Brendan Smith (Cavan-Monaghan, Fianna Fail)
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I welcome the opportunity to take part in this debate on agriculture which takes place on the eve of the European Union Agriculture Council at which we will finalise the Common Agricultural Policy, CAP, health check. Last week, Senators had the opportunity to discuss the recent budget. I thank my colleague, the Minister of State, Deputy Sargent, who took the debate in my absence in the United States on an important trade mission, as well as all Senators who contributed to that debate. I do not intend to cover the ground discussed last week other than to make some general comments about the budget and the 2009 Estimates and to refer briefly to some of the contributions to that debate.

I intend to set out the dynamic global environment within which the Irish agrifood sector is operating and the challenges and opportunities that lie ahead. There are several events on the horizon which have potentially significant consequences for Irish agriculture and the Irish agrifood sector. I will comment on those and give the House some sense of the approach we have taken to date to protect and promote Ireland's interests, reflecting the Government's support for the agrifood sector as the most important indigenous sector in the economy.

Without repeating what was said during last week's budget debate, I wish to make some general points on the budget, respond to some of the comments made by Senators and, in particular, correct some inaccuracies and misrepresentations. Despite the necessity for the Government to take decisive, corrective action in recognition of the rapidly deteriorating economic and fiscal situation, it is worth bearing in mind that we will spend €64 billion on public services in 2009. My Department will be allocated €1.8 billion of Irish taxpayers' money and €1.4 billion of European Union funding next year, bringing to €3.2 billion the Department's total expenditure in support of the agriculture, fisheries, food and forestry sectors in 2009.

However, the agriculture sector could not be exempted from the general necessity to reduce public spending. Despite persistent attempts to suggest otherwise, the reality is that my Department's budget for 2009 is 2.6% less than it was this year when account is properly taken of the exceptional Supplementary Estimate of €195 million we received this year to ensure thousands of farmers could be paid their farm waste management grants promptly. Contrary to certain suggestions, the farm waste management scheme is the most ambitious and generous on-farm capital investment scheme in the history of the State which, by 2009, will have seen well in excess of €600 million of taxpayers' money invested in thousands of Irish farms. The scheme is fully funded by the Exchequer.

I also refute suggestions that the suckler welfare scheme is being cut or, as I read in one prominent publication last week, that the commitment to the scheme is being reneged upon. This is blatantly untrue and inaccurate and a complete misrepresentation of the facts. A commitment was entered into under the social partnership process that €250 million would be provided in funding over five years. That commitment is being honoured in full. In regard to the budget, I have made clear that the decisions we took were difficult. I acknowledge the difficulties they will pose to farmers but I have made clear also that I intend to review those decisions as soon as the budgetary conditions permit. I reiterate that I will do so.

Over the next two days I will attend a meeting of EU Agriculture Ministers in Brussels during which efforts will be made to reach political conclusion on the CAP health check based on the draft legislative proposals published in May. Given that these proposals comprise a large and complex set of detailed measures, I will confine my remarks to some of the principal issues. In regard to milk quotas, which are due to end in 2015, the proposals provide for a smooth transition with a modest annual increase in quota for five years beginning in 2009-10. This proposal is somewhat conservative. As such, I have argued for a genuine soft landing with progressive quota increases which should be frontloaded to take account of our capacity to increase production.

I and my officials also have defended the need for quota increases to be matched with effective dairy market management mechanisms and have called for the continuation of such measures. We are especially anxious to retain effective measures for the support of the butter market and, in that regard, I welcome the decision taken last week to introduce private storage aid for butter with effect from 1 January 2009. This decision reflects my serious concerns regarding the current weakness in dairy product prices about which I have contacted the Commissioner for Agriculture and Rural Development, Ms Mariann Fischer Boel. The importance of retaining critical market instruments and using them effectively to respond to price volatility in the period of transition to quota abolition is a key priority for us during this week's negotiations.

Ireland has consistently opposed the proposed modulation increases on the grounds that they run counter to the expectations of Irish farmers who accepted decoupling only three years ago and who are still in the process of adapting to that fundamental change. Modulation is the process by which a proportion of each farmer's single farm payment is transferred to rural development in pillar two of the CAP. The current rate of compulsory modulation is 5%. Additional compulsory modulation is proposed to bring the rate to 13% by 2012, with further progressive rates of modulation of an additional 3% on payments in excess of €100,000, 6% on payments in excess of €200,000 and 9% on payments in excess of €300,000. We will continue to oppose the current proposals notwithstanding that, as they stand, in excess of 55,000 Irish farmers would be exempt from any modulation proposals.

I have always maintained that the issue of simplification should be a key focus of the health check and we have made several suggestions as to how this could be achieved. All Members share the desire for real and measurable simplification for farmers and the administration alike. As Ireland is fully decoupled, we would support further decoupling elsewhere, although I do not have any great difficulty with allowing member states some freedom to continue coupled schemes to support vulnerable areas or sectors provided this does not distort competition. While there are proposals to allow member states to move to a flatter rate of payment per hectare, I have consistently made clear that I have no plans to alter our system of single payments and while I am pleased that the option of moving to the flatter rate is available, I will strongly object to any move towards a mandatory change at this time.

The final issue in the context of the health check to which I will refer is the Article 68 proposals. The intention is to broaden the existing provision such that up to 10% of single payment funds may be targeted at specific measures by removing some restrictions and providing an enlarged menu of options for use of these funds. This represents a potential means of supporting regions or sectors facing particular challenges. I have sought an increase in available EU funding under this provision. As a result of the complex and restrictive rules governing the single farm payment scheme, we have been unable to utilise fully the funding allocated for it. Therefore, I am seeking greater national discretion in the use of these funds. This has been my consistent position since the proposals were published.

The CAP health check is part of the dynamic environment to which I referred at the outset and the negotiations over the coming days certainly will influence the direction of the Irish and EU agrifood sectors in the coming years. It is my firm intention to negotiate to achieve the best outcome for Irish agriculture and to achieve a deal that will secure its future growth potential.

Recent speculation, together with the G20 economic summit that took place in Washington at the weekend, have raised the possibility of a fresh World Trade Organisation, WTO, ministerial meeting being convened next month. The most recent effort at achieving agreement on the agriculture and non-agricultural market access, NAMA, modalities failed after the longest ministerial meeting in WTO history in Geneva in July.

It is evident that the WTO director general, Pascal Lamy, encouraged by various constituent members of the WTO, is enthusiastic about the prospects for agreement. We fail to see the basis for such optimism. There has been little or no progress on resolving the outstanding issues that ultimately resulted in the failure of the July negotiations. We further take the view that in the absence of any significant progress in these areas, there is little or no point in proceeding with a further ministerial meeting. We hold the view that another failed attempt at this stage could do nothing but damage the entire process.

We remain consistent in our position. We support a comprehensive, ambitious and balanced deal. The proposals on the table at the time of the collapse of the July ministerial meeting did not meet the requirements for such a deal. The Government remains committed to achieving an acceptable trade deal but does not believe that those conditions exist at the moment and, on that basis, does not accept that the conditions exist to warrant calling a ministerial meeting next month. In the event of a ministerial meeting taking place, the Irish Government team will continue to advocate and defend Irish interests and, at every opportunity, to highlight our real concerns relating to agriculture. My objective continues to be to ensure the best possible tariff protection for key Irish agricultural products — beef, dairy, sheepmeat and so forth.

I spoke recently about the issue of climate change and emphasised the Government's commitment to delivering Ireland's contribution towards the European Council target of a 20% reduction in the EU's greenhouse gas emissions by 2020. I pointed out that these targets present particular challenges for Irish agriculture. When reading last week's Seanad debate, I noted that a couple of the contributions, notably those of Senator O'Toole and Senator McFadden, referred to these challenges, but perhaps that is something for another debate on another day. However, I wish to comment on and correct something Senator McFadden said when she suggested that my colleague, the Minister for the Environment, Heritage and Local Government, Deputy John Gormley, "expects the agricultural sector to cull the dairy herd to reach these targets". At no point did the Minister, Deputy Gormley, make any such suggestion and, indeed, like me, he recognises the challenges presented to the agriculture sector.

The agriculture sector is already contributing to the reduction of carbon emissions and the Environmental Protection Agency's most recent figures on actual emission levels indicate that emissions from agriculture decreased by 3.8% in 2007 on the previous year's figures, continuing the downward trend since 1998. Through successive rural environment protection schemes, my Department is further contributing to the reduction of greenhouse gas emissions by promoting specific measures, including willow plantations, establishment of farm woodlands, the protection of the carbon storage potential of Ireland's wetlands and, in 2009, the provision of record funding of €355 million for REPS. Despite efforts to suggest that there are differences on the greenhouse emissions reduction issue, the Government, including Deputy Gormley and me, recognises the need to reduce our greenhouse gas emissions and that the scale of reductions will be very challenging for Ireland. Equally, though, we all accept that every sector will have to play its part in the national effort to reduce emissions.

This week's negotiations on the CAP health check will determine the shape of the CAP until 2013 while discussions on the post-2013 situation will take place in parallel with a wider discussion on the EU budget for the new financial perspective period 2014-20. Not only is there a continuing very strong case for an effective and well resourced EU Common Agricultural Policy, but the case is now stronger than ever. Ireland is a major food producing and exporting country, with agrifood and drink exports of approximately €8.6 billion last year. Gross agriculture output in 2007 was valued at €5.67 billion, with milk accounting for the largest share at 29% or €1.6 billion and beef accounting for 26% or €1.5 billion. Significantly, global demand for meat and milk is projected to more than double over the next 40 years and we now have a unique opportunity to play to our strengths. The future viability of the industry is heavily dependent on us growing our market share of lucrative continental outlets, given that we currently export 90% of our beef output and 80% of our dairy output.

The Irish agrifood sector is a vibrant, dynamic and resilient sector, capable of reacting and adapting quickly and positively to changing circumstances and the demands of a global market. The sector is one of the most important indigenous elements in the Irish economy, both from an employment point of view and as a major contributor to regional development. For what is sometimes referred to as a "declining" industry, the sector contributed up to 39% of net foreign earnings in the primary manufacturing sector, according to the recently published Riordan report.

Having unfortunately missed last week's debate, I am pleased to have the opportunity to partake in this debate and to set the scene, as I see it, for the Irish agrifood sector and to outline both the challenges and opportunities that confront the sector. It is true that I had to make some difficult decisions in the recent budget, but, as I said then, in making these choices my strategy was to focus available resources on the measures that allow us to maintain and grow the productive capacity of the agrifood sector and to ensure that the sector is well positioned to get through this challenging period. My overall objective is to allow the sector continue towards achieving its full potential as our most important indigenous industry.

There is every reason to be confident about the future of the agrifood sector. Last week, I was in the United States on an Enterprise Ireland trade mission and I was particularly struck by the clear and growing confidence on the part of US companies in the quality, safety and commercial potential of Irish food ingredients and the companies producing them. I also saw at first hand clear evidence of the internationalisation of Irish food companies and of their ability to compete with the best on the world markets. All this is very encouraging for Irish food processors, their employees and, equally important, for the tens of thousands of Irish producers who supply them.

The next immediate step in charting the future course of Irish agriculture is the CAP health check negotiations in Brussels, which commence tomorrow morning, at which I will defend Ireland's interests to ensure that we maximise the benefits available from the CAP between now and 2013. The reality is that agriculture is at the centre of the main global challenges, such as food, energy security and climate change. Together with all stakeholders, there is tremendous opportunity to further develop and enhance the Irish agrifood sector given its undoubted potential to meet increasing demands.

I thank the Members for the opportunity to outline the challenges and opportunities facing farming and the agrifood sector. The important meetings commence at the Council of Agriculture Ministers. I have some important preparatory meetings in advance of those discussions, which will begin in Brussels in the morning. I will not be able to stay for all the debate but I will be happy to read the comments of all Senators later.

Paul Bradford (Fine Gael)
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I welcome the Minister. I understand the reason for his absence from last week's debate and why he must leave this debate early to prepare for tomorrow's important meetings. We recognise that with the ongoing meetings on the CAP health check, the Minister is significantly involved in planning for the future of Irish agriculture. We sincerely wish him well in that regard. The debate on agriculture at European level is not a question of the Government side or the Opposition side, it is one in which we are anxious to support and encourage the Minister because we are of one mind on the future of Irish agriculture.

The CAP health check is obviously important. The period between now and 2013 is of immediate concern but the period beyond 2013 and planning for that, when the European budgetary strategy will be very challenging, is also important and the Minister should put down early markers in so far as he can. Ireland must again demand a fair and full share of the European budget for European agriculture and, indeed, Irish agriculture. The Minister referred briefly to the issue of food security. We must keep to the fore of our arguments that the demand for food, in Europe and worldwide, is increasing significantly each year. There is a political onus on us and the European Union to ensure that, at a minimum, the Continent of Europe produces sufficient food for its population. We recall from studying history of the European Union in the history books that at the very core of the creation of the European Economic Community was a desire to ensure the land of Europe would produce a plentiful food supply for the people of Europe. This argument is more important now than ever. The concept of global food security should be very much to the fore in this debate.

The Minister referred to energy security and Irish and European agriculture have a very significant role to play in its provision. In the past 12 months or two years, we have fallen out of love, politically speaking, with the contribution agriculture can make to energy supply. Some three or four years ago there was a coalition of like minds on the question of support and subsidies for energy crops. However, in recent times the debate on energy versus food has perhaps become too lopsided in the other direction. I hope we may again consider the very positive measures which agriculture can contribute to energy supply and that we can balance the debate somewhat, because from a policy perspective we have lost the battle in the past two years. We must try to refocus on the possibility of substantial growth — excuse the pun — in energy crops. We must recognise that the primary use of the lands of Ireland and Europe should be for food production, but there is a good deal of spare capacity at present and we must try to refocus the debate towards using some of that spare capacity for energy crops and the supply of energy.

We must revisit last week's debate on the post-budget situation. I recognise the Minister is involved in the CAP health check. The Minister will be involved in the initial debate on the post-2013 situation. However, we must regenerate confidence for the sake of Irish agriculture. Everyone should concede that the Budget Statement of the Minister for Finance dashed the confidence of many farmers and especially young farmers. Last week in the Houses we debated at length the suspension of the farm installation aid grant, the farm retirement pension scheme and the very significant cutbacks in funding for disadvantaged areas. The Minister in his initial comments did not refer to those issues, but I hope they are at the core of his thoughts.

The words "temporary suspension" were used regularly and liberally by those in the Government benches last week and I hope the cutbacks or suspensions are temporary. Will the Minister consider the people who, even if the cutbacks or suspensions are temporary, will fall between two stools — excuse the agricultural pun again — because the timeframe for the installation aid grant applications and the farm retirement pensions applications are tight? Those who may be eligible for these schemes today, tomorrow, next week or next month may not be eligible in six or 12 months' time. I hope there will be a reversal of Government policy on these two schemes. I recognise it may not happen this week, this month or next month, but will the Minister put a structure in place to allow those who would have been eligible to apply today, tomorrow or next month to come within the reconstituted scheme as soon as it returns?

Fidelma Healy Eames (Fine Gael)
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Hear, hear.

Paul Bradford (Fine Gael)
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This would at least allow those contemplating retirement in six or 12 months' time to pause and restructure their plans. However, those who completed the paperwork and whose expectations of income streams are based on retirement and installation aid grant applications are severely disadvantaged and we must put some structures in place to assist them. I recognise the Minister's comments concerning the success of the farm waste management scheme and the significant associated investment. I recognise we are dealing with taxpayers' money, but will the Minister reflect on the 31 December closing date, not only on behalf of farmers with work remaining but on behalf of builders and agricultural suppliers whose income stream in the past 12 months has been very dependent on this work? Notwithstanding that the taxpayer will foot the bill in its entirety for the scheme, much of the money will flow back into the Government coffers by way of VAT and income tax and so on. Some people are genuinely unable to complete the works and obtain the grant by 31 December because of difficulties with planning and suppliers. It could be a win-win situation for the Government, the agricultural community and those in the construction industry if an extension to the deadline were allowed.

I refer to the Minister's ongoing work on the CAP health check. I note with interest his comments on the milk quota regime. We all recognise a decision appears to have been taken that the use of milk quotas as a policy mechanism will disappear in the coming years and this is, presumably, irreversible. I welcome the decision because since 1983, we have been very much aware that while the milk quota regime provided a degree of regulation and certainty to farmers, there was also a capacity among the majority of farmers to increase the quota substantially if the opportunity arose. The opportunity now seems set to arise.

However, notwithstanding my general support for the concept of quota increases, I was impressed and taken aback to a degree by the contribution last week at the Oireachtas Joint Committee on Agriculture and Food, at which Senator Carty was also present, of the Irish Creamery Milk Suppliers' Association, ICMSA. It pointed out some of the very profound short-term pitfalls of a rush to quota removal. There has been a significant drop in the price of milk in the past 12 months. If this drop in price continues, it will make the business of a significant number of dairy farmers impossible. We must balance the need for allowing expansion with the need for a degree of certainty and price support in its traditional sense. The Minister appears to have made a degree of progress on the butter market front, which is welcome. However, before we rush headlong into opening the quota floodgates, we need a degree of certainty.

I posed the question at that committee meeting last week and, because of a simultaneous debate in this House on an agricultural matter, I was not in a position to wait for the answer. Once the quota regime is removed, does the Department, the co-operatives or whoever is responsible have a plan to provide for licensing of milk producers? Once the quota regime disappears, can a given tillage farmer, for example, become a dairy farmer if he or she has the wherewithal and the investment potential? Is there a departmental view that there should be licensing of milk producers which may in itself produce a degree of control? Will the Minister respond to these questions?

I accept the remarks of the Minister on the matter of modulation. This is a new and fancy word which, when inserted in a debate on rural development, is seen in a positive light. However, as currently proposed under the CAP health check, modulation takes money out of farmers' pockets. We cannot support it as currently constructed.

We must remain cognisant in any debate on Irish agriculture that without a European Union structure in place, Irish agriculture would not exist. Ireland would be Iceland without the European Union. Notwithstanding that a poll is a poll and we are always told to say it is only a snapshot, especially when the results are bad, I take some solace from the most recent opinion poll. It reflects support for the European Union and the possibility of a Lisbon treaty rerun and there is a new realism among those in Irish agriculture. I hope the Irish farming community and farm leaders recognise that without Europe and without our close involvement at the heart of European decision making, there would be no future for Irish agriculture. No matter how big our challenges and no matter how deep our difficulties, and big and deep they are, there is no way forward without Europe. That is something we need to keep to the fore of our arguments.

Terry Leyden (Fianna Fail)
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I would like to welcome the Minister of State, Deputy Mansergh, to the House. I now call on Senator John Carty.

Fidelma Healy Eames (Fine Gael)
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Hear, hear.

Brendan Ryan (Labour)
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I welcome the Minister of State to the House. There are many difficulties facing Irish farming at present, including the free-fall in farm incomes, the collapse in milk prices, problems with food labelling, ever-changing deadlines imposed by the Department for applications for grant aid and the world trade talks. The list goes on. I will limit my comments to the issues arising from the budget. It is agreed by most reasonable commentators that budget 2009 has been a disaster in many ways. It took from the poor and vulnerable in our society. It lacked vision and any sense of direction. It was a document from a Government with no eye on the future. Nowhere in the budget was that more evident than in the section dealing with agriculture. No industry has a future as long as it fails to entice new blood and new ideas into it.

This Fianna Fáil-led Government has done more to harm that industry than any group of bureaucrats in Europe or Doha. The cry that rose up from Carrick-on-Shannon on Sunday was that Fianna Fáil has forgotten its roots, and I believe that is true. This budget confirmed the belief that the Government has lost touch with rural Ireland.

The abolition of the farm retirement scheme and the installation scheme will have a detrimental effect on the rural way of life. These measures will make farming an unviable option for most, if not all, young people. Farmers in their late 50s and early 60s will not be able to afford to retire. In turn, without installation aid, their sons and daughters will not be able to afford to start up in farming. These schemes were meant to assist and entice new people — the next generation — into the industry. Without these schemes it is not an option.

The Government is going to let an entire indigenous industry and way of life die out. It is an industry that has been the backbone of the economy for generations. The Government is now driving the final nail into the coffin. The removal of these schemes is a vote of no confidence in rural Ireland. The rug is being pulled out from under many farmers who worked hard in poor times to ensure that they would have something to hand on to the next generation.

A former member of the Fianna Fáil parliamentary party recently stated that de Valera and Lemass would be turning in their graves as a result of this budget and its measures. He was accurate in his analysis. People are tired of the hypocrisy of Fianna Fáil Members in both Houses of the Oireachtas regarding many issues, particularly rural Ireland.

I agree with the sentiments of my colleague, Deputy Penrose, which he expressed during a Private Members' debate in the Lower House, as follows

We will no longer tolerate Deputies and Senators who are all things to all people in their constituencies, but do not express the views of their constituents when they get an opportunity to make decisions on important matters here in this House. We do not want any nice token speeches from Members on the Government side — we want action.

It is not good enough to go off down to a constituency or head to the plinth outside Leinster House and say one thing, while doing the exact opposite in here by following the party line. The soldiers of destiny are fast becoming the soldiers of hypocrisy and the Government is marching rural Ireland to destruction and isolation.

Since coming into Government over 11 years ago, this Fianna Fáil Administration has activated policies that are slowly but surely closing the lid on rural Ireland. Rural creameries are now a thing of the past, while rural pubs and post offices are almost extinct. Never has the fishing industry been in such a disastrous situation. Rising fuel costs, reduced quotas and poor investment have left this once thriving industry on its knees. All this has happened on Fianna Fáil's watch.

The Government has failed rural Ireland because it failed to show leadership or vision. The cancellation of these two schemes is a fitting testament to the failed policies of Fianna Fáil. Rural Ireland will remember this, just as pensioners will remember who stole their medical cards. The cuts in agriculture did not stop with the abolition of the farm retirement and installation schemes. The Government went on to cut livestock and disadvantaged area payments also. This will mean that some farmers could lose up to 50% of their income in one go.

I am particularly disappointed that there has been a cut, from 45 to 34, in the number of hectares for which the disadvantaged areas payment can be made. This is devastating for farmers in the most disadvantaged areas of the country. Rural Ireland relies almost entirely on agriculture. This, of course, is because the Government has failed to invest in these areas. It has shown no vision in attracting other industries there and, therefore, if farming dies away, so will rural Ireland. The effects of these cuts will be felt most of all in the north west, west and south west, the most rural parts of the country. This budget will drive people off the land.

Communities will be decimated and emigration will become commonplace. Rural GAA clubs will again be unable to field teams. This is the vision of Fianna Fáil. It is the legacy of a boom that was squandered during a time of unparalleled wealth that was wasted.

The Labour Party fully supports the campaign to have these cuts reversed. We ask the Minister to consider rural Ireland, including coastal communities that are being put to the pin of their collar in an uphill battle for survival. He should consider farming families that do not currently see a future on the land. We ask him to make a stand against the anti-rural bias that is so clearly evidenced in so many Government decisions.

There is justifiable anger in the farming community, in addition to a fear for the future and what it holds for farming. It is the Government's job to provide the necessary leadership to allay that fear and uncertainty, which is clearly evident. The Minister is failing that test, however.

Dan Boyle (Green Party)
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This debate provides us with an opportunity to discuss agriculture in a more rounded sense. Last week, we debated a Private Members' motion concerning the effects of budgetary decisions on the agriculture sector and today's debate should consider the wider picture. There is no doubt that Ireland can still gain much from its ability to produce good quality food. In that regard, we need to debate the ability of the agricultural system to deliver that into the future. The country has changed sociologically since entering the European Union. In addition, the number of people engaged in agriculture, the size of holdings and the diversity of agricultural practices have changed dramatically. Much of it has been for the better. We have moved away from a mono-cultural farm sector, seeking instead to produce high quality food rather than large quantities of it. This is where our niche market lies and how we can prosper in future.

Concerns have been expressed about rising food prices which have been a factor both this year and last. The situation seems to be stabilising now, however, but we need to reposition Irish agriculture to take full advantage of that. We have chosen to exercise our competitive advantage in agriculture by promoting the rearing of ruminant animals for meat and dairy produce. While we have achieved a high level of quality in that respect, we also need to reach an appropriate balance in the agrisector in future.

In recent weeks, it has been mentioned that the opening up of markets to more red meat and dairy produce, particularly in China, means we must increase production in these areas to take advantage of growing world markets. I would strike a note of caution, however, in that it is not the quantity but the quality that matters. We have already seen a scandal in China over powdered milk. In addition, an increasing number of studies have been undertaken into the effect on countries like China of introducing new food products such as red meat. Therefore, such markets are not presenting as open a door as we might like to think they are. We must first concentrate on the markets we have already developed to ensure that we can keep selling quality food to them in significant quantities.

The real issue for agriculture is to make it as diversified as possible. We have an imbalance in terms of our concentration on meat and dairy products, with less food grown from tillage. We have growing areas such as by-products from dairy, in particular cheese, including farmyard cheeses, which have become very successful. The farming community and farm enterprises are also becoming increasingly involved in elements of environmental policy such as forestry and energy generation, whether through bio-energy, as can be seen in the last budget submission of the Irish Farmers' Association, or the idea of microgeneration of electricity through wind.

The prosperity of agriculture depends on meeting this diversity. In ten or 20 years we cannot be a country whose agriculture depends so much on beef and dairy. We must be a country which uses all the potential within our agricultural sector. If we keep going down the road that we think will lead to prosperity by doing things as we have done them in the recent past, this will be dangerous for agriculture. I sense a growing engagement among farmers and farming organisations to face up to this reality.

In recent years, there was an unfortunate tie-up with the Lisbon treaty campaign and the discussions on the Doha round of the world trade talks. Because of that confusion, we have lost influence in terms of the agricultural debate within Europe and our ability to put our mark on developing our agricultural sector. Farm organisations need to take a responsibility for the confusion that was shown but, at the same time, they should be encouraged into the type of thinking shown in the budget submission, particularly with regard to the micro-energy from wind.

I know the farm organisations are pushing hard to have measures included in the Finance Bill. I do not know whether that is possible but if it can be favourably thought of, if not in this year's Finance Bill then in those of coming years, it would be an interesting building block towards making full use of the capacity of our farm enterprises. This is the real difference between farming in Ireland in the 21st century and the type of subsistence agriculture we had on becoming a State in the 1920s — these are enterprises, this is business, this is agribusiness. In terms of where we go from here as a country, it is by keeping firm to business principles that the agriculture sector of our economy will prosper.

We are still quite poor in adding proper value in terms of our direct agriculture produce. Where Government policy and direction needs to go — I noted the contribution of Senator Ryan — is in making sure there are employment opportunities in food treatment prior to its sale and distribution. This is an area in which, particularly at a time when our economy is at a low ebb and has need of rejuvenation, agriculture can play an important role with regard to getting us back to the levels of growth we have enjoyed in recent years.

Overall, I am optimistic about where Irish agriculture is and where it is going. However, I would add some notes of concern in that if Irish agriculture is to develop, it must evolve, change and make use of the potential that exists.

Fidelma Healy Eames (Fine Gael)
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I welcome the Minister of State, Deputy Mansergh, to the House. I ask that he would take back the concerns and issues I will raise to the Minister for Agriculture, Fisheries and Food.

We pride ourselves on our reputation as a top, green food producing country. However, recent budget and policy decisions by the Government will work to prevent this and — this is difficult to say — will actively work towards the wiping out of farming, particularly in the west.

I was struck by the vagueness of the presentation by the last speaker, the Green Senator. He is certainly green when it comes to farming. He spoke about his optimism and how we need to broaden the debate beyond what is currently happening. Does he want these people to still be in farming? These people — the beef, dairy and sheep farmers — have contributed their way of life and their whole tradition to pure farming. Of course, I agree with broadening it out but let us not forget those who are dedicated to it.

I wish to raise particular issues with the Minister of State. I hope his officials will be able to answer the questions today if they are not within his own remit. The first issue concerns the de-stocking of sheep on the Connemara mountains, particularly with regard to the hill farmers. The deal put forward by the National Parks and Wildlife Service promised farmers €2,000 a year for five years. I want confirmation as to whether this deal is still intact. I ask this in light of the recent budgetary cuts. While there has been no mention of this grant being cut, I am hearing of huge worry among farmers who are expecting this because of the way the Government cut the suckler cow grant.

In January 2007, the then Minister for Agriculture, Fisheries and Food, Deputy Coughlan, with great aplomb brought out the suckler cow grant of €80 a head. This has now been cut to €40 a head despite it being part of the social partnership deal, which I often hear the Minister of State support. We now have a breach of that social partnership deal with regard to the suckler cow grant. Can I confirm that for the hill farmers, whose income is so minuscule I do not know how they manage, the compensation deal around de-stocking is safe?

We already have had breaches of that deal. I was at the public meeting in Maam in Connemara where the farmers were told they would be asked to de-stock to 1.5 ewes per hectare. When they are working out their plans with the individual planners, they are now being asked to de-stock to 42% less in reality — to approximately 0.75 ewes per hectare. To give one practical and actual example, a farmer with 50 acres is allowed 15 ewes. This is a joke. Just how much money does the Minister of State think one ewe is worth? It is not worth even €50. Who can live on that? It is outrageous.

To make matters even worse, once a lamb passes 1 January, it will be called a ewe although it might be only six months old. This is killing enterprise. I have listened to what the Minister and the Green Senator said about promoting enterprise but the farmers need at the very least to be able to replace ewes with ewes. Lambs that are only six months old cannot reproduce until they are at least two years old. The Government should get rid of the ridiculous rule whereby they are called ewes after 1 January.

Let us focus on these Connemara farmers. They are also hit by a 25% cut in area-based disadvantaged aid, which amounts to €1,000 or one quarter of their income. As I said, the suckler cow grant had given a legitimate expectation of €80 per head but this was cut in half. It was a legitimate expectation that farmers had this grant to invest in creep feeders and stock proof fencing in order to be able to mind their animals, but it has now been reduced by 50%. Some 60% of all the suckler herd is in the west and the average size of a herd is 16 cows. While that grant had been 16 multiplied by €80, it is now reduced to 16 multiplied by €40. If one works it out, that is very little.

On top of this, farmers are being asked to pay a 1% income levy on gross income. This must be changed to net income or the Government will be asking farmers to pay a 1% levy on their expenses. For example, if I have 16 suckler cows and get €40 a head, I need to be able to take into account that I had to buy in creep feeders and stock proof fencing. I should not be asked to pay a 1% income levy on the gross amount. I need to be able to take off the cost of the stock proof fencing and the creep feeders to get my net figure, which is my take home pay after my expenses. It is on that figure only that the 1% levy should be imposed. Will that be reversed?

My final point — this is probably the nail in the coffin in terms of the future of farming — concerns the suspending, as the Minister of State calls it, or the abolition of the €15,000 installation aid for young farmers. That is grossly unfair. IDA Ireland can give €17,000 per job to attract a new job to this country. Is the Minister of State saying that a job in farming, which is our traditional way of life, is worth less? Is he diminishing it? When will that scheme be reinstated? The way young farmers who have done the course and all the legal work are being treated is outrageous.

To return to the overall point about social partnership, the Government has breached social partnership by cutting the suckler cow grant from €80 to €40. That was a plank upon which the social partnership deal was agreed. Is that move legal? The Minister of State wants us to buy into it at many levels, yet he treats farmers in this way.

I am angry. I represent the legitimate views of farmers as expressed to me. Part of our family income is from farming. I grew up on a farm and I am involved in farming today. Everything I have explained is real. It is not, as expressed by the previous speaker, something that is vague or that he hopes will happen in 15 or 20 years' time. I am talking about what is happening today.

I thank the Minister of State for listening and making some notes as I spoke. I look forward to getting clarification on some of the questions I posed.

Brian Ó Domhnaill (Fianna Fail)
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This is the second week in a row we are having a discussion on agriculture. I pay tribute to the Minister, Deputy Brendan Smith, for his efforts in the past week in particular, and this week, when he will represent Irish farmers abroad and try to get a better deal for Irish farmers and fight for their future. We should all acknowledge the work that is being done.

I want to examine the issue and put a few aspects into context in terms of farming in Ireland. European Union statistics and data going back to 2006 show that farm households have an average total income of €58,031, or €47,703, depending on whether a broad or narrow definition of "farm households" is utilised. That compares with a State average of approximately €54,000.

The Irish national farm survey undertaken by Teagasc estimated that average farm income, excluding off-farm income, increased by 18% in 2007 alone, to €19,687. The predominant reason for that 18% increase, which was almost one fifth of an increase in overall farm income in one year, was the increase in milk and cereal prices that occurred during that year. Full-time farms as defined by Teagasc had an average farm income of €43,938 in 2007 while part-time farms had an average income of €7,993.

I come from a rural area, and those areas were referred to by the previous Senator. The national farm survey estimated that 80% of farmers and-or their spouses had off-farm incomes and most of those farmers come from rural parts of Ireland. I grew up on a farm and my parents would have had an off-farm income because one could not survive on a full-time farm income, given that the land may not be good. Trying to make money from farming activity alone is not economically viable and therefore the cheque in the post was vitally important to farm families.

It is important we say that because there has been much debate in the past few weeks on the budgetary decisions taken by the Minister for Agriculture, Fisheries and Food, but as I said in this House last week, the decision taken by the Government under the farm waste management scheme was a brave step in the right direction in investing in farm buildings, the future of farming and protecting livestock on our farms. I commend the Government on that. A total of €377 million is being provided under that scheme this year with an additional provision of €195 million next year. We welcome that. Had it not been for that decision which was taken at that time, many farmers throughout the country would not be in a position to develop their farms to their full potential. That may have a detrimental effect on other decisions the Minister had to take but he had to be brave in taking those decisions.

We talk about disadvantaged areas but we should also note the huge increase of 17% in funding now available under REPS 4, which is a phenomenal scheme. I acknowledge the tremendous work of my constituency colleague, the former Minister for Agriculture and Food and now Tánaiste, Deputy Mary Coughlan, who did tremendous work in promoting and developing the REPS and in ensuring that REPS 4 was available to farmers with the 17% increase.

While farmers in disadvantaged areas will find difficulty with the reduction in the requirement from 45 to 34 hectares, we must look at the bigger picture, but the bigger picture is outside our control here. The Minister said that he was travelling to Brussels to negotiate the health check on the Common Agricultural Policy. I call on other farm organisations representing farmers up and down the country to engage positively with the Minister in trying to fight for the rights of farmers under the Common Agricultural Policy health check because while we can play politics within the country we could be doing damage to farm families outside the country if we do not support the Minister in the efforts he is undertaking this week.

I appeal to Senators across the House and to the farm organisations outside it to engage with the Minister, as I am sure they will, given that they are responsible organisations. This week, as the Minister mentioned in the Chamber earlier, the health check is being negotiated and he will represent Irish farmers in Brussels. The Minister stated today that his priorities for the health check include seeking sufficient milk quota increases; appropriate market management arrangements to ensure a soft landing in preparation for the expiry of the quotas in 2015; ensuring clear, predictable decisions that can be taken on the milk quotas to give policies certainty; and other areas, including the future viability of farms in Ireland and the direct transfers available to farmers on which they so highly depend.

The sheep sector was referred to earlier. I come from a sheep farm and the future for sheep farming here is positive because of the work being done by our MEP, Liam Aylward, on bringing together clear and firm proposals for the sheep sector, not only here but across the EU. Sheep farmers, the Irish Farmers Association and other farm organisations should support those steps because it will benefit sheep farmers long into the future.

The suckler welfare scheme was referred to earlier. More than 47,000 participants will benefit from that scheme, which is a new stream of income for Irish farmers. In the next couple of months €77 million will be paid out under that scheme. Senator Carty pointed out to me earlier that €250 million is ring fenced for that scheme over the next five years and it is important to acknowledge that. We need to look in a very logical manner at the domestic situation, the budget available to farming next year and the difficulties with which the Minister has had to deal in trying to balance the future investment provision that is available to agriculture in the 2008 and 2009 budget against the money being paid out under the various schemes. At the same time we must not take our eyes off the ball in terms of the CAP health check, which is so important to the future of agriculture. I appeal to farming organisations to work with the Minister in a constructive manner to defend Irish agriculture under the review of CAP. If we do not do that, the future of Irish agriculture could be in jeopardy. The Minister, Deputy Smith, his officials and the Minister of State, Deputy Sargent are working to defend Irish agriculture at that level. It is important we back the Minister to the full in bringing about the best available opportunities to Irish farming by protecting all our interests under the CAP reform health check.

Eugene Regan (Fine Gael)
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In his statement the Minister, Deputy Smith said it was unfortunate that he missed last week's debate. I imagine he means it was fortunate he missed it because it was a very robust debate on the budget. The Minister's statement says precious little about the budget. He speaks about everything but the budget cutbacks in Irish agriculture, with a few general statements on the budget. He talked about the CAP health check, modulation, a soft landing and simplification, and then moved on to the WTO and climate change. We have statements on agriculture this week, having had this robust debate last week when the budget was the issue of primary concern to farmers. Any Minister negotiating in any external forum, whether the EU or the WTO, has an obligation to do his best for Irish agriculture. That is a given and one expects it. The Minister does not need a clap on the back for that.

No matter how bad things are, one must invest for the future and ensure the sector is efficient. The Minister points out in his speech how important agriculture still is to this economy. He points out that the sector contributes up to 39% of net foreign earning in the primary manufacturing sector, according to the recently published Reardon report. It is still a very important sector and is vital to the incomes in rural areas in general. However the Government must encourage structural changes. The ending of the young farmers installation aid scheme and the early retirement scheme and the cutbacks in the disadvantaged area schemes are false economies. They are detrimental not just to farmers now but to the future and the structure of farming given the age profile of Irish agriculture and the need to encourage to the maximum the transfers of farms into the ownership of young, qualified farmers. The budget is very negative and detrimental to that movement and that constant process of structural adjustment required. Given the IFA's position on the WTO, the Minister adopted a vindictive approach in the budget. It was payback time for the IFA and other farming organisations that created difficulties for the Taoiseach and the Government during the Lisbon referendum. The Government has got its own back on farmers with the measures it has adopted in this budget.

Senator Boyle said we need diversity in Irish agriculture. Our climatic conditions favour two major sectors, dairy and beef. One cannot change the nature of Irish agriculture and the comparative advantage this country has in livestock. Oddly, Senator Boyle talked about farmhouse cheeses in the same breath, perhaps not realising that this comes from the dairy sector. Senator Ó Domhnaill talked about how well farmers have done, as if farmers should be lucky to earn a living from farming. Farming has become very specialised. People work very hard and if they have one good year in prices for their products, that should not be used to justify the type of cutbacks the Minister imposed in this budget.

Brian Ó Domhnaill (Fianna Fail)
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I did not say that.

Eugene Regan (Fine Gael)
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It is unfortunate the Minister did not set out in the budget any justification or rationale for the measures he adopted. That is the issue of the day. To speak about issues that are, and will be for some time, the subject of ongoing negotiations in Brussels, such as the CAP health check and the WTO, is to avoid the issue and that is what the Minister has done.

Fiona O'Malley (Progressive Democrats)
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I am glad of this opportunity to discuss agriculture and I want to talk specifically about the future of Irish agriculture. We had a very interesting day last week in both Houses of the Oireachtas and in the committees. The Department of Agriculture, Fisheries and Food and many farming organisations were in for much of the day, there was a Private Members' motion here and it gave us an opportunity to hear about the future of Irish farming. We on the climate change committee were looking at it from the perspective of climate change and it got me asking what is the future of Irish agriculture.

I listened with interest to other contributors. Coming from an urban centre I am not very familiar with all the grants and schemes, however being familiar with the west I know about the hardship of trying to make a living from small farming. It is most interesting and deserves a little thought. Having a vibrant agricultural base is so important to rural Ireland and it demands that we examine the future of Irish agriculture. I accept that I am not the most familiar with agriculture. There has been a major problem of examining only the short term rather than the fundamentals of Irish agriculture. Farmers have taken much change, such as the CAP reform. We are still in a transitional phase. We need to look beyond this immediate term. That struck me when we had discussions with the Department and the farming organisations. There is no long-term thought going into it. I was glad to hear that Teagasc is involved with a group that is engaging in futuristic modelling for Irish farming. The group in question is looking at the present circumstances and deciding what is needed. Agriculture is definitely going to change. We cannot bury our heads in the sand. We have to accept that it is going to be different. As farmers are very entrepreneurial, they will adapt to that change. There is no point in sticking with something that no longer works or no longer meets our requirements.

As we live in a globalised world, we need to be conscious of what Ireland can do in the agriculture industry. I understand that one of the things Irish agriculture does most efficiently is rear cows. It is understandable that we should focus on that area if that is what we are good at. The threat of the climate change issue is hanging over the cattle sector, however. I find that the agriculture sector is blamed unfairly for carbon burden associated with it. The three main sectors that contribute to carbon emissions are transport, energy production and agriculture. Last week, statistics were published to show that there has been a decline in the carbon output of the agriculture sector. The benefit of such improvements is often transferred to the transport sector. The development of biofuels is a case in point. The Department of Agriculture, Fisheries and Food has defended the good work that is being done in the agriculture sector. The agriculture sector is getting its house in order, but it is not able to claim the credit for it. That is an important point.

Having said that, we need to think about issues like climate change and the carbon cost of the production of food. If Irish agriculture is to change, we will need to prepare people in advance. This is a sensitive time, as negotiations on the Common Agricultural Policy health check continue. We need to look beyond that. Farmers will be involved in a totally different type of work in the future. We need to project ourselves forward by ten years to see what farmers will need to do. We should get farmers to prepare for the change that is to come. I appreciate that a certain amount of work is being done in that regard, but I would love to see more of it. There needs to be a much more open debate on how much change is needed in this sector. There are big opportunities for farming. Farmers have proven in the past that they can adapt to change and we need to give them the confidence to do so again. I would love a big seminar to be organised to address the changes in the agriculture sector. People have nothing to fear from such changes. If change happens in a cold and undercover way, people may get anxious. We need to openly prepare people for it.

I suggest that the name of the Department of Agriculture, Fisheries and Food should be changed to the Department of food security. That would focus minds on the role of the Department in providing food for the European and world markets and dealing with other issues like climate change. The term "Department of Agriculture, Fisheries and Food" is too all-embracing. It needs to be a little more focused. I would like it to be renamed as the Department of food security, as I have suggested. Such a change would ensure that we would know exactly what the Department is about. We should acknowledge that Ireland has to play an important part in feeding the European community. We should not be penalised for the carbon costs we incur in so doing.

Paddy Burke (Fine Gael)
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I welcome the Minister of State with responsibility for food, Deputy Sargent, to the House. I am pleased to have an opportunity to say a few words on the agriculture industry.

I am worried about the performance of Bord Bia in the export market. When I was in southern Spain and Portugal during the summer, I found it hard to get Irish dairy products. One will see Dairygold butter for sale overseas, but other Irish dairy products cannot be bought. I presume that the vast majority of Ireland's substantial exports in this sector are sent to Great Britain. There is a huge market for Irish products in other European countries. With the exception of Dairygold butter, I could not see such products when I was abroad.

I would like to speak about the importation of Brazilian and Argentinian beef. I am concerned about the accredited farms such beef comes from. It has been brought to my attention that, in some cases, accredited farms are selling beef from neighbouring farms that do not have such accreditation. There are no checks in the system to stop such farms from buying cattle or beef from other farms in the area. I urge the Minister of State to investigate this phenomenon as a matter of urgency. What controls are in place on the accredited farms? How can we be sure that the beef that comes through such farms has not been purchased from other farms in the neighbourhood? How do we know its sole origin is an accredited farm?

A recent Sunday newspaper article suggested that the Government, for some peculiar reason, decided not to avail of a €200 million grant for the forestry industry, which it had been offered by the EU. It seems that the Government decided instead to support the industry from the national Exchequer. Can the Minister say whether that is the case and, if so, why? If the EU offers Ireland a grant of €200 million, would it not be foolish to refuse it? Why should the taxpayer have to stump up €200 million? Why is the Government not availing of the EU moneys? Has it decided, for some reason, that we have too much money in the coffers here? Does it think it is preferable for us to stump up the €200 million ourselves? That was the implication in the newspaper article I mentioned. I ask the Minister of State to explain why Ireland has refused a grant of €200 million that was available from the EU. We have fallen far behind in respect of plantations etc. in the forestry industry. For some reason, our Exchequer moneys are being used instead of a grant from the EU.

I would like to talk about education for young farmers. We have seen more farmers entering agricultural colleges and availing of farming education initiatives this year than we have for many years. It is a grave error on the part of the Government to cut installation aid, as well as the retirement pension for farmers who are handing over their farms to their sons, in a year when our agricultural colleges are overflowing with students. As previous speakers have said, the jobs that are being created in the agriculture industry are as valuable as those in other industries, including those IDA Ireland is trying to attract as it scurries around the world. For some strange reason, the Government has decided to save a small amount of money by cutting the retirement pension and taking away the installation aid scheme. Such forms of assistance are badly needed by young farmers who have decided that the best way forward for them is to take a risk by going to agricultural college, or availing of some other form of education, with a view to having a career in agriculture on the family farm or some other farm. In addition, the withdrawal of a number of disadvantaged area payments is a grave injustice to farmers, especially when this is coupled with the 1% levy on their gross income. That will create hardship on many farms and I am disappointed with the Government's decision to single out agriculture and the low paid in the industry. This issue should be examined.

Paul Bradford (Fine Gael)
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I call on the Minister of State to reply. I advise him that, following his reply, there will be a brief question and answer session. The time available for his response and questions is ten minutes.

Trevor Sargent (Dublin North, Green Party)
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Ar dtús báire, tá mé ag fanacht le haghaidh nótaí os rud é nach raibh mé anseo i rith na díospóireachta ar fad. Tá brón orm faoi sin. Leanfaidh mé ar aghaidh mar atá mé. Gabhaim mo bhuíochas, agus buíochas an Aire, an Teachta Smith, a thosaigh an díospóireacht, leis na Seanadóirí a labhair i rith na díospóireachta.

I thank the House for granting time to discuss the future prospects for agriculture. As the Minister outlined earlier, the industry as a whole is well placed to address the wide range of challenges confronting it, notwithstanding the difficult budgetary scenario in which the country finds itself.

I share Senator O'Malley's analysis that we need to focus much more clearly on food security as well as fuel security and other aspects within the Department's remit. I may be biased but if the Department were the only one left standing, it would do a good job in taking on many of the responsibilities of other Departments, including the Departments of Education and Science, Health and Children and Foreign Affairs. Everything goes through my Department one way or the other. For example, Senator Burke referred to Bord Bia and how our international relations are connected to our agricultural base. I have had the good fortune to accompany Bord Bia representatives at a number of international meetings and on trade missions to France and Germany. We attended Anuga, an international food fair in Germany, and the Terra Madre conference in Turin, Italy.

Irish products worth approximately €600 million are sold on the German market while the value of products sold on the French market is €400 million with hundreds of millions of euro more sold in Italy. Domestic companies have relations with one or all members of the EU and Russia and so on. The EU is our key market and that is positive from a sustainability point of view because this is the closest market to us in the context of transportation. Kepak, for example, does great business with Coop Italia, one of the large Italian supermarket chains, Carrefour in France and SPAR and other large chains in Germany. Clare Island organic salmon worth €20 million is sold in Germany annually. Significant business is being done internationally thanks to Bord Bia's excellent ability to nurture and maintain markets.

The Ministerial Council commencing in Brussels tomorrow is vital for the agricultural sector and everyone has wished the Minister well in his endeavours, in particular, Senator Bradford. This week's negotiations on the Common Agricultural Policy health check will determine the shape of the policy until 2013 while discussions on the post-2013 scenario will take place in parallel with a wider discussion on the EU budget for the new financial perspective for the period 2014 to 2020. There is a continuing strong case for an effective and well-resourced Union CAP, especially given the central importance of agriculture in current global challenges.

Central to the negotiations over the coming days will be the subject of the milk quota, which was raised by a number of Senators. Ireland would like the implementation of a soft landing approach to increases in milk quota in the lead-up to their removal in 2015 to avoid shocks, with appropriate market support in place to underpin the process. We are anxious that these pragmatic proposals and measures be adopted.

Ireland has been to the forefront in seeking to develop mechanisms for the measurable simplification of the various processes with which domestic farmers must comply, especially in regard to cross-compliance. All farmers in receipt of direct payments must practise farming in accordance with specific environmental requirements meeting broader sectoral demands. I accept farmers generally employ good farming practices in operating their farms. As part of the simplification process, it must be ensured the administrative burden on them is reduced while maintaining environmental standards.

The proposal before Council on modulation remains of concern for Ireland and runs contrary to the expectations of our farmers who are still adjusting to the introduction of decoupling three years ago. The Minister has put in great effort over recent months in working with the Commission, the Presidency and other member states to find a meaningful resolution having regard to these concerns. Last week we had a full debate, notwithstanding disagreements, on the budgetary measures. The Minister clarified earlier, as I attempted to last week, the need to protect as best we can the areas of greatest need and the productive capacity of the industry. We want to ensure sectors that can stand on their own two feet do not suffer handicaps or obstacles. As Senator O'Malley said, farmers who are traditionally resourceful, resilient and able to adapt should be given every opportunity to adjust to the changing circumstances we face nationally and internationally.

I refer to forestry and funding, which can sometimes raise unintended obstacles. It was incorrectly reported in one newspaper that the Department did not avail of full EU funding for the forestry sector. The Department wrote to the newspaper explaining the position. The position is that one forestry scheme which was eligible for EU funding was included among others in a submission to the EU under the Rural Development Programme. However, under the EU rules grants could amount to only 80% of total cost to farmers for the forestry scheme. The Department, in order to increase forestry planting, had a policy of 100% funding for the scheme and withdrew the scheme from its submission to the EU. However, the full amount of EU funds available was drawn down in the other elements of the rural development plan and the forestry scheme was paid for by the Exchequer. Often there can be different ways of drawing down that money. If it means we lose money, we will find another way of drawing it down.

The House will note, as it has been acknowledged, that forestry generally has been one of the beneficiaries of the budget. This also stresses the point I made, that the productive side of the sector is what we want to continue to encourage and ensure that we are able to maintain a sustainable sector which is resilient enough to withstand the changing circumstances, world wide as well as nationally. We will continue to ensure that forestry and all aspects of agriculture are central to the Irish economy given that they are our largest indigenous resource.

Paul Bradford (Fine Gael)
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I thank the Minister of State. I have three brief questions and I appreciate the time constraints he is under.

As a reflection on last week's debate, has there been any further work done by the Minister of State's office and his ministerial colleagues on all of those applicants for either farm insulation grants or farm retirement schemes whose applications were being processed but, unfortunately, due to the budgetary announcement, are now suspended? I appreciate that the long-term future of the scheme is, hopefully, secure, but is the plight of the applicants whose projections were based on receiving these grants and who are now left out in the cold being considered? Has any further consideration been given to the extension, beyond the 13 December deadline, of the farm waste management scheme?

I referred in my brief contribution earlier to the ongoing debate on food versus energy and how in one sense it rebalanced almost to an extreme degree. The plans, both within the country and at European Union level, for a significant investment in energy crops appear to have slowed down significantly. Perhaps we had gone too far down that road and had too high a level of expectation. Could we reflect a little further, take note of the energy crop opportunities that are still available and try to get it back on the political agenda?

Trevor Sargent (Dublin North, Green Party)
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I note Senator Bradford raised that issue earlier.

As I mentioned last week, the introduction of the young farmers' installation scheme in June 2007 under the Rural Development Programme provided a grant level of €15,000, an increase of 58% compared to the preceding scheme, to farmers between the ages of 18 and 35. When all of the requirements under the scheme were satisfied, 941 applications were received by the Department under the scheme prior to its suspension on budget day. Of these, 315 applications have been already paid, totalling €4.725 million. All fully completed applications entered into under the scheme up to and including budget day will be processed by the Department and, if in order, payment will be made. That was the undertaking that was given.

As Senator Bradford rightly pointed out, the suspension that is in operation means all applicants will be processed in accordance with the rules that are laid down but it is, unfortunately, the case that we cannot take further applicants until the suspension is lifted. However, the payments are proceeding and, as I mentioned, there already has been €4.725 million paid out.

On the farm waste management scheme, it has been well and truly stated in as clear a manner as possible which leaves no room for ambiguity that the European Commission has told us without any doubt that the deadline stands. Based on its long tolerance of Ireland not complying with the Nitrates Directive over many years, the Commission basically asked us not to stretch its tolerance any further and it is at the end of the line. That message, I hope, has been stated clearly. It is not fair to give any impression otherwise. Politically, I would like to state that there is scope or wriggle room but if I were to say that, it would not only be dishonest but would also send out a message that people who are working towards the deadline may have a plan B. Unfortunately, there is not a plan B. I do not want to give any such false impression. I hope that all things considered — the downturn in construction and reasonable weather over which we have no control — ultimately we will be able to ensure the schemes are completed by the due date.

Senator Bradford also mentioned energy. This is one of those global debates. There is a clear conflict world wide due to difficult choices. I believe, however, there is a clear choice. The choice people tend to make is between whether one feeds the petrol tank or the stomach. It is not a question of either-or because there are different types of land, there are different rotations in farming that can complement both serving a food need and an energy need, and then there is the addition of forestry and other aspects that perhaps would not have a food element.

In this country we are focussing on not being exclusive about it but ensuring they complement each other. For example, in my area of north County Dublin many brassica farmers are not particularly keen to see nearby rape seed growing because it is a brassica and they do not want to be affected by any of the disease problems that might come with a brassica. Whether grown for energy or for food is beside the point. These are technical aspects of the issue that need to be kept to the forefront as well.

Paddy Burke (Fine Gael)
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When is it proposed to sit again?