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 Header Item Dairy Sector (Continued)
 Header Item Agriculture Schemes Expenditure

Thursday, 13 December 2012

Dáil Éireann Debate
Vol. 786 No. 3

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(Speaker Continuing)

[Deputy Simon Coveney: Information on Simon Coveney Zoom on Simon Coveney] We want to provide similar sustainability claims for dairy production in Ireland. Bord Bia is working with all the interested parties and farming organisations to ensure we get buy in from farmers and that we insulate the Irish dairy industry from price volatility in the future on the basis of quality and the data we collect which can prove sustainability.

Deputy Seamus Kirk: Information on Seamus Kirk Zoom on Seamus Kirk I thank the Minister for his comprehensive reply. In his preamble to the points he made about the proposed scheme, he said the background to this is Food Harvest 2020 and the projected increase in diary production in Ireland. I understand Teagasc has prepared expansion plans for the dairy industry and the plans indicate it will be expensive to expand. This industry, by its nature, is capital intensive and there is a low margin return on the money invested in it. When the inevitable price volatility that will arise for the dairy sector is injected into the mix, any proposal that will increase costs for the farmer, or a combination of farmers in partnership arrangements, is dangerous territory to approach.

Is the model of the proposed scheme a template taken from somewhere else? Has it been modelled on a template in some other jurisdiction across the Community? For instance, will the authorities north of the Border have a parallel scheme running alongside our proposed scheme? The core question is the additional cost that will be imposed on farmers who will be stretched financially to meet the expansion objectives set out in Food Harvest 2020.

Deputy Simon Coveney: Information on Simon Coveney Zoom on Simon Coveney The best way farmers can insulate themselves from the price volatility that will happen in the future is to ensure Irish product get differentiated from other product. Let us not forget that more than 85% of all the milk we produce is exported in various forms, be it infant formula, skimmed and semi-skimmed milk, cheese, yoghurts and all the other products in which milk is an ingredient. If we are to be able to demand a higher price for our product in the future, which we will need to do, and move away from being a commodity producer of volume to being a quality producer of volume, targeting the top 10% price area in the new markets we are exploring, we have to be able to stand over the way in which our food is produced. The sustainability and quality programme will not cost farmers a great deal of money, in fact it will help them to run their businesses more efficiently. If a farmer is using less water, has more feed conversion efficiency and more efficient grazing management, his business will be more efficient and sustainable. The combination of those two factors will improve the standard of dairy farming in Ireland, which will be beneficial for everybody.

  In the context of the capital investment farmers have to make, we will make more than €10 million available to dairy farmers next year in the form of the TAM scheme, which is half of the overall scheme as such, to help them with the costs of expansion, growth and upgrading their equipment.

  Additional information not given on the floor of the House 

  Environmental sustainability is an increasingly important issue in the marketplace for many multinational dairy and food operators, many of which now have sustainability as a core part of their corporate strategies. During my trade missions to China and the US in 2012 it was clear that the sustainability and quality messages have a strong resonance both with potential customers for Irish food products and with potential investors in the Irish agri food sector.

  Developing a unique selling point for Irish food products is a critically important element of the national strategy for the development of the sector. It is particularly relevant in the dairy sector where we will need to maximise market returns for significantly increased production in competitive markets worldwide. Ireland is well placed to develop a national brand image based on a reputation for high quality dairy products, and on its mild maritime climate, plentiful supplies of water, grass based production and an already positive green image.

  In that context, earlier this year, Bord Bia launched its “Origin Green” programme, which establishes a framework within which Irish food companies can have their green credentials independently measured. This will be a critically important element in the development of the Irish food sector in the coming years and its promotion on international markets. The key is to build independently verifiable metrics, which can be used in the marketplace, around Ireland’s already positive green image.   

  It is equally important to develop an independently accredited sustainability and quality programme at farm level for the dairy sector as part of that overall strategy to enable the sector point to verifiable attributes in maintaining and expanding its market share. There is also a strong correlation between the measures needed to improve environmental sustainability and to improve hygiene and other quality practices on farm, and those needed to reduce the costs of production at farm level and improve profitability.

  In that context, and following extensive consultations with stakeholders in the first half of 2012, I announced in June that Bord Bia would begin detailed work on the development of a national sustainability and quality programme for the dairy sector to be used as a key element in marketing and promotional efforts on international markets. The programme will provide an independently accredited framework for operating best practice quality and sustainability principles on Irish dairy farms, and an objective and uniform mechanism for measuring compliance with these principles. It will also provide a vehicle for encouraging continuous improvement in production standards on Irish farms, underpin the marketing of Irish dairy products internationally and provide additional assurance for potential investors in Ireland.

  Stakeholders are currently engaged in detailed technical discussions on the development of the programme, under the aegis of a technical advisory group convened by Bord Bia to progress the issue, and I hope it can be finalised in the near future.

Agriculture Schemes Expenditure

 2. Deputy Martin Ferris Information on Martin Ferris Zoom on Martin Ferris asked the Minister for Agriculture, Food and the Marine Information on Simon Coveney Zoom on Simon Coveney his views on the impact of budgetary cuts on farm programmes; and if he will make a statement on the matter. [56052/12]

Deputy Simon Coveney: Information on Simon Coveney Zoom on Simon Coveney As this is a fairly broad question, I will address the issues that might be most pertinent. There has been some criticism since the announcement of the budget that we have targeted certain schemes unfairly and I want to give the Deputy the rationale for why we did what we did. I will deal with the beef sector first.

For the past five years we have had a suckler cow welfare scheme which has been a popular and extremely good scheme. It has significantly improved the welfare standards within the suckler herd and it has provided very valuable data around breeding programmes and fertility within herds to Irish Cattle Breeding Federation, ICBF, which is very useful for planning for the future, breeding programmes and so on. That was a five year scheme and this is the fifth year of it. It has come to an end. I had signalled that I would not be able to continue the suckler cow welfare scheme indefinitely into the future because we do not have the money to do it and it has come to the end of its five year term. I would have had to have put a new scheme in place and get approval from Brussels for that. Instead we decided to put in place a smaller, more targeted scheme to replace the suckler scheme for the moment, which will cost us approximately €10 million a year and which will pay farmers €20 rather than €40 an animal. We are asking them to continue to supply the kind of data on breeding and fertility they previously would have been providing to the Irish Cattle Breeding Federation, ICBF. We are asking new entrants also to provide that data for that money.

It is important to say in terms of the beef sector, because it is misunderstood, that next year we will spend almost as much on the beef sector as we spent this year. This year we will spend €25 million on the suckler cow welfare scheme in addition to approximately €2 million connected to beef discussion groups which started half way through the year. Next year we will spend €10 million on this new scheme. We will spend €10 million on the existing suckler cow welfare scheme where the payments will be paid next year in respect of calves that were born in the second half of the year, and we will spend €5 million on beef discussion groups on this sector next year. That is €25 million that will be spent on suckler beef next year which is not a significant difference from what was spent on that sector this year, although I accept the make-up and design of those payments are different. I will address one or two of the other sectors related to the sheep sector and DAS payments when I get an opportunity to do so later.

Deputy Martin Ferris: Information on Martin Ferris Zoom on Martin Ferris I thank the Minister for his reply. He is aware that farm incomes have fallen by 22% up to November of this year. That is an average payment of approximately €18,000 which is well below the industrial wage. I am sure he is also aware of the plight of the weaker farmer, which includes farmers in the suckler welfare scheme, those on previous REP schemes and so forth, and the fact that such schemes were instrumental to the viability of that type of farming. Notwithstanding the tremendous work regarding the provision of data and so forth, the suckler scheme has had a huge impact on the quality of calves being born and in terms of the finished product, and everybody benefited as a result.

It is not the remit of the Minister's Department, but the farm assist scheme has been cut by approximately €8 million. The farmers in that scheme are the most marginal and they are struggling to survive and care for their families. These cuts will have a detrimental effect on that type of farming in particular because one will find that the farmers in the suckler welfare scheme and some people involved in sheep farming are also dependent on farm assist. While the Minister might try to make up that loss another way, perhaps by compensating for the situation in regard the suckler welfare scheme, the farm assist being cut as well will make it almost impossible for these type of farmers to survive.

Deputy Simon Coveney: Information on Simon Coveney Zoom on Simon Coveney There is a genuine concern about ensuring that farmers on relatively small farms in very disadvantaged areas are provided with enough support to keep them on the land. That is the reason, in terms of the savings we must make in the disadvantaged areas scheme, we have excluded farmers in mountainous regions from any of those savings to ensure nobody farming in a mountainous area - that is 32,000 out of the 100,000 - will face any reduction in their incomes. Regarding the low land disadvantaged area farmers, instead of reducing the rate for everybody, we have reduced the eligible hectarage for people to again protect smaller farmers. In other words, instead of claiming the payment on 34 hectares as a maximum it will be claimed on 30 hectares as a maximum. I have tried to prioritise the most disadvantaged farmers, that is, the people on the mountains and the smaller farmers within the disadvantaged areas scheme, DAS, in lowland areas. A total of 73% of people in disadvantaged areas will be unaffected by the reductions and the remainder will see a reduction of an average of about 11% but those decisions were made to protect those with holdings and the most disadvantaged people within DAS areas. The same applies to the suckler scheme. Those who apply for the new suckler scheme in terms of the data transfer scheme will automatically get €20 per cow for the first 20 cows.

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