Patrick O'Donovan (Limerick, Fine Gael)
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Question 244: To ask the Minister for the Environment, Community and Local Government if he has considered an option (details supplied) as an employment creating initiative; and if he will make a statement on the matter. [38792/11]

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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The Rural Development Programme 2007-2013 (RDP) is divided into 4 Axes. Axis 1 deals with competitiveness of the agricultural sector, Axis 2 aims to improve the countryside and environment and the objectives of Axis 3 are to support the diversification of the rural economy and improve the quality of life in rural areas. Axis 4 or the LEADER Axis provides support for the use of a "bottom up" approach to development which ensures that local people are involved in the decision making thereby facilitating sustainable development in a more inclusive way. In Ireland the LEADER approach is used to implement Axis 3 measures.

A significant number of projects funded under the previous LEADER+ programme (2000-2006) and under the Diversification and Business Creation measures of the current RDP involve support for enterprise initiatives that add value to agri-food products. 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. At the start of this year Ireland was notified by the European Commission that support/grant aid for adding value to agri-food products is not eligible under Axis 3 but rather under Axis 1 as detailed in the regulation. As a result of this, grant aid under Axis 3 of the RDP for this type of activity is currently suspended.

A significant part of enterprise activity in rural areas focuses on food and food- related businesses and the continued provision of support for these businesses is critical as we look to ways to generate employment in rural Ireland. I acknowledge the role these businesses play in the economy of rural Ireland and I am aware of the seriousness of this issue. My Department continues to work with the Department of Agriculture, Food and the Marine to seek a solution as soon as possible.

I am not in a position to make any decisions regarding additional funds for the types of project referred to at this time. Any such decisions will be made in the context of the overall budgetary situation in due course.