Select Committee on Agriculture, Food and the Marine
24 February 2015
Opening Statement by Minister Coveney
The agri-food sector is playing a considerable role in our economic recovery. The sector remains Ireland’s largest indigenous industry and accounts for almost one in nine jobs, many in rural and coastal areas where few other employment opportunities exist.
Bord Bia recently confirmed a fifth consecutive year of growth in agri-food exports. The value of Ireland’s food and drink exports grew by some 4% during 2014 and reached almost €10.5 billion, which is another all-time high. This is some €3.2 billion higher than in 2009, an increase of over 45%.
In this context I was pleased to secure an increase of almost €42 million in Exchequer funding compared to 2014 to invest in the agri-food sector.
The Exchequer contribution to the Vote of my Department will amount to €1,260 million in 2015. This figure is made up of €1,044 million in current expenditure and €216 million in capital spending. This is the first in a series of six budgets where the exchequer contribution to the Agriculture Vote will be increased in order to facilitate the implementation of both the Rural Development Programme (RDP) and the European Maritime and Fisheries Fund (EMFF).
Thesecond element to the financing of the sector for this year and the coming years concerns taxation. Following on from the publication of the Agri-taxation review, the Minister for Finance announced, in Budget 2015, a suite of taxation measures which are intended to assist in the modernisation of farming, provide for increased land mobility, assist succession and broaden the period over which income averaging relief may be claimed. These measures are timely and will support the continued development of the sector and our aims under Food Harvest 2020.
In addition to allocated Exchequer funding, Ireland will also receive €1.215 billion in direct funding from the EU for the Basic Payment Scheme. (€7.2 billion over the lifetime of the CAP Agreement (2014 – 2019). Furthermore, the Rural Development Programme, will deliver an additional €4 billion of EU and National funding in the period up to 2020.
My overarching priority for 2015 is to deliver the first part of the Government’s commitments to the farming and fishing sectors in the commencement of actions under the new rural development and seafood development programmes. These supports will prioritise vulnerable sectors and support the incomes of family farms, particularly those areas of natural constraints to which I have allocated €195 million in 2015.
The Rural Development Programme 2014-2020 (RDP) will be a key support in enhancing the competiveness of the agri-food sector, achieving more sustainable management of natural resources and ensuring a more balanced development of rural areas. We are awaiting formal approval of the programme from the Commission. In the meantime, I have secured Exchequer funding of €439 million for capital and current expenditure on RDP schemes. One of the most significant elements of the RDP is the continued commitment to Agri-Environment schemes. In 2015 some €122 million is being provided, €52 million to effectively close out REPS, while €70 million will be paid out under AEOS. Almost 17,000 and 15,000 farmers respectively will receive payments under these schemes. I was pleased to launch the new Green Low Carbon Agri-Environment Scheme, (GLAS) last week. This is intended to build on the success of these earlier programmes and encourage farmers to farm in an environmentally manner. GLAS will be a five year scheme with a maximum payment of €5,000 per annum, with the potential to qualify for a top-up payment of up to €2,000. Funding in 2015 provides for the opening of the scheme to some 30,000 entrants and part-year payments to be made. This scheme, when fully open, will support up to 50,000 farmers and require funding of €250 million.
A strong, focused on-farm investment scheme remains a priority and in 2015 this will be delivered through TAMS 2, the second generation Targeted Agricultural Modernisation Scheme. For 2015 I am allocating some €34m to TAMS, which represents a 100% increase on last year’s budget. This will provide for final payments on TAMS 1, as well as a new Farm Safety Scheme for which I am providing once-off funding of €12million.
2014 was a year when tragedy struck too many Irish farm families. Conscious of the loss of life and injuries sustained on farms in recent years, and particularly during 2014, I opened the Farm Safety Scheme in October of last year. The grant rate is 40% up to a maximum eligible investment ceiling of €20,000, i.e. a maximum grant of €8,000. Almost 6,300 applications have been received in my Department. Over 4,000 of these are already processed and approvals are being issued on a continual basis.
2015 is set to be a momentous year for the Dairy sector. The ending of the milk quota regime next month will free Irish farmers from the shackles of quota. With the opportunity comes the requirement for investment. My Department will be inviting applications to avail of the grant funding for capital investments in 2015, including a new Dairy Equipment Scheme to support the sector in its expansion plans. Similar to the beef sector, I am also proposing the establishment of discussion groups for the dairy sector in 2015 as part of the RDP, though payments under the programme will not be made until 2016. The plan is for 5,000 entrants to dairy discussion groups next year which will serve as an essential learning experience in the post quota environment.
Ireland is the largest net exporter of beef in the Northern hemisphere and this is testament to the efforts of all stakeholders in this vital sector. As a consequence of the importance my Department places on the beef industry, coupled with an acknowledgement of the difficult year experienced in 2014, I have again given particular priority to providing the kind of support that can contribute to restoring confidence to this sector. I am pleased that we were in a position to fund support measures worth in excess of €73 million in 2015.
The cornerstone of this support package is a significant increase in the funding allocated to the new Beef Data and Genomics Programme from €23 million to €52 million. This 126% increase will place Ireland at the international forefront of genetic improvements in beef and will make an important contribution to improving the carbon efficiency of Irish production.
As I announced on Budget day my intention is to have a two-tier payment under the BDGP i.e. €100 for the first 10 animals on the farm and €80 thereafter. Obviously these payments are subject to the agreement of the European Commission in the context of the overall scheme and discussions on these issues are ongoing. The payment levels are also of course subject to the overall budget limit of the scheme.
€9 million will also be paid to approximately 36,000 farmers under the Beef Data Programme. This programme assists farmers in improving the genetic quality of their livestock while maintaining a flow of crucial data to the Irish Cattle Breeding Federation that will generate further advances in cattle breeding at national level. The estimate also includes provision of €1.6 million for the Irish Cattle Breeders Federation to support continued breed improvement in beef and dairy sectors and €0.5 million is being provided to compensate for the removal of persistently infected calves under the BVD Compensation Scheme. I have also allocated an additional €1million to Bord Bia for the marketing of beef.
The ongoing development of the knowledge base in the sector will continue to be supported. The Beef Technology Adoption Programme (BTAP) has been an outstanding success and a further €1m is provided for such payments in 2015. The new Knowledge Transfer measure for the beef sector, provided in the RDP, will also open to farmers next year and I expect payments to be made under that programme in 2016.
The sheep sector continues to experience challenges. Consequently, I am providing funding for a continuation of the Sheep Technology Adoption Programme (STAP) into a third year. This programme provides for the establishment of discussion group among sheep farmers, similar to model used for other groups. Funding of €4million is provided for the programme in 2015. The number of producers participating and the positive feedback from participants attests to the success of the programme to date. I have also announced, as part of the RDP, that the STAP structure will become a Knowledge Transfer Group for sheep from 2016 onwards with an expected 4,000 participants starting that year. I am also maintaining the provision of some €540,000 for the improvement of breeding in the sheep sector through Sheep Ireland.
TAMS II Funding will also be made available for the pig and poultry sectors reflecting the need for investment in these sectors.
I am also prioritising innovation, as part of a the smart agenda through a substantial fund for R&D and Training amounting to €28 million under the FIRM, Stimulus and Forestry funds and Teagasc training courses. I will also be maintaining our focus on food safety and animal health and welfare with a provision of some €82 million overall. Our justifiable reputation for food safety and quality standards has led to the opening of both the American and the Chinese markets to Irish beef in recent months.
In addition to the specific allocations mentioned above, I have provided €144 million to fund Teagasc and Bord Bia in 2015. These agencies, have central roles to play in improving the profitability of the beef sector across the range of their activities.
Taking account of the fact that the Irish bloodstock industry is of enormous economic benefit to this country, I have increased state support to the Horse and Greyhound industry by €14 million to €68 million. It has been estimated, that the industry provides in excess of 14,000 jobs, approximately €1.1bn in economic output and is responsible for exports worth in excess of €200m.
The greyhound industry employs over 10,000 people. Since 2002 in excess of over 10 million people have attended greyhound racing meetings. The industry contributes some €500 million in economic output to local economies around the tracks which have a wide geographic spread.The increase in State support to both industries is in recognition of the significant shortfall in funding going into the horse and greyhound sectors in recent years as a result of the downturn in the economy. With the introduction of the online betting tax, the Government will be providing an additional €6 million a year to the Horse and Greyhound Fund.
I am anxious to unlock the significant potential of the marine sector for export growth and employment. I will shortly be launching Ireland’s new Seafood Development Programme for the period up to 2020. Following months of intense lobbying and negotiation, I secured a contribution of €148 million to Ireland’s Programme from the new European Maritime and Fisheries Fund (EMFF) for the period 2014 to 2020. Together with matching Exchequer funding, this will enable me to launch a €241 million EMFF programme in 2015.
The majority of funding under the new Seafood Development Programme will be focussed on the further sustainable development and growth of our seafood industry. €142 million of the total fund will be available for this sectoral development, which is more than twice the €66 million available under the previous Programme for that same purpose.
The new EMFF Programme will also directly fund €46 million in new investments to support our capacity to enforce the CFP and ensure a level playing field for all fishermen. In addition, €41 million will be provided to improve the science that supports our fisheries management, together with €11 million for implementation of the new EU Integrated Maritime Policy and €1.3 million for storage aid supports.
I am making available €15 million in 2015 to commence investment measures under the new Seafood Development Programme and this will rise significantly in following years as the Programme is fully rolled out.
Separately, I am also making available approximately €9 million in 2015 to complete the final year of the present Seafood Development Programme. I have also allocated some €11.5million of capital expenditure to be invested in fishery harbour works.
Having experienced the positive outcome of the Agri-taxation Review, my colleague the Minister for Finance and I proposed a similar exercise for the Marine sector. Under the Harnessing Our Ocean Wealth Strategy, Government has set a target of doubling the value of Ireland’s blue economy by 2030 and I am keen to ensure there is a supportive financial environment underpinning this target. A working group, led by the Department of Finance and consisting of my Department, the Department of Transport, Tourism and Sport and the Department of Jobs, Enterprise and Innovation will oversee the Review and it will liaise with other Government Departments and agencies, including with the Marine Co-ordination Group.
The Forestry sector receives the largest share of the public capital programme expenditure of my Department and I have provided some €110 million for this purpose in 2015. The Government recently approved a new Forestry Programme up to 2020 the objective of which is to support the planting of over 43,000 hectares of new forests.
The measures I have referred to today demonstrate the Government’s commitment to both the agriculture and marine sectors. We are now in a position to implement actions under the new Rural Development and Seafood Development Programmes that will leave a lasting legacy in these sectors and make a huge contribution to the further development of these important pillars of Irish society and the Irish economy.