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22 October 2008: Minister Smith Comments on 2009 Spending to Support the Agri-Food Sector

The Minister for Agriculture, Fisheries and Food, Brendan Smith TD, emphasised again today that the need to restore stability to the public finances in the best interests of the future of the country left no option but to take difficult decisions on public expenditure levels.

The Minister acknowledged that this would impact in the short term on expenditure on certain measures for the agriculture, fisheries and food sector. "In making choices on the use of limited resources my strategy is to protect those measures which will ensure the development of a productive and competitive sector into the future. I believe farmers and the wider rural community are willing to play their part in accepting certain cutbacks, which will allow the economy to emerge from this extremely difficult period of global turmoil and be restored to its growth path." The Minister said that the Government had committed very high levels of public funds to the development of the sector in recent years. "Recent examples include the Rural Environment Protection Scheme (REPS) where the rates of grant had been increased by 17 per cent, the new €250 million 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."

Minister Smith said the decisions he had taken involved difficult choices in order to ensure funding for these schemes, which he had identified as priorities. "The harsh reality is that having chosen to protect expenditure in certain areas, savings had to be found in other areas to meet current budgetary constraints. Reluctantly I have therefore had to reduce expenditure under the scheme of Area-Based Compensatory payments. Nevertheless we will be making payments of over €220 million under this scheme next year and the reduction will be implemented in a targeted way with the majority of farmers not suffering any loss in their payments."

The Minister said he had provided almost €57 million for commitments under the Early Retirement and Young Farmer Installation Schemes but this level of funding meant that for the present, new applications for these schemes were suspended. "This decision can obviously be reviewed for future years but in the meantime a number of farm tax measures worth over €65 million were renewed in Budget 2009 to bring about improvements in land mobility that will, in turn improve productivity and efficiency." The Minister also pointed out that 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.

Minister Smith said that the reduction in his Department's contribution to the cost of the Fallen Animals Scheme took account of 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. "I believe that an adjustment of the burden sharing of this Scheme was now appropriate with the sectors involved taking a greater share of the costs."

In conclusion, Minister Smith said that neither taking or accepting the type of decisions now necessary was easy but he believed they were in the best interests of the country. He reassured farmers and the wider rural community of the Government's commitment to the future of the agriculture, fisheries and food sector. "I will continue to do all I can to ensure the delivery of the type of supports necessary for our most important indigenous industry. In this context I am glad that I was able to deliver the early payment of an advance of the Single Payment which provides total annual support of €1.3 billion to Irish agriculture."

Date Released: 22 October 2008