Denis Naughten (Longford-Roscommon, Fine Gael)
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Question 391: To ask the Minister for Agriculture and Food the reason a biofuel processor must provide her Department with a bond before processing a biofuel crop; her views on whether this inhibits new entrants to the sector; if she will review the need for such a bond; and if she will make a statement on the matter. [16377/06]

Mary Coughlan (Donegal South West, Fianna Fail)
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Council Regulation (EC) No. 1782/2003 of 29 September 2003 provides, inter alia, for the payment of Aid for Energy Crops, at a rate of €45.00 per hectare, in respect of products considered as biofuels and as listed in Article 2.2 of Council Directive 2003/30/EC. Commission Regulation (EC) No. 1973/2004 lays down the detailed rules for the application of Regulation 1782/2003, Chapter 8 of which deals specifically with the scheme of Aid for Energy Crops and provides for the payment of the aid to applicants before the raw material is processed. The aid, which is payable in addition to the Single Payment, is granted in respect of areas where production is covered by a contract between the farmer and a processor, except in the case of processing undertaken by the farmer on his/her holding. Where payment in advance is made, however, an appropriate security must be lodged, as guarantee that the scheme requirements will be complied with. This system of advance payments, secured by bonds, is common to very many EU schemes and is vital in releasing payments to scheme participants at the earliest possible date.

As part of the EU Strategy for Biofuels, it is intended to review the operation of the Energy Crops Scheme during the coming year and in that context I will be seeking to have the Scheme made more attractive for farmers.