Tony Killeen (Clare, Fianna Fail)

I thank all Members who participated in the debate, particularly those who were positive in what is a difficult time for farmers, as it is important to send a positive message. Many Members who considered this topic in considerable detail noted there were good reasons to be positive in the medium to long term. Senator Bradford dealt with commodity prices, as did virtually every other speaker, and with concerns relating to CAP reform post-2012. As for the carbon tax, in common with virtually everyone else who mentioned it, he considered the concept to be positive but had concerns about the additional burden in respect of agrifuel costs. He also acknowledged the positive role of REPS.

Senator Carty mentioned several issues, including one important subject, namely, the role of the banks which surprisingly was not dealt with by many speakers. One must acknowledge the positive impact of the guarantee scheme in September 2008 and subsequently the NAMA legislation and the investment in the banks by the Government. I was interested this morning to hear the Taoiseach being questioned about its cost by a party which had advocated nationalisation of the banks at several times the cost of the strategy that has been adopted. Certainly, Senator Carty is correct in that there have been enormous difficulties with the banking sector, most of which arose from the difficulties facing the sector. This issue has been addressed by the Government and will gradually show positive results.

Senator Prendergast mentioned the floods, as did most Members, as well as the negative impact on farmers of bad weather over virtually three seasons. She also mentioned, in respect of commodities, the glut of cattle and the difficulty with cattle prices. A theme across the entire debate in the Seanad has been the impact of low commodity prices at a time when there are other difficulties also. However, I considered the Senator's contribution to be extraordinarily negative, as this is not what farmers need to hear from either the Government or the political classes. Having attended Council of Ministers meetings across seven or eight directorates in the four Departments in which I have served, I have been enormously impressed by the grasp of the Minister for Agriculture, Fisheries and Food, Deputy Smith, of the issues involved, as well as his capacity to put across forcefully the Irish viewpoint. In the last year or so he has convinced doubting fellow Ministers that market interventions are possible in milk price supports and other areas. He has put in a massive performance as a Minister at European level. For instance, his handling of the pork dioxin scare this time last year had an extraordinarily positive result because had it gone badly, it would have threatened the entire basis of our exports. I also have seen him engage in the battle on budgetary discussions and his commitment to agriculture and the outcomes he has achieved have been highly positive. Senator Prendergast also mentioned the potential of the agriculture and food industries, on which we must work together to try to promote.

Senator O'Brien commended the Minister on early payments and drew attention to some policy successes. Senator John Paul Phelan also mentioned milk prices and the loss of the construction sector as a contributor to incomes in rural Ireland. One point that interests me when I come into the Seanad is that I sometimes hear Members saying things that reflect what is being said on the ground but which are the exact opposite of what their party spokespersons are saying in the Dáil. He also mentioned difficulties in electronic sheep tagging. The agreed European scheme has been introduced in the vast majority of other countries and only Hungary, the Czech Republic, Slovakia and Ireland continue to be opposed to it. Despite the success of our 13-digit system, the 12-digit system is in operation in Europe and will come into force here.

Senator de Búrca referred to the role of climate change and the fact that we need to address it in its entirety and not just pick the pieces which suit us. She also paid tribute to the Minister of State, Deputy Sargent, for his work in the organic sector. I mirror that tribute because having worked closely with him over the past year and a half, the new thinking he has introduced has been very positive. He has the advantage of being in the Department a year longer than the Minister, Deputy Smith, and myself. New thinking, such as the hemp industry to which Senator de Búrca referred, is very positive.

Senator Doherty mentioned the report done by his colleague, Deputy Morgan, and the Joint Committee on Enterprise, Trade and Employment, something I look forward to seeing. His approach regarding employment was generally positive and he had an optimism for the future, notwithstanding worries we sometimes have about CAP, the WTO and so on. The value to local economies is something we need to remember.

The Senator also mentioned aquaculture. I do not want to use time here now because I will have an opportunity to speak on a fisheries debate in the not too distant future. However, there are considerations to be taken into account regarding Natura 2000 sites and the December 2007 European Court of Justice judgment which impacts on that.

Senator Ned O'Sullivan encapsulated the Irish farm when he referred to resilience, courage, optimism and endeavour. That is one reason we need to be and can afford to be optimistic. He and a number of other speakers mentioned multinational companies in the retail sector, something with which the Minister, Deputy Smith, has been dealing very strongly. The Department of Enterprise, Trade and Employment, led by the Tánaiste, has also been trying to address the issue. The sterling differential, which the Senator also mentioned, has posed particular problems.

Senator Joe O'Reilly also had confidence in the long term, which I welcome, particularly in regard to the 2020 strategy. He juxtaposed that against the current hardship in the area, which is something we are all trying to deal with, with some success. He asked about Irish-controlled beef factories in United Kingdom. The Minister, Deputy Smith, has taken a very proactive role in that regard. There are complications and other dimensions which do not lead to an easy resolution of the issue.

On the various REP schemes, it is important to remember that they were always intended to be environmental schemes. In some instances, there were very substantial costs to farmers and they were never intended as an income supplement. Arguments in favour of REPS tend to founder on that misconception. Senator Nicky McFadden mentioned the impact of flooding and the loss of feedstuff. It brings home the threats facing people. She was concerned that €2 million may not be sufficient to address the problem. I assure the House it is a matter which will be kept under review. Senator Mary White outlined the expert value of the sector, which is very positive. I assure the House REPS is not closed and the current schemes ensure it will continue until at least 2014. The new scheme, which the Minister will introduce during 2010, will ensure it continues beyond that date.

Senator Paddy Burke outlined the importance of agriculture and the crisis in commodity prices, in particular in beef and milk. He attributed it in part to a marketing deficit. We also need to remember that the economic downturn is not confined to Ireland and has a particular impact on some of the markets to which we traditionally export some of our goods, which do not have the level of demand and consumption they previously had. He also discussed the role of education and agricultural colleges. We all acknowledge that education has a particularly potent and positive role in regard to agriculture. All kinds of new methods are being developed and everything is not done the traditional way. The Senator, like a number of other speakers, mentioned the importation of vegetables and other food products and how we need to try to counter that.

It is fair to say that the last two years and this year in particular have been very difficult for farmers. However, while the medium-term outlook is for an improvement in market conditions for our core products, many farmers are facing immediate cash flow problems. Therefore, the Supplementary Estimate which was brought forward by the Minister, Deputy Smith, is of particular value. As the Minister of State, Deputy Sargent, said earlier, there is no additional Exchequer funding involved but it comes from savings and additional EU receipts arising in the Department. The effects of a cash injection of €120 million to the primary farming sector through the rural environment protection scheme and the bringing forward of payments due in 2010 under the farm waste management scheme have to have a significant beneficial effect on farmers' cash flow.

We all acknowledge that the recent flooding has damaged fodder and caused a resulting feed shortage problem on some livestock farms. This has given rise to financial hardship and to potential animal welfare issues . In response to this situation, a fodder aid scheme has been introduced to provide some financial support towards the purchase of alternative feed material to replace the fodder damaged by flooding. Applications were available to affected farmers from early last week and it is hoped that payments to farmers will be issued shortly. The Supplementary Estimate, while is totally unrelated to the flooding issue, will at the same time provide some increased cash flow in the short term for some of the farmers affected by the flooding and other difficulties.

One of the issues is the closure of the REP scheme to new applicants. The scheme was very successful with more than €2 billion being paid to Irish farmers since it was introduced in 1994. However, there was no option but to close REPS to new applications in July. The decision was taken against the background of the situation in the public finances, the resources available to the Department and the substantial and continuing growth in the number of REPS participants.

Despite the closure of the scheme, payments due to REPS farmers for 2009 and 2010 will be the highest ever. Almost 17,000 applications were received up to the closing date of 15 May 2009, and it is safe to assume they include the great majority of those whose REPS 3 contracts are ending this year. These applications are now being processed with a view to getting payments out as soon as possible. More than 1,600 extra applications came in between 16 May and 9 July, the date the scheme closed, and these will be processed as applications for 2010. All REPS contracts will run their full course. This means that farmers will be receiving payments in REPS right up to 2014.

The Department will continue to support farmers to improve the environment. It is planned to introduce a new agri-environment scheme in 2010 which will reduce compliance costs to participants and provide a menu of targeted actions from which farmers may choose. Funding for the new scheme will include the additional modulation funds which the Minister, Deputy Smith, ensured would be retained for the benefit of Irish farmers in the negotiations on the CAP health check. It will also include additional matching Exchequer funding. It is hoped to secure agreement for this new scheme soon. Subject to the state of the public finances, the aim is to introduce a scheme which will be available to as many as possible of those who will finish their existing REPS contracts in 2010 and 2011.

However, the longer-term viability of the agrifood industry can only be achieved by improving competitiveness, identifying market opportunities outside the UK and developing strategies for coping with volatility, especially in the dairy sector. Unlocking innovation potential will be key to the industry's next phase of development. This will need to be a team effort. The Department and development agencies have supported investment, marketing and research measures specifically directed to support the development of the food and drinks industry. More than €180 million in investment aid has been awarded to improve efficiencies and add value under the dairy, beef and sheepmeat investment funds which are operated by Enterprise Ireland on behalf of the Department.

In terms of smaller businesses, grant aid of €16.7 million was awarded in December 2008 for marketing and processing investment by 66 small meat establishments, marts and horticulture enterprises. This is expected to contribute to investment of €70 million and will assist the businesses involved to improve efficiency, add quality and value, produce innovative products and develop new markets. While money is extremely tight, sometimes even a modest amount can leverage a fine result. In the marketing area, an additional €2.5 million was provided to Bord Bia earlier this year to identify market opportunities within the European Union and work with the industry on developing new products. This has stimulated new initiatives to deliver market gains, including the UCD Michael Smurfit Graduate Business School and Bord Bia fellowships, which are placing 25 highly qualified graduates to work in export markets on developing opportunities meeting specific company needs.

Responsibility for fish marketing was transferred to Bord Bia in June to enable seafood companies benefit from the expertise of a dedicated food marketing agency. European Union co-funding of €235,000 over three years has been made available to Bord Bia to develop sales of quality assured European Union pork, offal and beef products in Asian markets.

Senators can readily see that every effort is being made to develop an agrifood industry that is sustainable and capable of developing further in the future. The Agri Vision 2020 strategy, when finalised, will act as a roadmap for the future development of the industry. This will only be achieved by all sides of the industry working together and with the support of the Department. My ministerial colleagues and I are fully committed to working with and supporting the industry through this difficult period.