Michael Comiskey (Fine Gael) | Oireachtas source

I welcome the Minister to the House and I thank him for his usual generosity, which he has always shown, in being amenable to come to the House. I appreciate that after every stage of the negotiation process leading to the reformed Common Agricultural Policy, the Minister has kept Senators updated on the process. I know that the negotiation process was a long procedure, with the added element of having to wait for the EU budget to be decided upon first. I understand that more than 40 discussions took place between the Council, the Commission and the European Parliament before political agreement was reached. I realise the Minister and his Department invested considerable amounts of time and resources before and during the term of the Irish Presidency. These efforts have resulted in a fairer agreement that will provide certainty and security for farmers up to 2020.

The CAP has always coupled a system of direct payments with rules governing rural development policies aimed at improving the environment and the countryside. These policies have improved the quality of life in rural areas and encouraged diversification of the rural economy. The new agreement will continue to build upon these principles while modernising their application. The new Common Agricultural Policy allows for unprecedented flexibility for member states in implementing the provisions. This is a positive development and will allow member states to tailor the policy to the particular needs of their country or regions. In an expanding and changing European Union this is a welcome decision. The new programme will set a basis of continued growth of the agriculture, forestry and fishing sectors. This is especially important since research has shown that investment in agriculture produces far greater returns than investment in other sectors. This is because agriculture sources 71% of raw materials and services from Irish suppliers, compared to 44% for all other manufacturing sectors. The potential spin-off effects for communities from agriculture is positive and we can see this in our towns and villages. When farmers have money, they spend it locally and this makes a major difference to the towns and villages in rural Ireland.

The Minister outlined how the single payment scheme is moving from a single model to a basic one, resulting in a redistribution of funds between farmers. This will be of benefit to farmers in all sectors of the industry. The direct payment scheme has allowed many to remain on the land at a time when emigration and urbanisation are becoming the norm. I believe these changes will continue to support our producers. The phased introduction of these changes is fair and avoids a sudden shock to the payment system. This new model also opens up the system of entitlements to many who were previously ineligible and this will assist in maintaining growth in the sector.

A particular focus of the reformed programme has been on encouraging new and young entrants to farming. This will be a challenge for the sector, as demonstrated by the Central Statistics Office data highlighted by the Minister this week showing that the average age of farmers rose from 50 to 54 years between 2000 and 2010. Considering the importance of farming to the Irish economy, this trend is rather concerning.

Both Pillars have included specific programmes for young farmers and provided top-up payments. A percentage of the funds have been allocated to this demographic and I am pleased that Ireland has committed to the full allowable amount for 2015. I welcome the fact that the allocation of these payments is linked to the success of applicants in completing a recognised educational course in agriculture. Like all industries, the future success and sustainability of agriculture will be driven by improved technologies and methods of production. Worldwide consumers are demanding higher standards of quality and traceability in food production. Agriculture is a vast industry and just as we can boast of a well-educated workforce in the technological and pharmaceutical industries, Ireland must have high levels of knowledge within the agriculture sector all the way down to farm level.

The new programme contains key measures aimed at supporting and encouraging the transfer of knowledge and promoting innovation in the sector. By the application of these new methods of production and the sharing of knowledge we can improve the quality of farming, reduce disease, increase competitiveness and make farming more sustainable. The incentives for on-farm capital investment contained in both pillars will be important in driving the industry forward and some of the funds allocated for this will be ring-fenced for young farmers establishing a holding for themselves. These incentives compare favourably to capital investment schemes available for entrepreneurs in other sectors of the economy and will ensure that the agriculture sector is a desirable option for people to build a business in.

Budget 2014 included an adjustment to capital gains tax making it more attractive for farmers to transfer land to younger farmers. Coupled with the measures included in CAP schemes, this will be important in seeking a reverse of the age trends in the sector.

Following last week's announcement in respect of Pillar 2, I welcome the level of investment in the rural development scheme and the allocation of €1.9 billion in funds from the Exchequer, especially at a time when demand is rather high on resources. It is a significant achievement. This level of funding coupled with €2.2 billion of EU funds is an acknowledgement of the importance of the sector to the Irish economy and demonstrates a commitment by the Government to improving the competitiveness of the agriculture sector. This will also be used to encourage a diversification of industry in rural areas, which is vital in maintaining rural communities.

I know the Minister is involved in a consultation process with various stakeholders before the finalisation of the programme. The willingness of the Minister to engage in a broad consultation process will ensure that economic recovery is felt throughout rural as well as urban areas. Two thirds of Irish farmers are classified as rural. Therefore, it is important that effective measures targeted at the needs of farms are put in place.

The fundamental principle of schemes under Pillar 2 are voluntary and therefore payments must be maintained at a level which is attractive to farmers given the commitments which they undertake to fulfil and the costs associated with doing so. I believe the new environment scheme, GLAS, included in Pillar 2 will be an attractive measure for farmers. There are many benefits which can be gained from participation in this agri-environmental scheme which can lead to better farm practices and a better quality of life. It is through participation that a greater appreciation of biodiversity and wildlife can be developed resulting in a better environment for all. I welcome the continued support for disadvantaged areas with payments again amounting to €195 million per year for the length of the programme. I understand a minimum of 5% must be spent on Leader programmes. I call on the Minister to outline whether a timeframe has been established for making this funding available. Leader companies have been at the forefront of supporting employment, entrepreneurs and community groups to establish businesses and services in rural areas. Continued support for the Leader programme and employment in rural areas is vital to maintain rural populations.

I thank the Minister for coming to the House this afternoon. The reform programme will build upon previous programmes and its implementation will be important as we continue to achieve our Harvest 2020 targets, and to seek to attain the critical mass of Irish products in key international markets. I would like to acknowledge the work that the Minister and his Department have put in place in developing the programme, and I look forward to further details about Pillar 2 in the coming weeks.