Gerard Murphy (Cork North West, Fine Gael)
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Question 630: To ask the Minister for Agriculture and Food the number of persons who joined the early farm retirement scheme and who now found themselves in a situation in which their assets are seriously devalued; it she will compensate these farmers for their losses; if they will receive a quota from the national reserve; and if she will deal with the fact that the scheme is not indexed. [1032/05]

Mary Coughlan (Donegal South West, Fianna Fail)
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A total of 10,300 farmers joined the first scheme of early retirement from farming introduced in 1994. Some 2,600 farmers have applied under the second scheme that was introduced in November 2000.

In general, the new single payment scheme introduced in Ireland from 1 January 2005 is applicable to farmers who actively farmed during the reference years 2000, 2001 and 2002, who were paid livestock premia and/or arable aid in one or more of those years and who will continue to farm in 2005.

Farmers who joined the 1994 early retirement scheme, which closed to new applications in December 1999, did not farm during the reference period and cannot establish entitlements under the single payment scheme. Where they transferred their holdings by lease, it was the transferees who were actively farming during the reference years and it is they who will have entitlements established for them. A fundamental plank of the single payment system is that entitlements are attached to the farmer who was actively farming during the reference period, not to the land.

During the course of negotiations with the European Commission on the single payment scheme, Ireland secured agreement to an arrangement that will benefit family members or others who now take over holdings that were farmed by third parties who had leased them during the reference period. Farmers who take over such holdings, by transfer free of charge or by a lease of five or more years at a nominal amount, may apply to the national reserve for payment entitlements under the single payment scheme.

Participants in the early retirement scheme launched in November 2000, who farmed during part or all of the reference period, will have entitlements in their own right and can, before 15 May 2005, use the private contract clause to lease these entitlements to the young farmer who holds the lease of their land under the early retirement scheme. In such circumstances, the retired farmer must establish the entitlements in 2005 on a special form provided by the Department. The qualifying young farmer may or may not have entitlements and land in his or her own right.

As regards index linking of payments, the rate of pension payable under the 1994 scheme of early retirement from farming is the maximum provided for by the European Council regulation under which the scheme was introduced. The regulation does not provide for indexation of payments. My Department's proposals for the scheme included provision for annual increases in pension over the period of the plan. The European Commission rejected this proposal and insisted on legal grounds that a fixed rate be set instead.