Clare Farmers to pay a huge price for Governments failure to extend Farm Waste Management Scheme.

October 23rd, 2008 - Pat Breen

Speaking during the Dail Debate on a Fine Gael Motion calling on the Minister for Agriculture to exend the date for completion of works under the FWMS Deputy Breen said ” Like everybody else, the farming community suffered in last Tuesday’s budget and took a huge hit.  I was amazed to hear Deputy Treacy state that Fianna Fáil is the farmers’ friend.  Where was he last Tuesday when the budget was announced and the early retirement scheme and the installation aid for young farmers were axed, the suckler cow scheme was reduced and other stealth taxes were introduced including removing medical cards from elderly farmers?

  Deputy Creed’s motion is timely.  Are our farmers expected to take a further hit?  I am sorry the Minister for Agriculture, Fisheries and Food, Deputy Brendan Smith, is no longer in the Chamber.  When he served his time in the Department of Agriculture, Fisheries and Food as a Minister of State he visited the World Ploughing Championships in Co. Carlow and urged all farmers to sign up to this scheme.  It is ironic that now that he has the top job he is refusing to budge and extend the date with the result that many of the people he encouraged to join will be excluded.

  Some of the Fianna Fáil backbenchers have issued press releases in recent times reminding farmers about the deadline and even calling for the scheme to be extended.  It is a typical Fianna Fáil tactic to act like it is in opposition and blame Europe.  Farmers do not need to be reminded about the deadline.  They are well aware of the D-Day.  What they want is an announcement that the date will be extended.  I urge Fianna Fáil backbenchers, particularly those who spoke today, to think seriously about what they say.

  I see in these morning’s newspapers that the backbenchers are unhappy with the situation regarding medical cards for the over 70s.  It is time for the backbenchers in Fianna Fáil to stand up and be counted.  Will they continue with their age-old Fianna Fáil double-speak, saying one thing in the constituency and the opposite when they come to the Dáil in Dublin?

  The current scheme has been a major success and has made a significant contribution in terms of improving the environment.  I am amazed that the Ministers from the Green Party have not been in the House to show a greater interest in this debate, considering the concerns they have for the environment.  The environment is their hobby horse.  These days, they are only concerned with pushing bicycles and changing light bulbs.

  The scheme has been a major boost to the construction sector and it can make an even more significant contribution to this industry now that it is in crisis.   At the height of the boom it was impossible for farmers to get work done.  To compound this, the bad weather placed further strain on farmers trying to get this work done.  As my colleague, Deputy Carey, stated, none of us need to be reminded about the extraordinary weather we had, particularly in August when villages and towns throughout the country were flooded.

  I have been inundated with requests from farmers about problems which existed with regard to planning applications.  They were concerned they would not meet the deadline and are under enormous pressure.  The reality is that this is about funding.  The Government has failed to have meaningful discussions with the EU Commission on behalf of Irish farmers.  It is time it came clean with the Irish electorate and the Opposition parties.  The Minister is trying to save Exchequer funds and deny farmers their entitlements.

  Earlier this year we saw the Department huff and puff on whether to support Irish farmers at the WTO talks and the only reason it was eventually embarrassed into supporting them was to try and secure a “Yes” vote for the Lisbon treaty.  Many farmers fear that they will not be paid because the allocation for the scheme has already been spent this year.  I urge the Government to ease the pressure on the farming community and make a case to the European Commission on extreme hardship and the Green Party should be included.  Europe needs us.  Europe does have a heart and the Government should not blame it for this.  Otherwise, the farmers of County Clare and elsewhere will pay a huge price for its inaction in not protecting the agricultural industry in this country.

 

Minister for Agriculture, Fisheries and Food (Deputy Brendan Smith

Thank you.  Deputy Deenihan and other speakers referred to the fact that perhaps up to 12,000 farmers would not have their projects completed by the end of the year.  To clarify, of those who applied for on-farm investment schemes over the years, approximately 80% proceeded with the projects, leaving a shortfall of 20%.  The Irish Farmers Association carried out a survey which showed a drop-out or non-take-up rate of approximately 18%.  That would bring the number of applicants likely to go ahead with their work to approximately 34,000.  The Department has received in excess of 31,000 A cards, which indicates that more than 31,000 projects—– The figure of 12,000 has been bandied about but I do not know where it came from.  I just want to correct this issue.

 I am explaining the normal take-up, which Deputy Deenihan would have known from his time as Minister of State in the Department.

  I welcome this opportunity to restate the tremendous success of the farm waste management scheme as an indication of the Government’s support for the farming sector in Ireland through an unprecedented level of investment.  As Deputies will be aware, a revised version of the scheme was introduced by my Department in March 2006 to assist farmers in meeting the requirements of the EU nitrates directive.  The revised scheme followed the introduction of an original scheme introduced in 2001, which was revised in 2004.

  The revised and improved scheme was introduced in the context of the finalisation of Ireland‘s nitrates action plan which had been approved by the Commission.  The major changes introduced to the scheme in March 2006 included an increase in the standard grant rate to 60% from the previous 40%, the extension of the scheme for the first time to the pig and poultry sectors, an increase in the maximum eligible investment ceiling from €75,000 to €120,000 and the removal of any minimum income requirement, subject to certification of economic viability, so that all small farmers could participate.  A higher grant rate of 70% was available to farmers in the four zone C counties of Donegal, Cavan, Monaghan and Leitrim. Additional support was also available to young farmers in particular circumstances.

  Due to the exceptionally generous level of the grant rates, the scheme required specific EU state aid approval before it could be introduced.  Negotiations with the European Commission were lengthy and detailed as we sought to secure the most favourable outcome possible for Irish farmers.  The specific situation in Ireland was central to our negotiating position at the time.  In granting the extension, the Commission took into account the likely high number of applicants for the scheme, the 100% pre-approval inspection by the Department, the restrictions because of bad weather on the construction of farm buildings and that, as most of the applications involved new building, planning permission would be required before any application could be considered, and the shortage of building contractors at the time.  Deputies on the Opposition benches referred to the fact that the construction industry is not working at that capacity currently – far from it.

  The European Union state aid approval, which included the deadline for completion of works by 31 December 2008, was based on the clear and often-repeated understanding that the scheme represented a once-off opportunity to enable Irish farmers to meet the requirements of the nitrates directive.  In doing so, they would also, of course, be protecting their single payment scheme entitlements, which are now subject to cross-compliance requirements.

  The closing date for the submission of applications was 31 December 2006.  The scheme proved to be extremely attractive to farmers.  A total of 48,580 summary applications were received from farmers prior to the closing date, of which more than 30,000 were received in the final month before the deadline.  To accommodate as many farmers as possible, the Department allowed farmers to submit fully documented applications up to 29 June 2007.  This flexibility ensured that all farmers who wished to avail of the scheme were afforded every opportunity to do so.  A total of 46,132 completed applications were received and about 42,500 approvals to commence work have issued.  The facilitation of applications is in direct contrast to the misleading comments made by Deputy O’Mahony.

  The scheme has been an outstanding success, as demonstrated by the high level of applications received and approvals granted.  In the 2008 Estimates we provided funding of €150.6 million, with a commitment to keep that figure under review until we had a clearer picture of what our liabilities would be for the year.  Already, I have ensured that savings of €31.2 million from elsewhere in my Department’s Vote have been reallocated to supplement the original allocation.

  However, on the basis of the information available to my Department, in terms of confirmed completions and indications of ongoing work, we sought additional funding.  I am very pleased, first, that the Government recognised the value of this scheme and provided substantial funding this year and, second, that in the current economic circumstances, the Minister was prepared to provide an additional €195 million to meet our liabilities, which was approved by this House last week.       Deputy Connaughton should allow me to continue.  By the end of last week, the Department had paid out €212.7 million in grant aid this year alone.  That is in great contrast to the statement issued by Fine Gael in August that no payments would be made between the end of August and December.

 

   Deputy Michael Creed: That is only because of the Supplementary Estimate.

 

   Deputy Brendan Smith: No.  Funding was issued at that time under the original Estimate.  Again, we have misinformation from the Opposition.

 

   Deputy Seymour Crawford: The payments were frozen.

 

   Deputy Brendan Smith: They were not frozen.  All farmers who complete approved work in accordance with the terms and conditions of the scheme can be assured they will receive grant aid.  Total expenditure in 2008 on this scheme will be approximately €377 million.  That follows on expenditure of almost €114 million in 2007 and a provision of €125 million for the scheme next year.  That is further evidence of the Government’s continuing strong commitment to the farming sector and represents a massive level of public support by any standards.

  Besides exercising prudence in the use of the funding available we must focus investment on measures that will contribute to the development of a sustainable agrifood sector.  The scheme meets those important criteria.  We must compete on the basis of quality, productivity and efficiency and ensure that we meet the needs of consumers and society generally.  We must also ensure that the sector operates in a manner that is consistent with the preservation of the natural environment.  This major investment by Government and by the farming community in the past two and half years will be beneficial for many years to come.

  Investment in the farm waste management scheme is consistent with all of those priorities.  The scheme represents the biggest ever investment in farm infrastructure and is an enormous vote of confidence in the sector, as too is the investment being made by farmers.  That is well justified on the basis of our export performance.  In each of the past two years Irish agrifood exports rose by more than 10% and 5%, respectively, to reach in excess of €9.2 billion in 2007.  More importantly, a recent analytical study showed that the agrifood industry contributed over 30% of net foreign earnings from the manufacturing sector.

  While commodity prices have eased somewhat in 2008, following the peaks of 2007, the medium-term price outlook remains strong and there is general agreement from both the OECD and the FAO that prices are unlikely to return to their historically low levels prior to that recent period.  It is estimated that global demand for meat and milk will double over the next 40 years and Irish agriculture, with the benefit of the investment under the farm waste management scheme, will be well positioned to take advantage of these trends.

  The Department has operated the scheme in a pragmatic manner in so far as possible.  It has shown maximum flexibility in facilitating the receipt of completed application up to end June 2007.  That ensured every farmer wishing to participate in the scheme had the opportunity to do so.  The high number of applications received and approvals granted confirm that.

  The EU state aid approval, to which I referred, allowed us, as an exceptional measure in the context of the nitrates action plan, to offer very generous grant aid under the scheme as a once-off concession on the strict condition that works would be completed by end 2008.  Agreement was reached only after protracted negotiations with the European Commission and the closing date was a key element in the negotiations on the state aid approval.  We agreed at the time to abide by the date and we have operated the scheme on that basis from the outset, as has the Department of Agriculture and Rural Development in Northern Ireland in respect of its less generous scheme.

  The position in regard to the deadline was made clear from the start.  It was included in the terms and conditions of the scheme and was widely publicised to all those involved.  Farmers, planners and builders were clearly aware of the critical need to adhere to it.

 

   Deputy Seymour Crawford: The weather changed that.

 

   Deputy Brendan Smith: The special situation of Ireland, including circumstances such as bad weather, referred to earlier, were fully taken into account and were obviously a significant factor in achieving the exceptional extension.

  I and my predecessor have consistently stressed to farmers the need to meet the deadline.  In recent weeks the Department wrote to every applicant outlining the possibility of completing discrete units of work so that people who did not wish to complete the entire project as originally envisaged could complete parts of the project and receive grant aid for that work.

  Deputy Tom Sheahan suggested that Department officials dealt with representations on the basis of the political source from which they came.  I presume he does not want that allegation to remain on the record.  I am sure he would not cast political aspersions on the work of individuals.  That is not the way the officials in the Department work.