Brian Ó Domhnaill (Fianna Fail)
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I welcome the Minister for Agriculture, Food and the Marine, Deputy Michael Creed. I raise this issue today in the context of budget 2018 and the difficulties the Minister, and every Minister, will have with competing demands. This matter relates to the areas of natural constraint payment where funding of approximately €200 million is available from the Department towards the most severely disadvantaged lands and the farmers who farm those lands, whether they are constrained by coastal issues, hill farming, the altitude of the land, the marginal nature of the land, or the low stocking density. They have argued for a long time, as have the farming organisations, that it is essential that the programme for Government recommendation or agreement for an additional €25 million is made available.

I raise this issue in the context of the forthcoming budget. I know the Minister cannot divulge what he may or may not do, but I wish to highlight the need, if it is at all possible, to make that money available for 2018. These areas are farmed and the first 10 ha of the payment is front loaded at around €109.71 per hectare. After 10 ha, it goes back to between €95 and €99 per hectare. It is argued that there will be additional front loading done and if possible this front loading would increase from 10 ha to 20 ha. This would be of significant benefit to the most marginal farmers in the State. According to Department of Agriculture, Food and Marine figures, I understand some 30,000 such farms exist. They are constrained and they are custodians of the most rural parts of Ireland. I hope that additional moneys can be made available under the scheme, which is aimed at supporting the most marginal land. I hope there will be some good news in the coming weeks in that regard.

Michael Creed (Cork North West, Fine Gael)
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I thank Senator Ó Domhnaill for raising this matter.

The areas of natural constraint, ANC, scheme was introduced under the 2014-2020 rural development programme as a replacement for the previous disadvantaged areas and less favoured areas schemes, which had been in place since 1975. Payments under the ANC scheme are an important support for farmers across the country in addressing cash flow issues and in contributing to the continued growth and development of the agrifood sector.

The scheme was originally introduced in 1975 in recognition of the fact that farmers in particular areas were faced with challenges relating to lower productivity and higher production costs than farmers in other areas where levels of disadvantage were not as pronounced. The significant level of financial support delivered through the scheme in the intervening years was provided in recognition of the fact that such issues posed a significant threat to the future viability of these farming communities. The specific objectives of the scheme are structured around themes such as ensuring continued agricultural land use, thereby contributing to the maintenance of a viable rural society, maintaining the countryside and maintaining and promoting sustainable farming systems, which take environmental protection into account.

I am very aware of the importance of this scheme to the more than 95,000 farmers who receive the payment annually. With this in mind, I have prioritised the efficient payment of the ANC scheme in my Department in recent years. In 2016, payments under the scheme began in mid-September and, to date, in excess of €203 million has been paid to more than 95,000 farmers.

In the past few weeks, payments under the 2017 ANC scheme have also commenced. In the first tranche of payments in the third week in September, €160 million was paid out to some 75,000 farmers.This is a significant increase on 2016, when 65,000 farmers were paid €140 million in the first tranche. Regular payments will be made in the coming weeks to ensure that cases are processed once they become clear. At present, approximately €170 million has issued to 80,000 farmers.

Under the Common Agricultural Policy finalised in 2013, the new rural development regulation introduced a change in how eligible areas under the areas of natural constraints, ANC, scheme were to be defined. The designation of eligible areas under these schemes to date has been based on a range of socioeconomic factors. These factors include: particular stocking density levels; family farm income levels; population density; and the percentage of the total working population engaged in agriculture. The change in question required that eligible areas must be designated using a set list of biophysical criteria. The purpose of this change is linked to a concern at EU level that areas were not being designated as disadvantaged in a consistent manner across the various member states.

My Department has commenced work on this project and relevant technical experts are currently working on sourcing and analysing the data in respect of the new criteria. Department officials have also been in contact with the joint research centre, JRC, and DG Agriculture and Rural Development in the EU Commission in respect of technical issues arising. The ongoing analysis will identify areas deemed to be facing natural constraints, which will, in parallel, be subjected to a refinement process.

In the original rural development regulation, the new ANC designation was scheduled to be in place for payment in the 2018 scheme year. However, as part of the ongoing discussion on amendments to regulations at EU level, a proposal to extend this deadline on an optional basis is being considered. This proposal is currently passing through the relevant approval process at EU level along with a number of other regulatory changes in what is referred to as the "omnibus proposal".

In view of the importance of the financial support to farmers provided under the ANC scheme, the programme for Government commits to a €25 million increase in funding for the scheme in 2018. This is being considered as part of the ongoing annual budgetary process for 2018. There are a number of options in respect of how any additional funding could be allocated. These options range from allocating the funds as a flat increase across the current payable rates to various forms of targeted higher payment rates for particular categories of farmers. Any changes would require agreement with the EU Commission via a formal amendment of the rural development programme for the period 2014 to 2020.

Paul Coghlan (Fine Gael)
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I thank the Minister. It was a comprehensive reply and the Senator has indicated that there is no need for a supplementary question.