John Browne (Wexford, Fianna Fail)

I thank Senator Bannon for raising this important issue and giving me an opportunity to outline to the House the present state of negotiations at EU level.

From the outset, the Irish position on the draft regulation in regard to forestry has been clear. We have continually and consistently made known our opposition to the Commission's proposals in regard to the planting grants, premiums and associated premium payment periods. The original proposal was to reduce the planting grant from one which covered 100% of costs to a standard rate of just 40%; to reduce the maximum premium from €725 per hectare in the case of farmers to just €500, and from €184 to €150 in the case of non-farmers; and to reduce the maximum premium payment period from 20 years to ten years. This would have a negative effect on Irish forestry and we made that point consistently at every level and at every forum. Very early on in the process, I established a forestry liaison group to bring together all elements of the sector to seek their advice on different aspects of the proposal and to ensure that the stakeholders would be kept informed at every stage of the negotiations. I would like to pay tribute to the work of that group and to the positive contribution it has made both here and in Brussels towards furthering the Irish case.

Subsequent redrafts of the regulation have yielded some improvement in so far as forestry is concerned. As the Senator outlined, the grant has increased to 50%, and to 60% in less favoured areas, while the premium payment period has been increased to 15 years. However, this is still far from being an adequate set of proposals and we continue to campaign for further improvements. As recently as 31 May, the Minister, Deputy Coughlan, and I put the Irish case to the Commission and the Presidency at a special trilateral in Brussels, convened on the margins of the Agriculture Council. We pointed to the low level of forest cover in Ireland compared to the rest of the EU — 10% in Ireland and an average of 35% across the EU. We also pointed to the crucial role played by forestry in this country, and the role it would play in future in underpinning the viability of rural communities. Some 16,000 jobs are dependent on forestry and, in addition, some 14,000 farmers have now invested in forestry. Forestry is essential if we are to meet our commitments under Kyoto and provide a basis for a real home-grown alternative to fossil fuels.

This year, the Government allocated €124 million to the forestry sector, the biggest financial package ever put together for the sector. We also secured a major concession in the negotiations on the reform of the CAP whereby farmers can now plant up to 50% of their holdings, while still drawing down the full single payment entitlement. I believe that farmers are now ready to invest their land in forestry. However, we must ensure that whatever package of supports is introduced post-2006 remains focused on encouraging the long-term involvement of farmers.

Negotiations on the Commission proposals are continuing within the Agriculture Council. As they progress, I will be pressing for the best possible outcome for Ireland on the package as a whole, including a satisfactory outcome on forestry issues. The Commission and Presidency have indicated they will present a revised text for consideration at the Agriculture Council which begins on Monday, 20 June, and which the Minister, Deputy Coughlan, and I will attend.

I assure the Senator and this House that we will continue to work at all levels to achieve the best possible deal for Ireland in the tough negotiations that lie ahead.