Denis Naughten (Roscommon-South Leitrim, Fine Gael)
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Question 131: To ask the Minister for the Environment, Community and Local Government further to Parliamentary Question No. 21 of 14 April 2011 and the subsequent supplementary responses (details supplied), if he will outline the progress made to date in resolving the issues between the two Departments; and if he will make a statement on the matter. [12013/11]

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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The European Commission has confirmed that support/grant aid for adding value to agrifood products is not eligible under Axis 3 of the Rural Development Programme (RDP). Basic agricultural products are listed in Annex 1 to the EC Treaty and are commonly called Annex 1 products. Under the main Rural Development Regulation 1698/2005 support/grant aid for adding value to Annex 1 products is facilitated under Axis 1 of the programme.

As a result of this, grant aid under Axis 3 of the RDP for this type of activity has been suspended. My Department and the Department of Agriculture, Fisheries and Food are currently working together with the support of the European Commission to resolve the issue, and discussions are ongoing with a view to reaching a solution as soon as possible.