork South West, Independent)
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I thank the Minister of State for his reply. The problem is that these farmers need immediate financial compensation. They are facing ruination. I have met them and the Minister of State probably has too in his constituency. Loan support at this time is not what they are looking for, as it will only create a further problem down the road for them. Tax breaks are not a solution to this crisis either. The solution is what the French Government looked for. Did the Irish Government support the French Government's calls for compensation in this area?

Why does the Government not see the serious struggle grain farmers are going through? It has been over four years, not just this year alone. These farmers are facing ruination and are in a desperate position in which they do not want to be. They are working men and women who want to work on their farms but are forced into seeking compensation. Will the Minister go cap in hand to Europe to plead on their behalf and get the compensation they need? Farmers across west Cork are in serious difficulty. I met with a farmer recently who tried to get his machinery on to his land for the harvest three times but could not each time. It is a serious situation for which loan support or tax reliefs will not work. These farmers need immediate financial compensation. Will the Minister join with the French in working towards that?

Andrew Doyle (Wicklow, Fine Gael)
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On the claim the French Government sought support at the Council of Ministers, while I was not at the recent meeting, I am given to understand that was not the case. There is no appetite in Europe for claims for emergency compensation. At best, the French call was lukewarm.

Tillage in parts of the country has suffered as badly as it did in 1985 and 1986, the last two bad years when it hit all the country. I have 15 acres of grain myself. The harvest was delayed because of weather and the birds did a lot of damage. We did manage to salvage a reasonable crop, however.

The east coast was not as badly affected as the south and west coasts.

There are two big problems with the grain sector, one of which has been masked in recent years by high yield. The first is global prices. These are invariably cyclical but they have been cyclically down for four consecutive years. This year, the problem was compounded by yield. The second issue in the Irish context is the fact that 50% of all crops in the arable sector are on rented or leased land. This is not the best way. The current conacre system is a disaster for farmers. It drives up prices with competition. We do not have any long-term security. Farmers say that every year they have to give a certain price, which is probably the value plus X. If, however, they were in a position to engage in long-term leasing, it would help. The agri-taxation measures taken a couple of years ago were to try to incentivise longer-term leasing to give a certain level of security. Partnerships can be arranged between farmers and landowners such that there is risk-sharing.

The low interest, flexible money is because tillage farmers in particular find the position on working capital and merchant credit really difficult. If they owe a certain pot of money to a merchant on a bank overdraft, it will still remain. If they can get low-interest money, with a six-year loan and an interest-only option for the first few years, they can clear it. If we adopt the principle that the cycle will actually improve, there is a chance that farmers can trade out of this, with the help of other supports. It is very difficult to secure specific funding just for a sector in Europe.