DÁIL ÉIREANN PRIVATE MEMBERS’ BUSINESS

SPEECH BY THE MINISTER FOR AGRICULTURE, FISHERIES AND FOOD, BRENDAN SMITH TD – 2 DECEMBER 2008

Ceann Comhairle, I wish to share my time with Deputies Niall Collins, Margaret Conlon and Johnny Brady.

I move the following amendment to the motion:-

To delete all words after “Dáil Éireann” and substitute the following:

“notes that:

-total expenditure in 2009 by the Department of Agriculture, Fisheries and Food, including EU funding, in support of the agriculture, fisheries, food and forestry sectors, will be €3.26 billion, in recognition of the role the sector has to play and the enormous contribution it makes to the Irish economy;

-record funding of €355 million is being provided for REPS in 2009, including a seventeen per cent increase in REPS 4 payments;

-the suckler cow scheme represents a new stream of income which will deliver €33 million to Irish farmers this year, €44 million in early 2009 and €173 million over the remaining three years of the scheme and that the full commitment entered into in Partnership to provide funding of €250 million over five years is being honoured in full;

-€220 million will be paid in disadvantaged area scheme payments in 2009, bringing to €2.3 billion the amount paid under this scheme to Irish farmers this decade;

-the CAP Health Check represents an excellent outcome for Irish farmers that

  • will deliver €170 million for Irish farmers over the next five years, including €100 million in additional milk production;
  • ensures that the key market management mechanisms, which are very important to Ireland, have been left completely unchanged, including intervention schemes for butter and skimmed milk powder;
  • secures access to previously unused EU funds that will provide over €70 million over four years in additional money that will go directly into the pockets of Irish farmers;
  • ensures that Irish farmers will not lose one cent as a result of the increase in modulation, which will see €120 million transferred to the rural development programme over four years, and that the single farm payments of over 50,000 Irish farmers will not be affected;

commends

-the Government’s achievement in securing an increase of the age limit for testing for BSE to 48 months, which will deliver a multi-million euro saving for Irish farmers

-the Minister’s decision to apply for brucellosis-free status for Ireland as a recognition of the tremendous efforts made to reduce [and eliminate] the incidence of the disease in recent years; and

acknowledges

-the contribution that the Irish agri-food and drink sector makes to the Irish economy, accounting for 9.7 per cent of exports, worth an estimated €9.2 billion, and 8.2 per cent of total employment and that generated an operating surplus in 2007 of €2.6 billion; and

-the Government’s continuing commitment to, support for and development of this most important indigenous sector.

Introduction

It’s now almost two months since the Budget and there have been some very significant developments since and more are on the horizon that will impact on Irish agriculture. These developments present both challenges and, more importantly, opportunities, for Irish farmers and the Irish agri-food sector. The sector operates in a dynamic, ever-evolving environment that requires flexibility and an ability to adapt to change.

Significantly, the Council of Agriculture Ministers has recently concluded negotiations on the CAP Health Check, which represents a very successful outcome for Irish farmers while only last Friday I was in Brussels for a wide-ranging discussion on the future of the Common Agriculture Policy after 2013 and emphasised my strongly-held view that there will be a continuing need for an active and appropriately resourced European agricultural policy to achieve the EU’s policy objectives for the agriculture and food sector and to help our farmers and processors to adapt to the new and emerging challenges.

The circumstances that applied at the time of the Budget demanded that the Government address the sharp deterioration in the public finances and we have chosen a direction based not on soft options, quick fixes or political expediency. The choices we make will determine whether we can maintain to the greatest possible extent the economic progress we have achieved in the last decade Would anybody have thanked us if we had eschewed our responsibility and abandoned long-term responsibility in favour of short-term populism ?

There have been times in the post-Budget debate that people seem to have forgotten the basic fiscal fundamentals. The economic situation is such that we have less money to meet growing public expenditure demands. We cannot borrow our way out of trouble or return to the days of punitive tax rates that stifled economic growth and resulted in high unemployment. Our day-to-day expenditure next year will exceed revenue by €4.7 billion, this equates to over €1,000 for every man, woman and child in this country. We cannot and will not return to the days of reckless budgetary management that we experienced in the 1980s.

Budget 2009

Given the resources available to me, I had to make choices and identify priorities for 2009. This meant having to make difficult decisions but I am satisfied that, in the circumstances, I made the right decisions. Given some of the reaction to the Budget measures I announced, one would be easily excused for forgetting that my Department will be spending €3.26 billion in support of Irish agriculture, fisheries, food and forestry in 2009. This level of expenditure ensures that record funding of €355 million will be provided for REPS – a seven per cent increase in overall funding and a seventeen per cent increase in payments under REPS 4.

Next year’s level of spending also ensures that the commitment, entered into in Partnership, to provide €250 million over five years for the suckler cow welfare scheme will be honoured in full. To suggest anything other than that this commitment is being honoured is misleading and disingenuous. I read, earlier this week, claims that 12,000 farmers will take a hit on their suckler payment. I do not accept this, as the suckler payment is a new stream of income for farmers with the first payments only having been made in the past few weeks. €33 million will have been paid before the end of this month and a further €44 million will be paid in the early months of the New Year.

It is the case that, regrettably, I did have to reduce expenditure on the disadvantaged area payments scheme, but I do not accept claims about the extent of the impact of that decision on overall farm incomes. In the first instance, two thirds of disadvantaged area payment recipients will experience no reduction in their payment levels. Secondly, I consciously protected the smaller-scale farmers by ensuring that no farmer with less than 34 hectares or 84 acres will have their payment reduced. The average-sized holding is 31 hectares. Given the contribution of the disadvantaged area payments to overall farm incomes, I cannot accept that the level of reduced expenditure in 2009 will have the impact that some would claim.

CAP Health Check

Last month, my EU colleagues and myself concluded several months of negotiations on the CAP Health Check. The outcome was a particularly satisfactory one from an Irish point of view and included a number of notable achievements for Ireland. As with all negotiations of this nature, we didn’t get everything we would have liked but we did achieve an outcome that will be worth some €170 million to Irish farmers over the next five years and have ensured a ‘soft landing’ for the Irish dairy sector, which is particularly important given the abolition of milk quotas in 2015.

The outcome in relation to milk quotas will result in a quota increase of the equivalent of 500 million litres by 2014, when compared with 2007. Based on existing milk prices, the value of these production rights amount to some €100 million. Despite the current price for milk, I’m confident that the long-term outlook is positive and that the Irish dairy sector is well-equipped to take advantage of the opportunities that will result from growing prosperity in developing countries as well as increasing population trends, with the world’s population expected to grow by almost 800 million over the next decade.

Unfortunately, price volatility now seems to be a fact of life but I note the recent assessment from Teagasc that “medium-term prices in real terms are expected to be significantly higher than they were in the 10-15 years before last year.” Ireland needs to be in a position to take advantage of the opportunities presented by such developments and I believe the outcome of the milk quota aspect of the Health Check takes us in the right direction.

The Government is also investing significantly in the dairy processing industry, through the Dairy Investment Fund, to ensure it has the capacity and ability to process the increased production that I believe dairy farmers will be more than capable of producing.

I had identified the maintenance of market supports as a particular priority, given Ireland’s seasonal pattern of production and, despite significant opposition, I secured agreement to the retention of intervention for butter and skimmed milk powder, without losing the compulsory purchase at the intervention price of the first 30,000 tonnes of butter and 109,000 tonnes of SMP. Coupled with the retention of private storage aid for butter, in its current form, this was a very significant achievement.

A further priority of mine was to secure national discretion for the operation of specific supports funded from the single payment ceiling. I’m particularly pleased that we succeeded in this aim. I was one of the first to press for this initiative and the deal agreed means that a minimum of around €23 million in new money will be available to Irish farmers from 2010, with a much smaller amount available in 2009.

I have invited the farm organisations to meet me later this month to discuss how best this new money can be used and a date for a meeting has now been fixed. While I do think it important that I get the views of the stakeholders, I don’t intend that this will be a lengthy process and I expect to be in a position to come to an early decision following the forthcoming meeting.

I have previously expressed my concern for the sheep sector in particular and I have repeatedly acknowledged that this is a sector that needs support, given its importance. I am particularly conscious of the decline in production in recent years and in demand this year.

My position in relation to the sheep sector has been consistent and remains exactly as I outlined at the Limoges conference and more recently when I addressed sheep farmers in Tullamore where I said that “I want to ensure that the changes in the Health Check open the possibility for some useful action in the sheep sector”.

I have not, despite claims to the contrary, backed away from any commitments to Irish sheep farmers. It is a sector that remains a priority and one that needs assistance and I have no doubt that proposals to support the sheep sector will form a central part of the discussions to which I have invited the farm organisations later this month and I look forward to that dialogue and giving full consideration to the proposals made, including those that have been publicly articulated recently.

CAP Post 2013

Having concluded agreement on the CAP Health Check, the Agriculture Council met only last Friday for an initial consideration of the CAP post-2013. I restated my firm conviction that Europe needs a strong agricultural production base and outlined my concerns that any reduction in food production in the EU would be taken up elsewhere where less efficient production systems exist and would result in a heavier carbon footprint. I emphasised the continuing need for an active and appropriately resourced European agricultural policy to achieve the EU’s objectives for the agri-food sector and to help Irish and European farmers and processors to adapt to the new and emerging challenges. I also stressed the need for effective rural development programmes which play a key role in regional development and in the protection of the environment and the critical importance of equivalent standards for imports from outside the EU.

Animal Health

Improved animal health standards continue to be very important generally and more specifically for farmers and the livestock industry. Consequently, I am very pleased to be in a position to say that considerable progress has been made in dealing with two very important diseases that have had a significant impact here in the last decade - namely BSE and Brucellosis.

In relation to BSE, it has been a particular priority of mine and of my predecessor, An Tánaiste Mary Coughlan TD, to have the age for BSE testing raised significantly. I have long been of the view that the current testing requirements - which are fixed at EU level - are excessive. Consequently, one of the first things I did when I became Minister was to write to the EU Commissioner to press her to increase the age for BSE testing as a priority matter. I also raised this personally with the Commissioner at a meeting here in Dublin.

I am therefore very pleased that the Commission has now agreed to raise the age for testing to 48 months from 2009. The new arrangements will mean some 400,000 fewer BSE tests on cattle resulting in a significant saving for farmers and the industry - as a minimum, savings of €8m a year.

Excellent progress has also been made on Brucellosis in recent years. From a situation where recently we had more than 1,000 herd breakdowns in a single year, there have been no confirmed outbreaks of brucellosis in Ireland since April 2006. This is most welcome progress and it enables me to apply to the EU for officially Brucellosis free status early next year. The progress made is due to a number of factors, not least of which was the full cooperation of all stakeholders with the eradication regime, which has included comprehensive testing, depopulation and other arrangements.

Securing officially brucellosis free status will enable me to reduce some of the control elements of the eradication programme bringing consequential benefits for farmers, particularly in relation to trade. In addition, it will be possible to bring about a gradual reduction in the level of testing that will, over time, lead to reduced testing and lower costs for farmers.

However, we need to take a cautious approach in view of the current disease situation in Northern Ireland. Accordingly, I envisage a controlled reduction in the programme over a period of years, based on risk assessment, following the achievement of disease free status for the country. My Department is engaged in consultations with the farm organisations and other stakeholders with a view to finalising a roadmap for the scaling down of the programme over the next few years.

I believe that achieving officially Brucellosis free status would be a landmark in the history of disease eradication in Ireland and I am grateful for the co-operation of all of the parties who had contributed to the success to date.

I was particularly pleased that I was in a position last week to announce interim arrangements to facilitate progress on the proposed industry-led Herd Health Initiative. This involves among other things, the establishment of a dedicated, industry-led, national co-ordinating body to be known as Animal Health Ireland and delivers on another of the important commitments in the Programme for Government.

It is envisaged that this body will operate as a partnership between industry, service providers and Government and will have two broad aims namely –

  • To determine and, on an industry-wide basis, obtain agreement on a range of animal health interventions capable of enhancing on-farm productivity and the competitiveness of the Irish livestock industry in international markets, and
  • To develop and co-ordinate the national infrastructure that will be needed to enable industry at all levels to take appropriate and effective action.

The intention is that Animal Health Ireland will be managed by a Steering Group that will act as the Board of the organisation. In order to facilitate a prompt start, I have put in place an interim Steering Group which will be chaired by Mike Magan, who brings a wealth of experience to the position. The remaining members of the Group will comprise individuals with skills and competencies such as livestock farming, veterinary science, agricultural economics and international marketing.

The Steering Group will report to a Stakeholders Group which will be representative of farming bodies, dairy co-ops and service providers and will have overall responsibility for the strategic direction, structure and financing of the organisation. The organisation will have a small number of Executive staff responsible for implementing agreed strategies. Future arrangements for the Steering Group, staffing and organisation of the body, will be a matter for the industry.