Seanad debates

Tuesday, 14 November 2017

Commencement Matters

Agriculture Schemes

2:30 pm

Photo of Denis O'DonovanDenis O'Donovan (Fianna Fail)
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The first matter is raised by Senator Tim Lombard. You have four minutes. I welcome the Minister of State to the House. Tá fáilte romhat.

Photo of Tim LombardTim Lombard (Fine Gael)
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I thank the Minister of State and the Chair. Today I raise the matter of having the Targeted Agricultural Modernisation Scheme, known as TAMS II, include the generation capacity that is required for farmyards. As the Minister of State is aware, TAMS II has been a very successful scheme. It provided important funding for farm equipment in order to ensure expansion. Under the dairy equipment scheme, TAMS II has funded milking parlours, milk cooling equipment, water heating, and also in-parlour feeding systems. The anomaly in the system, unfortunately, is generation capacity, which is required when or if there is an outage of power.

In the middle of October this year, we had a weather event which was amazing in so many ways. The south west of Ireland was greatly affected. At one stage, 385,000 were without power. This included farms, businesses and the wider members of the public. The knock-on effect that had on the agricultural community was immense. There has been a large expansion in agriculture, particularly in the dairy herd. Over the last four years the number of dairy cows has increased by 300,000 to 1.4 million. With such a large expansion, there has been a major increase in plant size and capacity. Milking parlours and bulk tanks have all been expanded. At the back of that, the one thing that has not increased is the generating capacity. The hardship that farmers and animals went through during this unfortunate weather event was immense. It took ten days for some of these areas to have power again.

In many ways, for those of us that were affected, it is very hard to describe. There were situations where generators were being moved continuously in order that cows could be milked at least once a day. There was an article in the Southern Stara few weeks ago describing how one man milked 1,200 cows, moving a generator seven times in a 24-hour period. That was the level of work required to ensure that his cows, or the cows in his community were milked. People worked together.

What I am seeking here today is that TAMS II should be amended to include generators. Generators are a huge part of the industry. We have seen a deficit in generating capacity. TAMS II allows for so many things to help the agriculture industry to expand. I have mentioned milking parlours, cooling systems, store equipment, water heating and in-parlour feeding systems. It is certain that the anomaly is the lack of generation. We need to include that as an important part, so that the industry that is worth billions to us and to this economy can develop. It is, in many ways, the last piece of the jigsaw. I hope today that we can put on the agenda that the Minister of State can review TAMS II, to ensure the anomaly can be addressed, and that the generating capacity shortfall in the dairy industry, that unfortunately we have all seen, can be addressed as well. I thank the Minister of State.

Photo of Andrew DoyleAndrew Doyle (Wicklow, Fine Gael)
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I thank Senator Lombard for raising this matter and welcome the opportunity to outline the position regarding TAMS, known as TAMS II.

During 2015, a suite of six measures were announced under TAMS II. These measures were launched under the Rural Development Programme 2014 to 2020 and are co-funded under the European Agricultural Fund for Rural Development, EAFRD. The measures provide grants for capital investment in physical assets to assist the Irish agriculture sector to respond to a range of policy challenges. The six measures initially launched were: the young farmers capital investment scheme; the dairy equipment scheme, the organic capital investment scheme, the animal welfare, safety and nutrient storage scheme; the low emission slurry spreading scheme, and the pig and poultry investment scheme.

Among the objectives of the scheme are to enable growth and competitiveness in the sector, addressing environmental and climate change issues, supporting the increased efficiency on holdings and improving animal health and welfare.

In addition to these objectives, the young farmers capital investment scheme aims to address one of the key structural issues in the sector by specifically targeting support at young trained farmers by offering them a higher rate of grant aid of 60% compared to the standard rate of 40%. In March of this year an additional measure, the tillage capital investment scheme, was added to the list of measures. One of the objectives of this scheme is to facilitate the tillage sector to develop a targeted and precise approach focusing on environmental dividends, efficiency and growth.

There is a huge variety of items available under the suite of seven TAMS II measures. As in all measures, applications and payment claims must be made online, either by the farmer or by an adviser authorised to act on their behalf. The financial allocation in respect of TAMS Il for the full Rural Development Plan period will be in the region of €395 million. In order to encourage the drawdown of funding, provide increased budget certainty and to ensure that all farmers can avail of funding over the entire period of the Rural Development Programme, the length of time in which to undertake the works approved under the sixth tranche onwards was reduced from the three year period in previous tranches to six months for mobile equipment and twelve months for fixed building works. The period for the completion of works approved or to be approved under previous tranches remains unchanged.

I am delighted that the scheme has proved to be so popular with Irish farmers with over 15,000 applications submitted to date. Of these, over 11,500 or over 75% have been approved to commence work. Approvals issue on an ongoing basis with approvals under the most recent tranche due to commence shortly. The figures are much lower, however, when it comes to submission of payment claims by farmers. It is open to approved applicants to submit an online payment claim as soon as they are in a position to do so. The timing of the submission of a payment claim, within the approved deadline, is entirely a matter for the individual farmer and it is up to them when they carry out the approved works. To date, only 2,670 payment claims have been submitted. The Department has actively encouraged all approved applicants to submit payment claims, including by contacting approved applicants individually by text message. I would urge all approved applicants who have completed their works to submit a payment claim as soon as they are in a position to do so.

To date, payments have issued to just under 2,000 cases amounting to over €27.8 million. Payment claims submitted are examined and paid as soon as possible after they have been submitted.Where issues arise with a payment claim the applicant concerned is contacted directly by the Department to resolve outstanding issues. All 11,500 approvals issued represent potential outstanding liabilities for the Department. As regards the addition of generators or any other investment, it is simply the case that until the existing approvals mature to payment stage or the timeframe of the approval expires, then we must wait and maintain a budgetary provision to make payments. There is a commitment which we have made to farmers under the scheme and it is our full intention to honour this commitment.

At this point in time I am not in a position to add generators to the comprehensive list of investment items already approved under the suite of seven existing TAMS measures. I do appreciate the logic behind the Senator's case but I hope he will appreciate that until we know where we stand with the budget commitments, it is very difficult to commit to anything further.

Photo of Tim LombardTim Lombard (Fine Gael)
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I will be very brief as the Minister of State spoke very comprehensively on the issue. It is amazing that out of 11,500 applications only 2,650 have submitted payment claims and only 2,000 have been paid. That suggests to me that by the end of the scheme not all of the 11,500 applicants might be looking for payment as they might not go ahead with the work as they could have changed their mind due to finance or a myriad of issues. In that scenario would the Minister consider adding generators? A suite of measures has been granted but there has been a failure to grant the back-up measure which is key to ensuring that the industry which is so vital can develop.

Photo of Andrew DoyleAndrew Doyle (Wicklow, Fine Gael)
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As I said, a total of €395 million has been allocated for the scheme. Senator Lombard has seen for himself the very low rate of claims for payments submitted so far amounting to €27.8 million, which is less than 10% of the full allocation. The reason for changing from three years to one year was to try to speed it up so that there would be a more real-time assessment. Until we get to that point it will be difficult to commit but it is intended that the money will be spent. In future, there may well be an opportunity to revise the scheme further.