Budget 2014: ‘€54m in cuts, no REPS rollover, no AEOS, new suckler and horse welfare supports’

Budget cuts of €54m are set for the Department of Agriculture next year and this figure will rise when new supports for the suckler beef welfare sector are rolled out.

Speaking at the Joint Oireachtas Committee on Agriculture, Food and the Marine this morning, Agriculture Minister Simon Coveney TD outlined some Budget 2014 proposals that are under way.

“This is not a straightforward budget. The actual savings in terms of numbers may not be as big as last year, but there is still come complex discussions to be had in terms of how we do things strategically for the agricultural sector,” he said.

The minister outlined the the main figures and options available for Budget 2014. No final decisions have been made at this point.

* The Department of Finance has indicated reductions of €28.5m in current expenditure and reduction of €25.5m on capital expenditure for 2014 are required. 

* Unforeseen future challenges for 2014 were outlined. Firstly a new digital mapping system that is currently under way to clawback overpayments. “This is a contentious issue. I know nobody likes to get a letter in the post saying the need to pay back money from 2009 but this is not our money. It is public money and if we don’t claw it back the European Commission will and it will claw it back with penalties,” the minister explained.

* Secondly, since the horsemeat scandal, there has been a massive reduction in the number of horses being slaughtered compared to last year and the year before. Last year 24,000 horses were slaughtered in Irish factories, this year 6,500, the committee heard. As a result increased expenditure on horse welfare for next year will be examined.

* Thirdly, the department intends to examine vulnerable sectors, in particular the suckler beef sector, and look at ways to provide supports while at the same time make cuts. It was noted that any monies allocated to such a scheme would be earmarked as further cuts to be found for 2014.

“There is a lot of anecdotal evidence to suggest a lot of suckler cows are not being put into calf, with suckler cows being slaughtered. So it is a real concern,” the minister said speaking to the committee. “There is a lack of confidence in the suckler herd that needs to be addressed. We have very limited resources to do that but it is something we are actively looking at.”

* In the new Rural Development Plan next year, Europe’s contribution to pillar one money will be €313m as appose to €350m, the committee heard. This is a reduction but it will not necessarily mean the amount of money spent on farmers in rural development programme reduces, the minister said. “We have an option of 85 per cent co-funding because we are a bail-out country, we have a 75 per cent co-funding option for environmental schemes, while a 53 per cent option for many of other schemes. So depending on the co-funding rates that will determine the amount of money and we will try and retain as high a figure as we can,” he added.

* In terms of the fodder scheme, the minister said this was not part of the department’s traditional estimates for 2013 and it had to find an extra money €2m in its budget this year.

* With a lot of farmers coming out of REPS, 13,000 farmers in total, this will create natural national and European savings of about €25m, the committee heard. “The idea that we could simply rollover REPS and that all of a sudden that would be ok, is simply an non-starter. For starters we did not rollover REPS two or REPS three so why should we start rolling over REPS 4. The cost of that would be very significant,” Coveney insisted.

* In terms of the Disadvantage Area Scheme (DAS), the minister is hopeful of no reductions in this scheme for 2014 if he can avoid it, the committee heard.

* With regards to the Agri-Environment Options Scheme (AEOS), the minister confirmed there will be no introduction of this scheme next year.

In terms of the implementation of the Common Agricultural Policy (CAP), single farm payments are not taken into account in the department’s budget allocation. The minister did note at the committee this morning that its implementation is of equal importance if not more important for farmers and the process over the next number of months is crucial.  

“This in many ways is of a bigger of concern than Budget 2014, in terms of the redistribution of the single farm payment, what the rural development programme is going to look like, the extent of the environmental scheme, how we will view DAS in the future for example. Young farmers, new entrants, if we have a cap, where do we have the cap, if allowed and so on. There are issues we have to finalise before the end of the year.”

A number of committee members were critical of the department in that no breakdown figures were provided for today’s meeting. Indeed no briefing or reports were issued whatsoever. “We can’t give you next year’s expenditure because that’s essentially giving you the Budget…There is no attempt to evade questions,” the minister quipped back to members.

In conclusion chairman of the committee Andrew Doyle TD noted: “While the negotiations are yet to be finalised, this morning’s meeting was a valuable opportunity for our Committee to explore with the Minister how the impact on farm families of adjustments in the budget can be minimised.”

Image courtesy of the Houses of the Oireachtas

 

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