By using this website, you consent to our use of cookies. For more information on cookies see our privacy policy page.

Text Size: a a
Home A-Z Index Subscribe/RSS Contact Us Twitter logo small white bird

Minister Focuses 2009 Spending on Productive Capacity of Agri-Food Sector

€3.2 billion to support agriculture, fisheries and food in 2009

The Minister for Agriculture, Fisheries & Food, Brendan Smith TD, said today that against the background of the deterioration in the public finances, his approach in preparing the 2009 Estimates for his Department was "to focus available resources on the measures that allow us to maintain and grow the productive capacity of the agri-food sector." The Minister was speaking after the publication of the 2009 Budget and Public Service Estimates for 2009, which provides €1,803 million for his Department.

Minister Smith pointed out that "the headline figure for my Department indicates a year-on-year reduction in spending of 11.8 per cent. This gives a misleading impression, because the 2008 allocation was increased recently by an additional €195 million, which was provided for the Farm Waste Management Scheme. When this additional funding is excluded, the gross Estimate for the Department for 2009 is actually 2.6 per cent lower than that in the 2008 Forecast Outturn." The Minister highlighted the fact that, when combined with EU funding of €1.4 billion, total expenditure by his Department in support of the agriculture, fisheries and food sector will amount to over €3.2 billion in 2009.

Minister Smith said that the public finances situation had obvious adverse implications for expenditure across all government Departments, and difficult decisions had to be made in the best interests of the country. Insofar as the agriculture, food and fisheries sector was concerned, account had to be taken of the very high level of investment by the Government in recent years in developing the sector. In this regard he pointed out that the Government had committed significant additional financial resources to areas such as the rural environment scheme where the rates of grant had been increased by 17 per cent, the new suckler cow scheme and the farm waste management scheme. Expenditure for that scheme in 2008 will exceed €375 million following the provision of the additional €195 million in recent weeks.

The Minister said that the reality is that "when faced with limited resources, difficult choices have to be made. The choices I have made will enable the major developmental schemes to continue, and are intended to facilitate the continued strategic development of the agri-food sector. I have therefore chosen, for example, to protect the Rural Environment Protection Scheme (REPS), including the 17% increase in rates, and to ensure that it can continue to accommodate farmers wishing to join in 2009. This reflects the value I place on a scheme that meets environmental imperatives and consumer demands for environmentally friendly food production. Next year the provision for REPS will be increased to €355million. I have also ensured that the commitment entered into in Partnership to spend €250 million on the suckler welfare scheme is fully honoured. The commitment to payment of a premium of €80 per animal in respect of the 2008 scheme will be honoured in full with €33 million to be paid this year, and a further €44 million provided in 2009 to pay the remaining 2008 scheme claims. The balance of the €250 million - some € 173 million - will be paid to participating farmers over the remaining life of the Suckler Scheme. This will mean that depending on the participation rate, the premium may have to be reduced by up to half for the final four years of the scheme. In respect of the 2009 scheme, all payments which would normally fall due for payment in late 2009 will issue in early 2010."

Minister Smith acknowledged that having chosen to protect expenditure in certain areas, savings had to be found in other areas to meet current budgetary requirements. As a result, he had decided reluctantly to reduce expenditure under the scheme of Area-Based Compensatory payments. The provision for the scheme payments next year is reduced to €220.4 million. The Minister said the reduction will be implemented in a targeted manner in the main by reducing the maximum hectarage limit on which payments are made to 34 hectares and also by a small increase in the stocking density requirement. The Minister said "in reducing expenditure I have sought to target the payments and maintain the productive capacity of the sector. While overall expenditure will fall, I am confident that the majority of farmers will not suffer any reduction in their payments"

In relation to the Early Retirement and Young Farmer Installation Schemes, the Minister said that the €56.7 million provision will allow current commitments to be met but, for the present, new applications for these schemes are being suspended with immediate effect. However the Minister specifically welcomed a number of farm tax measures that were renewed in Budget 2009. These are part of a number of schemes and reliefs that have been put in place in recent years to bring about improvements in land mobility that will, in turn improve productivity and efficiency. These particular reliefs include the renewal of stamp duty relief for four years until 31 December 2012 (worth an estimated €53 million in a full year), the renewal of stamp duty relief for farm consolidation for two years from 1 July 2009 to 31 June 2011, the renewal of both the general and the young trained farmers rates of stock relief for a further two years (estimated cost to the Exchequer of €2 million in a full year) and the extension of the accelerated capital allowance for necessary farm pollution control facilities from 31 December 2008 to the 31 December 2010 (worth estimated €10 million in a full year).

The Minister said that "When combined these farm tax measures are estimated to be worth over €65 million in a full year. The top rate of stamp duty on agricultural land transactions is being reduced from 9% to 6% on amounts over €80,000 with effect from 15 October. This should reduce the cost of agricultural land to purchasers and encourage higher number of transactions. All these measures help to improve land mobility, land swaps and higher environmental standards".

Minister Smith also indicated that having regard to the improved circumstances - in particular, the fall in the incidence of BSE, the increased outlets for meat and bonemeal and the savings from the expected increase in the testing age for BSE to 48 months early next year - he had decided to reduce his Department's contribution to the cost of the Fallen Animals' Scheme from €28 million to €14 million. Thus an adjustment of the burden sharing of this Scheme was now appropriate with the sectors involved taking a greater share of the costs. The reduced funding will be implemented through reduced rates under the scheme, which will be discussed with the various interests over the next few weeks.

The Minister confirmed that the financial provision for research and development measures, as well as marketing and processing scheme, will enable the high level of existing contractual commitments to be met.

Minister Smith said that he was conscious of the importance of forestry in providing incomes for farmers and employment in rural areas as well as the contribution to meeting the challenge of climate change. The 2009 Estimate provides €127.7 million for the sector, an increase of 6% over 2008. While over €80 million will be directed to payments of premia, mostly to farmers, there will also be generous support for planting and support schemes. The level of funding provided should allow planting to be maintained close to this years level. The Minister also said that the Government had decided to merge COFORD into the Department in the interest of more efficient administration.

The Minister said that he was also committed to supporting the fishing sector and that in providing €30 million, which does not include the funding provided for BIM, his priorities had been the continuation of investment in fish processing, aquaculture development and fishery harbours.

The Minister confirmed that Grants-in-aid to State Bodies, including Teagasc, Bord Bia, BIM, the Marine Institute and the Sea Fisheries' Protection Agency will be reduced, taking account in particular of the need to achieve payroll and other efficiency savings. The Minister said that total allocations to these semi-states had increased in recent years - a total of €235million is being provided next year - and he will be asking them to prioritise their activities in the light of current budgetary position and having regard to overall policy for the sector.

The Government has also decided to transfer the seafood marketing and promotion functions from BIM to Bord Bia. This will strengthen the marketing of seafood as part of a more cohesive overall food marketing effort where critical mass is more vital than ever in penetrating international markets. BIM will therefore be enabled to concentrate on its role in developing the fisheries industry in line with the Cawley Strategy. Minister Smith said he would also take steps to develop closer linkages between the food development agencies in general to ensure that the entire bio-sector is supported to best effect, given the competitive pressures and demands of the modern marketplace on the sector and its potential additional contribution to our future economic well being.

The Minister said that he would monitor all schemes and services throughout 2009 and that he would review the position thoroughly, including some of the decisions he had taken this year, in the context of the 2010 estimates.

As well as decisions on spending on schemes and services, the Minister said his Department will be subject to the same pay-roll restrictions as other Departments and semi-state bodies. The salaries provision for the Department in 2009 represents a further fall in staff numbers of 150. Minister Smith pointed out that the number of staff in the Department has been reduced by almost 500 in recent years and another 400 have been redeployed to other work areas since the introduction of the Single Payment Scheme. In addition, Minister Smith added that his Department would be "engaged actively in a programme of reviews aimed at improving the efficiency and effectiveness with which we provide such a wide range of schemes and services to all our stakeholders."

In conclusion, Minister Smith said that the decisions he had taken were taken only after a full range of possibilities had been carefully considered, and emphasised that "notwithstanding the difficulties in the public finances and the decisions I have taken against that background, the position is that in excess of €3.2 billion will be spent next year on supporting the Irish agriculture, food, forestry and fisheries sector. The choices I have made and the decisions taken are aimed at protecting the most productive elements of the sector and ensuring that it continues to prosper. It is important that it is well positioned to get through this challenging period and continue towards achieving its full potential as our most important indigenous industry when the economy begins to grow again. I believe the farming and wider rural community will understand the approach we are taking and will play their part."

Date Released: 14 October 2008