Liam Aylward (Carlow-Kilkenny, Fianna Fail)

A transitional period will be introduced but that is a separate matter with which I will deal in a moment. Agriculture and the agricultural food sector remains of key economic importance. We should not forget that the sector contributes more than 20% of net foreign earnings and accounts for 9% of GDP.

The Government's record on agriculture speaks for itself. We have led it through major crises such as BSE and the outbreak of foot and mouth disease. We also developed the best policy framework for its future, as I outlined in my opening address. We introduced the long-term development plan for agriculture through the agri-food 2010 plan, which is now being further reviewed under the chairmanship of the former Minister, Alan Dukes. In the past, long-term planning for agriculture was not a feature of Governments, which completely ignored the issue.

As well as the €1.3 billion in direct payments to farmers, which has been ring-fenced as a result of our role in the negotiations in the recent CAP mid-term review, we have provided significant financial contributions for improved schemes on farms. If Senator Browne followed the budget, he will have noted that the Department succeeded in obtaining significant increases in funding for the schemes to which he referred, foremost among them REPS, to which I will turn in a moment. Installation aid for younger farmers was also substantially increased.

Senator John Paul Phelan referred to a 2% decline in farm income in 2002. Aggregate farm income increased by almost 5% last year, a fact acknowledged by the farming organisations. Under the new arrangements, farmers will be able to enhance their incomes by concentrating on obtaining the best returns from the market under the new system. The sector has moved into a new era.

I will address some of the points raised by Senators, specifically several which threaded through the debate. While REPS has been very successful, Members will be aware from talking to constituents that draconian penalties were imposed under the scheme for slight misdemeanours and minor transgressions of the rules. We intend to reduce penalties, the number of on-farm visits and the level of planning input required. Farmers will no longer have to reapply every year as is currently the case and a menu of options will be available. We hope many more farmers will join REPS III.

Some Senators pointed out that the scheme had not received approval from Brussels. This is not the fault of the Department which lodged an application for approval some time ago. The normal internal procedure in the Commission for approving such schemes takes up to two months. The Department is in constant contact with the Commission and has received an assurance from Commissioner Fischler that no delays will occur. Furthermore, €216 million was allocated in the budget for the scheme. This increase of €70 million over the previous year speaks for itself.

Senator Callanan referred to biomass, biofuels, anaerobic digestives and other alternative uses of land. It is time to look at such areas, particularly in light of the Bacon report on forestry and the new REP scheme. There are improvements regarding the conditions of planting as the entitlement can be paid when 50% of a farmer's land has been planted. That will encourage many more people into forestry. We will also look at certain pilot projects but I will not expand on those now.

Most speakers referred to live exports. Last year almost 250,000 live animals were exported. When Fianna Fáil got back into Government in 1997, there were no live exports. They had completely stopped under the previous Administration. This week, however, we did everything possible in consultation with all the farming organisations to reach agreement on live exports under the Irish Presidency. We realise the importance of live exports to the economy, particularly as a result of the changes to the CAP under its mid-term review. The Minister for Agriculture and Food has made every effort to bring this to a conclusion. It was the German Minister for Agriculture, a member of the German Green Party, who insisted on an eight hour journey limit. We tried to come to a compromise, including the reduction of journey time sequences, which would have allowed trade to continue into the future. Positions on both sides were too extreme and there was no willingness to compromise. However, the status quo will remain and live exports will continue. We will hear much more about this as a result of the pressure brought to bear on other Agriculture Ministers by people like the German Agriculture Minister. It would have been better for everyone, including those in Irish agriculture, if the issue had been put to bed. So much for Fine Gael and its democratic alliance with the Green Party. When they stand together on the platform in Carlow-Kilkenny, I will be around to remind them of that issue.