Thursday, 29 October 2009
Farm Household Incomes
Cuirim fáilte roimh an Aire Stáit go dtí an Seanad. I raise the issue of agricultural cuts in the Seanad and I am calling on the Government to reverse some of them. Unfortunately, I understand that the answer will be a very blunt "No" and that I will be told these cuts are meant to get the country back on track and indeed more will be coming down the line in the form of the McCarthy report that will impact on agriculture. My argument is that agriculture is providing jobs and the 13% cut in last year's budget amounting to about €210 million is already having a crippling impact on the agricultural sector right across the State. Many schemes have been affected including installation aid, disadvantaged area grants, suckler support and early retirement schemes, allocations to Teagasc and most recently the REPS 4 payments. Each of these is having an impact on a certain sector. Some of them are having multiple effects on the same family farm.
County Donegal does not have enormous farms, but very small holdings, many of them in very poor land. One of the reasons the Brits never planted Donegal was because the land was so bad, and farmers on those small holdings have been struggling ever since. These cuts are having an impact on Donegal and other counties particularly along the west coast, where land is not as good or productive as in other areas. I am only echoing what I hear from those farmers who are trying to keep their head above water, struggling to continue the tradition of the family farm to pass it on to a younger generation. I hear, too, from young people who want to get out of the colleges and onto the family farm. The stories would break one's heart, particularly as regards supports such as installation aid which were cancelled by the Government last year. This restricts young people from going into farming.
I ask the Minister of State to re-examine these cuts so some of them may be reversed. The closure of REPS 4 has had a devastating effect on rural Ireland. This House knows well that although REPS 4 was an environmental protection scheme, it represented additional income for family farms throughout the State. Without that income many of these farms would become non-viable and its withdrawal has done just that. It is not sustainable for people to continue with traditional farming. We need to understand that this is the industry which puts food on the table and services the retail sector. It exports and is enormously beneficial to the economy. We are in danger therefore of cutting off the hand that feeds us.
If the Government wants a system whereby large farms produce the majority of the country's food, then it is following the correct route. If it wants small individual family farms to continue through the 21st century, however, it needs to reassess some of the cuts it has implemented, as well as some of those being proposed in the McCarthy report. I ask for some generosity in this regard. Given that the IFA has produced a plan which would see significant savings within the Department's spending area, it needs to be acknowledged that the Government should listen to the real concerns of farmers.
This is just one of the many sectors of society which is outraged at the Government's handling of the economy and the decisions taken that affect rural communities and the least well off, to pay the price for the sins of others. The anger is palpable throughout rural Ireland in the farming sector, and rightly so. This Government is going to squeeze small farmers out of business. It is one cut after another. How many times can cuts be inflicted on family farms without ending up butchering them. I ask the Minister of State to give careful consideration to my plea, which is an echo of the many pleas I have received both in my constituency and around the State from farming families, to ask the Government to reverse these cuts.
Ba mhaith liom mo bhuíochas a ghabháil don Seanadóir as an cheist seo a ardú. Tá an-suim agam sa cheist, go mór mhór nuair a deireann sé go bhfuil ceardaí ag dul thar fór. Caithfear a admháil chomh maith go bhfuil an-chuid airgead i gceist atá ag dul i dtreo na tionsclaíochta bia agus iascaireachta. Nuair a cuirtear airgead náisiúnta agus airgead na hEorpa le chéile táimid ag caint faoi €3.4 billiún i 2009 mar thacaíocht do comhlachtaí agus feirmeoirí bia agus iascaireachta. Ní beag an méid airgead é.
Having said that, I must tell the Senator that the Minister, Deputy Brendan Smith, and I are acutely aware of the difficulties facing farmers and the rural community in general against the background of the global economic recession, the serious deterioration in the public finances and the exchange rate difficulties with sterling. The farming sector has also been badly hit by poor prices, market returns and difficulties in accessing credit. It is something of a perfect storm, if one was to put that in an economic context. It is affecting the farming sector, and pretty much every other sector as well.
As a small open economy, Ireland has been particularly exposed to the global downturn. Our economic difficulties have been exacerbated by the international credit crisis that compounded the problem, particularly in the construction sector. In order to address these problems, the Government has embarked on a strategy to restore the credit system, get the public finances under control and provide the necessary stimulus to restore confidence in the economy. This week a critical element of the overall strategy, the establishment of the National Asset Management Agency, is being debated in the Seanad and in the other House.
Nevertheless, notwithstanding the current economic difficulties the reality is that very substantial funding continues to be provided by the Government for agriculture and the agri-food sector. Despite the budgetary constraints, more than €1.9 billion gross has been provided in the Revised Estimates for the Department in 2009. When combined with EU funding of about €1.4 billion, which is administered by the Department, this represents a very substantial level of support for the agricultural sector.
Direct payments, which are of particular benefit to farm families, are continuing at a very substantial level. The payment of the €220 million provided in the Department's 2009 Vote for the disadvantaged areas scheme commenced in September. Almost 100,000 farm families have received their payment under the scheme.
This year for the first time, advance payments of 70% of the single farm payment were issued by the Department beginning on 16 October. To date, payments amounting to more than €830 million have issued to nearly 120,000 farm families. The combination of these two schemes, together with payments under the REP scheme and the suckler cow scheme, will result in payments of almost €1.8 billion to farm families in 2009. This is in addition to more than €250 million in investment support on farms and almost €120 million in supports for the forestry and bio-energy sectors.
There has been much negative and often misinformed comment about the closure of the REP scheme which I believe overshadows the massive level of funding which has been provided and continues to be provided for the scheme. This year, expenditure by the Department will be €330 million. All existing contracts will be honoured and I expect that €1 billion will be spent on REPS in the next three years. This is in addition to the €3 billion that will have been spent on it by the end of this year since its introduction in 1994. Under the current budgetary circumstances, expenditure on the scheme could not continue at that level. However, the Department is in discussion with the Commission on the details of a new agri-environment scheme with funding of €179 million which the Minister is confident will be introduced in 2010.
The Minister is also continuing with efforts to develop the agriculture sector further. In that context, new targeted on-farm investment schemes were announced recently worth €113 million together with proposals to spend €75 million in unspent single farm payment funds in support of incomes in the sheep sector and efficiency improvements on dairy farms. These measures will help to ensure Irish agriculture is well positioned to achieve its full potential and benefit from future economic growth.
Vital work is also continuing on a number of other fronts, including continuing investment in research and development in the agri-sector, the provision of investment support for the processing sectors, the protection of Irish farms from animal and plant diseases and, of course, in our continuing efforts to ensure the deployment of the full range of market support instruments to support the dairy sector through this very difficult time. In that regard, the House will be aware that the European Commission recently announced a package of funding to support the dairy sector. The Minister played a leading role over several months, together with other like-minded member states, in ensuring the introduction of this funding.
I believe there is very convincing evidence, therefore, of the Government's commitment and determination to support the agriculture sector and farm families in particular. The Government will continue with these efforts to develop a strong and sustainable agriculture sector and to support farm families both in terms of providing funding and in representing the interests of Irish agriculture at EU level and internationally.
While I welcome the response of the Minister of State, it is unfortunate that the cuts will not be re-examined. I am sure the Minister of State realises that many family farms are just teetering above the waterline and ready to go under. The Government's policy of reducing supports to them will put additional people on the live register, taking away the source of food and the tradition of the family farm. Does he not acknowledge that it is already happening and will continue to happen unless some of these cuts are reversed?
I acknowledge that farm families are under great pressure. The Senator may have read in today's Irish Farmers' Journal the comparisons being made between the challenges faced in the 1980s and the challenges faced today. One could argue that the challenges are even greater today because in the 1980s there were more farmers and perhaps more options. Since that time a more dominant role is played by fewer buyers and processors. Essentially the gateway of access from producer to consumer has become narrower and more filtered, so the pressure is greater. The principle is that in recessionary times it will not be possible to spend our way out of it or to put off the evil day. There will be even greater unemployment, a view that has been repeatedly made to me. Unless we take very painful decisions as fairly and equitably as we can in a balanced and understanding way now, it will not get any better and in fact will get much worse.
My area of horticulture does not receive the millions of euro that I mentioned in my earlier reply. Horticulture is the canary in the coalmine. In 1980, 1,220 people were involved in horticulture. That number has steadily reduced and is now approximately 280. However, the area of land has not changed. It has simply been that people who have been under pressure have thrown their hat at it and got out. In many cases they are renting their land to somebody who has not got out of the business. We need to find other ways to access the market other than just the supermarkets which are very good and convenient and on which we all depend for our weekly shopping. The same area of land used by those 280 growers in the neighbouring island of Great Britain is being farmed by three farmers and even one of those is losing money.
I agree with the Senator that we need those direct payments and we need to be very mindful to maintain the supports people need just to get by. However, we need to go far beyond that if we are to ensure we have the viability in farming that would allow people to get access to market. I realise that is a much bigger question than we can address today. It is an issue of which I am very mindful as, I appreciate, is the Senator. Payments form only one small part of it.