Éamon Ó Cuív (Galway West, Fianna Fail)
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14. To ask the Minister for Agriculture, Food and the Marine if he will introduce a sheep direct payment as suggested by some farm organisations; and if he will make a statement on the matter. [2307/16]

Simon Coveney (Cork South Central, Fine Gael)
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The Teagasc Annual Review and Outlook for 2016 indicates that in 2015, the direct costs of production per kilo of lamb carcass produced on the least profitable sheep farms are almost 45 percent higher than the costs per kilo on the most profitable mid season lamb enterprises.

Supports for the sector include direct payments, but also necessarily include a range of measures under the Rural Development Programme to support environmentally sustainable production, and also improve efficiency and profitability on farm to help to address this efficiency gap. These include the Basic Payments Scheme, which incorporated payments under the former Grassland Sheep Scheme, provided exclusively for the sheep sector.

In addition, a range of schemes under the Rural Development Programme (RDP) 2014 -2020 have been designed to support the sheep sector. Sheep farmers continue to be significant beneficiaries from the Areas of Natural Constraints (ANC) scheme. The ANC Scheme is worth €195 million annually to some 100,000 farmers and in excess of €1.3 billion over the life time of the RDP. In addition, the GLAS scheme will benefit sheep farmers, many of whom qualify for priority Tier 1 access to GLAS as a result of their Priority Environmental Assets, which include Natura land and Commonage.

Increased provision has also been made for improving efficiency and profitability in sheep production under Knowledge Transfer Groups. It is expected that the sheep Knowledge Transfer Groups will commence in the first quarter of 2016. A range of capital supports for sheep farmers is also available under the TAMS II scheme, including grant aided support for sheep housing and both mobile and fixed handling equipment for sheep. My Department also funds the activities of Teagasc, Bord Bia and Sheep Ireland in the areas of research, advice, education, breed improvement and marketing and promotion.

In relation to a further direct payment per ewe, such a coupled payment would generally come from the CAP “pillar 1” direct payments funded by the EU. This would involve cuts in other farm payments as the overall pillar 1 funding envelope is strictly defined. A nationally funded payment would raise issues of exchequer funding availability and would also have to pass a strict EU state aid test. Finally, funding under CAP pillar 2 / RDP is already being provided as outlined already. Any consideration of further funding for the sheep sector under the RDP could only be considered within an overall review of RDP implementation when a full examination is undertaken of the performance of all existing measures and any emerging priorities.

The sheep sector is an important component of our agriculture sector and the third largest farming sector in Ireland with over 34,000 producers. 2015 proved to be another good year for the sheep sector. A combination of higher carcase weight (up 1.9%) and higher factory prices (up 1.5%) meant that output value of the sector increased by over 3%.

Total sheepmeat exports increased by an estimated 5% to €230 million between 2014 and 2015. At farm level, prices reached highs not seen in five years and thankfully these strong prices have continued into this year.

Growth in the sheep and hill farming sector will come from an increase in consumer demand and export market opportunities as well as from improved technical efficiencies. My Department continues to search for new markets in cooperation with Bord Bia, Irish Embassies abroad and the meat industry. Last year Commissioner Hogan set up the Sheep meat Reflections Group to examine the sheep sector and the support it needs going forward in order to continue to make an important contribution to agricultural output and to fragile economic areas. Ireland is participating fully in the new group and it is hoped that their deliberations will contribute to ensuring the sustainability of the sector into the future.