Charlie McConalogue (Donegal, Fianna Fail)
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3. To ask the Minister for Agriculture, Food and the Marine if he will consider introducing a €200 annual payment for suckler cows to ensure the sustainability of the national herd; if he will reallocate unspent funds under the rural development programme for this purpose; and if he will make a statement on the matter. [5065/17]

Charlie McConalogue (Donegal, Fianna Fail)
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Will the Minister consider introducing a €200 annual payment for suckler cows to sustain the national herd and if he will reallocate unspent funds under the rural development programme for this purpose?

Michael Creed (Cork North West, Fine Gael)
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The introduction of a specific coupled payment for suckler cows from pillar 1 funding would involve a redistribution of funds allocated to farmers under pillar 1. This would necessitate a linear cut across payment to all basic payment scheme beneficiaries.  The annual cost of such a measure would exceed €200 million.

Ireland has supported the greater market orientation of the CAP over recent reforms, including the decoupling of payments from production. This has provided farmers a measure of income stability from the basic payments scheme while allowing them to adjust production in response to  market demand.

The beef data and genomics programme is the current main support to the suckler sector and provides farmers with some €300 million of funding over the next six  years. The programme builds on the substantial investment in data recording and genomics which has been made in recent years and will continue to drive further developments and improvements in this area.

The programme was agreed with the European Commission as part of Ireland’s rural development plan for 2014 to 2020 alongside a number of other schemes such as areas of natural constraints scheme, GLAS and TAMS, which also benefit suckler farmers. I am conscious of the positive effect that the programme is having on the Irish suckler herd. It will help to improve productivity, profitability and carbon efficiency in the national herd.

The programme provides support to enable suckler farmers to improve efficiency and profitability by improving the overall genetic merit of their beef herd. I firmly believe that the scheme will deliver tangible long-term and cumulative positive effects for both suckler farmers participating in the scheme and for farmers who buy the progeny of suckler cows for further finishing. It is also a significant contributor to Ireland’s well-established reputation as a producer of sustainable, high-quality beef.

4 o’clock

On a possible re-opening of the scheme, this is being considered in the context of an assessment of budgetary priorities, the operation of the rural development programme and the potential impact on the scheme and other schemes. It should also be noted that support under rural development programme schemes can only be provided on the basis of costs incurred or income forgone.  Even if it were possible to reallocate resources from within the programme, any increase in the level of payment to participants in the beef data and genomics programme would require the Department to submit an amendment of the rural development programme to the European Commission and an evaluation and approval by the relevant directorates general.

Additional information not given on the floor of the House

Even if a revised scheme were approved, any increase in the level of payment would inevitably result in additional actions being required to be carried out by farmers.

The Department will continue to keep expenditure under the rural development programme under review on an ongoing basis. As with all such programmes, there are inevitably issues of timing around the scheduling of payments.  Savings in one year do not necessarily imply savings over the lifetime of the programme.

The provision of support for the suckler sector is critically important.  The range of supports as currently configured represents a balance between direct income support for the sector and rural development measures designed to improve its competitiveness and sustainability. It is entirely appropriate to maintain this balance of developmental and income supports into the future.

Charlie McConalogue (Donegal, Fianna Fail)
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Rather than alluding to obstacles or setting out reasons precluding such measures, the Minister should recognise the importance of the beef industry and the pressure it is under. All politicians should work with the farming community to ensure supports are introduced to sustain the national suckler herd. The average income of the 64,000 farmers who produce calves from the suckler herd is €13,000. Unfortunately, they depend entirely on farm payments under the rural development programme and basic payment scheme.

The Minister referred to the beef data and genomics programme. The original commitment was to open the programme to 35,000 farmers but it was closed when the figure reached 23,000. Will the Minister indicate when the scheme will re-open?

Teagasc has indicated it costs between €4 and €4.50 to produce 1 kg of beef, yet farmers are being paid only €3.90 per kilogram. The beef sector is especially vulnerable to Brexit as 50% of the beef produced here is exported to the United Kingdom. It is crucial that the Minister show a willingness to introduce the supports required to sustain the suckler herd.

Michael Creed (Cork North West, Fine Gael)
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The Deputy calls for €200 million to be targeted at the beef sector. While I acknowledge the sector has had a difficult year, the Deputy comfortably avoided the issue of where this funding would be found. He indicated it should be allocated from the rural development programme. It must be borne in mind that we have expenditure lines that extend until the completion of the programme which means all available funding will be drawn down under current schemes. If the Deputy wants me to allocate €200 million from the programme to the beef sector, he must indicate from which scheme I should take this money. Should I take it from the green low-carbon agri-environment scheme, GLAS, or disadvantaged areas scheme? Should I abolish the sheep scheme?

If the Deputy is not suggesting I should allocate €200 million from the rural development programme and Pillar 2, he should state whether I should cut every farm payment under Pillar 1 to secure €200 million in savings to be reallocated to beef farmers. That is the uncomfortable choice that would have to be made.

A third choice, to provide Exchequer funding of €200 million, is a non-runner because of state aid rules. We do not have €200 million to spare in any case. If the Deputy asks for funding of €200 million, he must be specific about where it should come from. There is no plan to leave unspent moneys in the Common Agricultural Policy. While an underspend may arise in a given year, contractual obligations roll over. We are still making payments under the previous rural development programme, for example, under the early retirement and agri-environment options schemes. I have repeatedly made the point, although the Deputy does not appear to accept it, that schemes do not run precisely concurrently with the five year programme but contracts must be honoured over five years.

Charlie McConalogue (Donegal, Fianna Fail)
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It is time the Minister stopped bluffing farmers about the Government's approach to the rural development programme. I have stated on several occasions that the Department is significantly underspending the allocation for the rural development programme. As matters stand, the Department is on course to record an underspend of €400 million in GLAS by the end of 2020. That figure is based on information provided by the Minister in a written answer. If he does the maths, he will see it is correct.

I outlined the reasons for re-opening the current beef data and genomics programme. The Minister gave a commitment that the scheme would be open for 35,000 farmers, yet it closed when 23,000 farmers had joined. There has also been a major underspend in that programme, which could be re-opened tomorrow if the Minister was willing to do so.

We have to recognise the pressure the suckler herd is under and ensure we are prepared for the challenge presented by Brexit. We must also ensure export markets, specifically for live exports, are re-opened, and we need to reduce administrative costs, specifically the €8 administrative cost of exporting a calf. It is also crucial that the Department provide additional support in the form of a suckler payment of €200. Otherwise, we will no longer have a suckler herd, on which many farmers depend, in a few years from now.

Michael Creed (Cork North West, Fine Gael)
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I note the Deputy failed to address the issue I raised. If he calls for something of this nature, he must be specific. He referred to a figure of €200 million. He must indicate whether this money should be taken from the disadvantaged areas scheme or GLAS.

Charlie McConalogue (Donegal, Fianna Fail)
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I was specific. I pointed out the significant underspend in the rural development programme.

Andrew Doyle (Wicklow, Fine Gael)
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The Deputy is well aware that there is no significant underspend in the programme. It is in the same position as all previous rural development programmes, as the Deputy would know if had been around for a little longer.

Michael Creed (Cork North West, Fine Gael)
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The European Union has indicated that Ireland's drawdown of rural development programme spending is way ahead of that of all other member states.

Charlie McConalogue (Donegal, Fianna Fail)
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The Minister is way behind on his domestic commitments. He has not lived up to his promises and he should acknowledge that.

Seán Ó Fearghaíl (Kildare South, Ceann Comhairle)
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Please allow the Minister to answer the question.

Michael Creed (Cork North West, Fine Gael)
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The Deputy conveniently ignores that in recent days we re-opened GLAS to bring numbers up to more than 50,000. We are committed to examining the beef data and genomics programme to identify any scope we may have in that regard. However, we are constrained by the commitments we have made in other areas. The Deputy is not being honest with those who are listening to this debate.

Charlie McConalogue (Donegal, Fianna Fail)
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I have been crystal clear.

Michael Creed (Cork North West, Fine Gael)
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Where will he find the funding he seeks? If it is to come from the rural development programme, will it be taken from the disadvantaged areas scheme, the sheep scheme we are introducing or GLAS? He cannot have his cake and eat it.

Charlie McConalogue (Donegal, Fianna Fail)
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The Minister must live up to the commitments he and his predecessor made on rural development programme expenditure.