Trevor Sargent (Dublin North, Green Party)

I hear what the Senators are saying, but I am saying something else and I hope they will listen to me.

As the Minister, Deputy Smith, made clear on a number of occasions, the strategy we employed was to protect those measures which will ensure the future development of a productive and competitive agriculture, fisheries and food sector. Therefore, in making his decisions for 2009, the Minister, Deputy Smith, sought to ensure funding for those schemes which have been identified as priorities for the sector in the long term.

Notwithstanding that spending had, by necessity, to be prioritised, the reality is that €3.2 billion of public funds, as Senator Carty said, will be spent in 2009 in supporting the sector. This demonstrates again the Government's recognition of the importance of the agriculture, fisheries and food sector to the economy.

It is also clear from the expenditure Estimates that the schemes allowing the sector to meet emerging demands have been protected. For example, a record level of funding of €355 million has been provided for the rural environment protection scheme. This amount allows the increase of 17% in rates announced by the Minister, Deputy Smith, to be paid and will bring the total amount spent on the scheme since 2000 to €2.5 billion. Through successive REP schemes, my Department is contributing to the reduction of greenhouse gas emissions by promoting specific measures, including willow plantations, establishment of farm woodlands and the protection of the carbon storage potential of Ireland's wetlands. This matter was debated at a meeting of a committee earlier, a debate to which some Members may have listened or in which some may have participated.

Organic farming, a particular interest of mine, which is less energy intensive than non-organic methods because of the non-use of nitrogenous fertiliser and other agrichemicals, is supported by REPS and the ongoing conversion grant supports. Organic farming further advances the battle against climate change, which was discussed at that committee meeting, as well as taking advantage of new and emerging market opportunities. There has been an 82% growth in organic purchases during the past two years, an area with huge potential for growth.

In addition, forestry will also play a major role in combating the urgent issue of climate change. There is an increase of 6% per cent in the forestry provision, bringing funding up to almost €128 million while €118 million is being provided for fisheries.

The commitment, entered into in partnership by the Government and the farm organisations, to provide €250 million over a five-year period for the suckler cow welfare scheme is being honoured in full. This is a new stream of farm income and the first year's payment of €77 million to approximately 54,000 farmers will be made in the next few months. There will, however, be an impact on the level of premium in future years due to the exceptional level of participation in the scheme. The limited amount of funding means that it must be spread proportionately.

My Department is also funding the most ambitious and generous on-farm investment scheme in the history of the State, through which €615 million of taxpayers' money is provided for the farm waste management scheme between last year and next year. This year alone, my Department will pay €377 million in grant-aid to thousands of farmers. This includes an exceptional Supplementary Estimate of €195 million for my Department, as an indication of the Government's commitment to the sector and to ensure that thousands of Irish farmers receive this grant promptly. Again, this is a measure that protects the productive capacity of the sector.

For reasons I have outlined, we had to restrict expenditure in certain areas. We still managed to provide €57 million for the young farmers installation aid scheme and the early retirement scheme for farmers. This allows us to meet current commitments but, unfortunately, we had to temporarily suspend — I hope that word means what is stated in the dictionary — new applications for both schemes. As the Minister, Deputy Smith, pointed out, this will be kept under review in the context of the budgetary situation.

There were a number of positive measures for young farmers in the budget. Most important, stamp duty relief for young trained farmers was renewed for four years until 31 December 2012. This means that, in combination with capital acquisitions tax — agricultural relief — and capital gains tax — retirement relief — the vast majority of early farm transfers are exempt from tax. This helps to reduce significantly the cost of early farm transfer. In addition to these measures, stamp duty relief for farm consolidation was extended for two years from 1 July 2009 to 31 June 2011. Both the general and young trained farmers' rates of stock relief were renewed for two years and the accelerated capital allowance for necessary farm pollution control facilities was extended in the budget from 31 December 2008 to 31 December 2010.

When combined the renewed agricultural tax reliefs in the budget are estimated to be worth more than €65 million to the farming community. Furthermore, the top rate of stamp duty on agricultural land transactions was reduced from 9% to 6% on amounts in excess of €80,000 with effect from 15 October. This should make agricultural land more affordable and encourage a higher number of transactions.

We have provided more than €220 million for the 2009 disadvantaged areas scheme. Unfortunately, this represents a reduction in expenditure under the scheme for 2009. We are effecting this reduction by limiting the maximum area to 34 hectares, 84 acres, and by a small increase in the minimum stocking density requirement. This means that almost 67,000 of the 102,000 participating farmers will not suffer any reduction in their payments. Furthermore, all claimants under the scheme will continue to benefit from the substantial increase of 8% in the rate of aid introduced by the Government in 2007.

In addition, of the 102,500 farmers who benefit under the disadvantaged areas scheme, in excess of 50,000 of these also benefit under REPS, while in excess of 47,000 also benefit under the suckler welfare scheme, which as I said introduces a new stream of payments to farmers in 2008. In addition to the payments under these schemes, payments to farmers with disadvantaged area lands under the single payment scheme amount to a further €920 million. The total amount payable therefore represents very substantial payment to farmers situated in the designated areas. Notwithstanding the reduced provision, the reality is that the disadvantaged areas scheme continues to be one of the best funded schemes of its type in the European Union.

Since the publication of the budget, some comments have been made which seek to misrepresent the factual position on expenditure by the Government on the agricultural sector. I wish to use the opportunity this evening to clarify some of these matters. It has been suggested that the sector has borne a disproportionate reduction, but the facts do not bear that out. I accept that at first glance, based on the figures that appeared in the budget documentation, it appears that the Department will experience cuts of 13% in spending in 2009. However, the figure given for 2008 includes, as I mentioned, an additional one-off allocation of €195 million to what was originally allocated for the Department in 2008. When this figure is correctly removed from the mix, the 13% cut being reported widely is in the order of 2.5%, which is in line with reductions in other Departments, and to suggest otherwise is just not honest.

When account is taken of EU funding, a total of €3.2 billion will be spent by the Department of Agriculture, Fisheries and Food in support of the agriculture, fisheries, food and forestry sectors. By anyone's standards, that is a very substantial commitment by the Government and the EU to the Irish agrifood sector for the coming year in the face of a very serious global economic downturn.

The long-term prospects for agricultural commodities on world markets are good at this time. In this House and the other House, we regularly talk about the need for the market to drive growth in the sector. Now, perhaps more than ever, we have an opportunity to play to our strengths, particularly in quality foods such as grass-based beef and dairy production. Global demand for both is forecasted to double in the next 40 years. It is imperative that Ireland makes every effort to develop at the premium end of such markets. As I said, the Minister, Deputy Smith, is in the United States of America working with Enterprise Ireland and Bord Bia to maximise our export markets for the future.

While prudent fiscal decisions needed to be taken in recent times, I am confident, as is the Minister, Deputy Smith, that farmers and the wider rural community are willing to play their part in accepting certain revisions in spending, which will allow the economy to come through this extremely difficult period. Agriculture and the food sector represent one of the most important indigenous elements of our economy. Its long-term success is due primarily to its exceptional resilience and adaptability when it comes to facing challenges. The Minister, Deputy Smith, and I look forward to working constructively with all stakeholders to achieve the best possible outcome for them and the economy as a whole.