Denis Naughten (Longford-Roscommon, Fine Gael)
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Question 225: To ask the Minister for Agriculture and Food if she will introduce a specific single farm payment reserve fund to allocate a top payment to those who fared poorly under the national reserve allocation due to the DED averaging system; and if she will make a statement on the matter. [8808/07]

Mary Coughlan (Donegal South West, Fianna Fail)
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The position is that the Single Payment Scheme is applicable to farmers who farmed during the three-year reference period 2000-2002, who drew down livestock or Arable Aid premia in at least one of those years and who continued to farm in 2005. The Single Payment Scheme entitlements established for individual farmers, therefore, are a true reflection of their farming activity and premia draw-down during the reference period. Special provisions were made for farmers (including young farmers) who entered farming for the first time in either 2001 or 2002. Their Single Payment was determined based on the average of the years 2001 and 2002 or on the basis of premia paid in 2002 as appropriate.

The EU regulations also provided for the setting up of a National Reserve. In Ireland's case, the Reserve was created by reducing each farmer's individual Single Payment by an amount of up to 1.82%. The purpose of the National Reserve is to try and minimise the impact on farmers who, for a variety of reasons, may find themselves disadvantaged in the transition to the new decoupled support regime as a result of changes in their businesses during or since the reference period. There were mandatory and non-mandatory categories of farmers catered for when working allocations under the 2005 National Reserve. The mandatory categories included those who inherited land that was leased out during the reference period, those who made investments in production capacity or purchased or leased land on a long-term basis or who converted from dairying to a sector for which a direct payment would have been payable during the reference period. The non-mandatory categories were those dealing with new entrants and certain hill sheep farmers who were prevented from increasing production during the reference period pending the publication of commonage framework plans. Separate application arrangements were in place for this latter group.

In allocating entitlements to successful applicants in the mandatory categories the Member State must apply objective criteria and ensure equal treatment between farmers. In allocating entitlements to successful applicants in the non- mandatory categories the Member State must ensure that the allocation does not have the effect of increasing the value of any existing entitlements above the regional average value of entitlements. Similarly, the value of any new entitlements allocated to non-mandatory categories must not exceed the regional average. The Member State was allowed to determine what constituted the regional average.

I established a Single Payment Advisory Committee comprising representatives of the farming organisations, Teagasc and officials from my Department to assist me in considering the objective criteria that should be used in making allocations from the reserve to the mandatory categories and also the most appropriate way to determine the regional average value of entitlements in the case of the non-mandatory categories. Having considered the Committee's views, I decided that the regional average value of entitlements would be the average value of entitlements in the District Electoral Division (DED) associated with the applicant's herd number. This was considered to be a reasonable interpretation reflecting, as it did, the average value of payment entitlements and therefore the average farming activity in the DED concerned during the reference period.

The total amount of money available for distribution under Ireland's 2005 National Reserve was some €22.7m of which some €18m has already been allocated. Any remaining balance will be carried forward to the 2006 and subsequent years' Reserve. In this connection the Member State is only obliged to have one mandatory category from 2006 onwards for farmers who inherited land that was leased out during the reference period. However, I have arranged that new entrants to farming would again be catered for under the 2006 National Reserve.

I'm sure the Deputy will appreciate that the National Reserve is a scarce resource created by reducing the entitlements of existing farmers and will only be replenished by a claw-back on sales of entitlements and the relinquishing of any entitlements that remain unused. My Department must, therefore, be prudent in determining how the funds in the reserve are administered. I have no plans therefore to create a new reserve as suggested by the Deputy.