Martin Kenny (Sligo-Leitrim, Sinn Fein)
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2. To ask the Minister for Agriculture, Food and the Marine his plans for the restoration of the national reserve for entitlements under the basic payments scheme for farmers, with particular reference to new entrants to farming, returning emigrants, farmers under 40 years of age who were not farming in reference years and old young farmers. [37869/16]

Martin Kenny (Sligo-Leitrim, Sinn Fein)
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Will the Minister outline his plans for the restoration of a national reserve for entitlements under the basic payment scheme, with particular reference to new entrants to farming, returning emigrants and what is generally termed the forgotten farmers? While there are a small number of them throughout the country, it is a very serious issue that must be dealt with. This year there is no national reserve. Is there a plan for one next year?

Michael Creed (Cork North West, Fine Gael)
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The national reserve measure of the basic payment scheme provides for an allocation of entitlements to eligible applicants. EU regulations governing the national reserve provide that the two mandatory categories of "young farmer" and "new entrant to farming" must receive priority access to the reserve. A young farmer is defined as a farmer aged no more than 40 years of age in the year when they first submit an application under the basic payment scheme and who commenced their farming activity no more than five years prior to submitting that application. A new entrant to farming is defined as a farmer who commenced their agricultural activity during the previous two years and did not have any agricultural activity in their own name and at their own risk in the five years preceding the start of the current agricultural activity.

Returning emigrants who meet the eligibility criteria for applicants under the national reserve will be eligible to submit an application for an allocation of entitlements. The terms and conditions applicable to all categories under the national reserve require applicants to have a gross off-farm income of €40,000 or less in either of the two tax years prior to the year in which the application is made to the national reserve. All national reserve applicants must also comply with requirements in terms of an agricultural education qualification at Further Education and Training Awards Council, FETAC, level 6 or equivalent.

The regulations governing the operation of the national reserve also include an optional provision whereby member states may use the national reserve to allocate new entitlements or give a top-up on the value of existing entitlements for persons who suffer from a "specific disadvantage". Support for such categories can only be considered once the two mandatory categories of young farmer and new entrant have been catered for. Decisions regarding the eligibility of farmers under the specific disadvantage category of the national reserve require the approval of the European Commission.

Following my Department’s consultation with the European Commission, the then Minister announced in March 2015 that the group commonly known as old young farmers, who established their holding between 1 January 2008 and 31 December 2009, and who, due to the timeframe of setting up their holding, did not benefit from either the installation aid or the young farmer category of the national reserve, could be considered as a "group suffering from specific disadvantage". Following approval by the European Commission, this group was eligible to apply under the national reserve measure of the 2015 basic payment scheme. Some 280 applicants were successful under the old young farmer category of the 2015 national reserve. Therefore the old young farmer group has already been catered for under the 2015 national reserve.

Additional information not given on the floor of the House

The group commonly known as the forgotten farmer group comprises farmers aged under 40 who established their holdings prior to 2008 and who hold no entitlements or low value entitlements. Preliminary analysis carried out by my Department shows there are 3,900 farmers in this category. An estimation of the cost of increasing the value of existing entitlements to the national average for these 3,900 farmers stands at in excess of €12 million. A Programme for a Partnership Government contains a commitment to further pursue the category of forgotten farmers at EU level.

In 2015, the national reserve fund was based on a 3% cut to the basic payment scheme financial ceiling and provided €24 million in funding which was the maximum financing rate available under the relevant EU regulations. There was no national reserve in 2016 as all available funding had been utilised under the 2015 scheme. To provide for a national reserve in 2017, funding is required to replenish the reserve. EU regulations governing the scheme provide that funding for the replenishment of the national reserve may be obtained by means of surrender of entitlements that remain unused by farmers for two consecutive years and by clawback derived following the sale of entitlements without land. It is envisaged that funding derived from these two sources in 2017 will be very limited. The regulations also provide for the option of applying a linear cut to all farmers' entitlements to fund the national reserve. Decisions on the national reserve for 2017 will be considered once the position on potential funding has been established.

Consultation between departmental officials and the direct payments advisory committee, comprising members of the main farming organisations, agricultural education and farm advisory bodies, takes place annually as part of the decision-making process for the national reserve.

Martin Kenny (Sligo-Leitrim, Sinn Fein)
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The issue is not being dealt with. The Minister has set out the terms and conditions of it, but is there a reserve in place? Clearly, there is not and that is the issue we must discuss. A certain amount of money that will be unspent in various categories will come back to the Department and I cannot understand why there is a reluctance to put that to one side. If we are committed to the agriculture sector, we must look at getting new and young farmers in place who will have entitlements. At present, entitlements are not available to them. Will the Minister give a commitment to put the money to one side for the amount of entitlements that would be required? It is not a huge amount, given the number of people throughout the country who need to get this sorted. Will the Minister put that in place now to ensure either returning emigrants or people starting out in farming can have a future? This is really about ensuring they have a future.

Michael Creed (Cork North West, Fine Gael)
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I have dealt with the returning emigrants and the group known as old young farmers. The specific group where we have a difficulty and on which we are trying to progress is the forgotten farmer. The Department estimates there are approximately 3,800 or 3,900 such farmers. The issue here, and the Deputy hit the nail on the head, is that there is no reserve at present. Entitlements flow into the reserve in a couple of ways. Clawback on leases and unused entitlements for two years go into the reserve. At present, there is practically nil in the reserve fund.

There is another option available to put entitlements into the reserve and perhaps the Deputy will give his views on it. It is to top slice everybody's payment. In 2016, for understandable reasons given that it was a very difficult year, all farming organisations, with the exception of Macra na Feirme, said it could not happen. The Deputy might indicate his support for top slicing or cutting everybody's application by 2%, 3% or the required amount to give to applicants under the categories should the forgotten farmers be eligible, and there is an issue with getting that category of disadvantaged farmers over the line in respect of European Commission approval. However, if we get them over the line, the question is how we create an entitlement. I cannot just divvy out the little that might be available. I am obliged under the regulations to give them the equivalent of the national average. That can only realistically be done by top slicing. Perhaps the Deputy might indicate his support for that.

Martin Kenny (Sligo-Leitrim, Sinn Fein)
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That is fair enough. We understand that and that it has been a difficult year for farmers. However, rather than top slicing everybody, my suggestion, which I believe would be acceptable to most people, is that we consider the top end. For example, almost 300 farmers in the country receive in excess of €100,000. If the Minister were to top slice them by 5% or 6%, it would create a pool of money amounting to €2 million to €3 million. Approximately 2,000 farmers receive more than €50,000. If the Minister were to top slice them by 2%, it would create approximately €3 million. That is the small amount of money required for this. Perhaps Members across the House should consider it. I do not believe it is something that the vast majority of Members or, indeed, the vast majority of people in the farming organisations could oppose. We are talking about taking it from the very top and putting it into the bottom where it is needed. I believe we should try to find a consensus on doing something of that nature. It will not take a great deal of money. All it requires is the will and the agreement. Of course, there will be pressure from the farming organisations who will be looking after the guys at the top, but we must look after the people who are starting off. They are the future, and this is about creating something for the future.

Michael Creed (Cork North West, Fine Gael)
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I will give a quick summation of the mathematics involved. The Deputy has offered a suggestion for €5 million. The cost of dealing with the 3,900 farmers, as estimated by the Department, is €12 million, so there is €7 million to find. We are still not making enough from the Deputy's proposal, which is targeting some but not all.

Martin Kenny (Sligo-Leitrim, Sinn Fein)
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My calculation is on the back of an envelope, but it must be assessed.

Michael Creed (Cork North West, Fine Gael)
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To be fair, I cannot proceed on the basis of the back of an envelope, nor can I proceed in breach of EU regulations.

The first hurdle I have to clear, and I do not want to underestimate the challenge we face, is to get EU approval to include this category. If we secure them as an approved category, eligible to draw from the reserve, we have to consider how we would create a reserve that would be able to meet the requirements to give all eligible applicants the benefit of a national average payment from the reserve. They are not easy challenges to overcome but the first one that must be cleared is the one at EU level.