Opening Statement by the Minister for Agriculture, Food and the Marine Supplementary Estimate 2017
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- Charla Harmon
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1 Opening Statement by the Minister for Agriculture, Food and the Marine Supplementary Estimate 2017 I am grateful for the opportunity to present this request for a technical Supplementary Estimate for 2017 in which I am seeking your approval to use savings on the Departments Vote to fund other desired expenditure. As these proposed transfers and expenditure involve significant changes to the original 2017 voted allocations and I believe that it is important to seek your input and approval. Specifically, this technical supplementary estimate will transfer savings of 9m in certain areas of the Vote to fund the Brexit Loan Scheme which I announced in Budget In addition I am requesting your agreement to transfer 14.5m of savings in certain areas of the Vote to the agri-environmental schemes to ensure that there is sufficient funding available to pay 85% advance funding to all farmers who establish their eligibility. A further 4.5m will be moved to the ANC s scheme. 6.6m will be transferred to Bord Bia to assist with ongoing promotional work in addressing the market challenges relating to Brexit. Finally, a further 14m will be transferred the World Food Programme to support its humanitarian work across the world. Savings The 48.6m current funds required would be transferred from various subheads where, due to changed circumstances, savings have emerged, most notably in the administrative budget pay subhead, BDGP, Knowledge Transfer, the Animal Welfare Scheme for Sheep, the EMFF Seafood Development Programme, Research, the Early Retirement Scheme and the Development of Agriculture and Food. Payroll Underspend 12m The saving arises from a lower than estimated pay bill due to recruitment of additional and replacement staff not proceeding as quickly as planned. This delay in the recruitment process will give rise to a saving of approximately 12m in the 2017 payroll allocation.
2 Development of Agriculture & Food - 8.2m Savings are primarily due to funding which had been allocated to this subhead of the DAFM Vote pending the development of a programme of activities to support the food and drink sectors in addressing the market challenges relating to Brexit by Bord Bia. It is proposed to transfer this to Bord Bia under this supplementary estimate. Other savings are arising as there has been a lower than projected spend on lean reviews by food companies. In addition, a specialist food producer scheme, currently in development has yet to be launched and it is expected that this will be launched in Animal Welfare Scheme for Sheep 8m The Animal Welfare Scheme for Sheep was launched in December 2016, and is centred on a payment of 10 per breeding ewe on foot of the flock owner undertaking two animal health related actions. The original Vote allocation provided for full payment in respect of all ewes in the national flock, and, while a very high percentage of sheep farmers are participating, not all potential participants chose to do so. Year 1 advance payments commenced on schedule in mid November, and some 16m has issued to over 20,000 farmers. Balancing payments will issue in BDGP 3m 23,150 farmers are currently participating in BDGP I. The Programme was reopened in 2017, however fewer than anticipated numbers applied to participate. Some applicants were ineligible to participate while others did not comply with the mandatory requirements of the BDGP II. Ultimately, some 1,550 farmers are participating in the BDGP II. The 3m reduction in the estimate for 2017 is attributable to the uptake and compliance with mandatory requirements in both BDGP I and BDGP II schemes being less than projected. Payments in respect of BDGP I and II will commence in December to those herds who are compliant with the requirements of the schemes.
3 Knowledge Transfer 2.8m The Knowledge Transfer Programme is designed not only to help develop the skills base of Irish farmers, but also to support a number of other themes and measures in Ireland s RDP. The original allocation of 25.6m provided for 20,000 participants satisfying all scheme requirements. A saving will arise as approximately 19,000 farmers are currently enrolled in KT Groups and a minority of these have not complied with all the conditions required to receive full payments. Payments under the KT Programme commenced at the end of October, and to date over 13,700 farmer payments have issued. EMFF Savings I made some 43.6m available in 2017 for the EMFF Operational Programme in the budgets of my Department and its agencies however there are some savings as schemes roll out. There will be a saving of 4.5 million on B.I.M s 2017 current expenditure budget primarily in the Sustainable Fisheries Scheme and the Skills and Training Measure. There will also be savings of 2.5m on other EMFF budgets managed by my Department, mainly on a Marine Development Team a Marine Spatial Planning project. These savings will not affect the overall budget available for the seafood sector under the EMFF as these investments will occur over the later years of the Programme. Other Savings Other savings are in the Early Retirement Scheme where participants receiving the State pension reduces the Early Retirement Scheme spend payments by a corresponding amount and research grants where, due to a later than scheduled launch of the 2017 Research Call, 7m of expenditure will not arise until Overall these current expenditure savings amount to some 48.6m and these savings, with your approval, will be transferred to fund the following measures:
4 Brexit Loan Scheme - 9m 9m of the savings identified will be used to contribute to the 23m Brexit Loan Scheme, which I announced on Budget Day in partnership with the Department of Business, Enterprise and Innovation. The new Brexit Loan Scheme aims to make up to 300 million of working capital finance available to SMEs and mid-cap businesses (up to 499 employees). Given their unique exposure to the UK market, my Department s funding ensures that at least 40% of the fund will be available to food businesses. The finance will be easier to access, more competitively priced (at a proposed interest rate of 4%), and at more favourable terms than current offerings. This will give Brexit-impacted businesses time and space to adapt and to grow into the future. The new Scheme will be delivered by the Strategic Banking Corporation of Ireland (SBCI) through commercial lenders and SBCI issued an open call on 21 November inviting lending institutions to participate. The scheme is expected to be in place in March 2018 and it is anticipated that the scheme will remain open until March I believe that supporting lower-cost flexible finance is a key Government response to Brexit. The very successful Agriculture Cashflow Loan Scheme has provided a template for such Schemes, including this one for businesses. I also announced in the Budget that I have secured funding of 25 million for my Department to facilitate the development of new Brexit response loan schemes during 2018 for farmers, fishermen and food businesses. GLAS 14.5m There are now in excess of 50,000 farmers approved into the GLAS scheme over the three tranches (GLAS 1, 2 and 3). The environmental benefits to date are evident.
5 In September the European Commission agreed to my request that provision be made for an increase to the advance payments for Pillar II Rural Development schemes with the rate increased up to 85% under those schemes. GLAS advance payments will begin this week at the agreed higher advance rate of 85%. The additional 14.5m sought in this Supplementary Estimate will facilitate this and I urge all participants to ensure that they submit all outstanding documentation so that they can avail of this advance payment in Bord Bia 6m This allocation ensures that Bord Bia can fund a programme of additional activities to support the food and drink sectors in addressing the market challenges relating to Brexit. The funding, which is additional to the substantial funding already provided to Bord Bia for 2017, included further market promotion and support activities internationally, in the UK and in other markets within the EU. The programme of activities draws on analysis of data from the Bord Bia Brexit Barometer exercise which was completed by 139 food, drink and horticulture companies and follows my Department s request to Bord Bia to undertake a major market prioritisation exercise to identify the best prospects for sustainable growth in individual sectors. Areas of Natural Constraint 4.5m The significant level of financial support delivered through the ANC Scheme over the years recognises issues which pose a significant threat to the future viability of these farming communities. In Budget 2018, I was pleased to fulfil the Programme for Government commitment to allocate an additional 25 million to the Scheme. Almost 200m has been paid out under the ANC scheme this year and this extra 4.5m allocation will ensure the maximum amount of eligible participants are paid this year.
6 World Food Programme 14m Including this advance payment of 10m that I am requesting here today, Ireland will have contributed 60m to WFP for the years The additional 10m provided for WFP in this Supplementary Estimate represents an advance payment of next year s commitment under Ireland s Strategic Partnership Agreement with WFP. This earlier disbursement is at the request of the World Food Programme s Executive Director, who has written to inform me that this funding will significantly contribute to enhance WFP's capability to plan its interventions and better address the several growing humanitarian crises around the world. I am also proposing to provide an additional 4m to the World Food Programme which will contribute to its life saving work around the world, including helping 4.3m people that are facing crisis or emergency levels of food insecurity in the Kasai region of the Democratic Republic of Congo. This includes 350,000 children region at risk of severe acute malnutrition. This funding, while generally targeted at WFP s emergency and protracted relief operations, is provided on an un-earmarked basis which gives WFP the flexibility to plan and target this funding in the most strategic, efficient and effective manner and provide life-saving assistance for people living on the frontlines of hunger, conflict and climate-change. Ireland will become a member of the WFP s Executive Board in February Conclusion Once again, this is a technical supplementary estimate. The savings I have outlined will be used to fund both the World Food Programme, the Brexit Loan Scheme, GLAS, the ANC s and Bord Bia and I earnestly recommend this supplementary estimate to the Committee for support. I am happy to respond to any questions members may have.
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