Any suggestions that an underspend at the Department of Agriculture, Food and the Marine could be used to fund other schemes were quickly dismissed by the Minister for Agriculture Michael Creed at the Irish Farmers’ Association’s Annual General Meeting (AGM) yesterday.
During a question and answer session at the AGM, Minister Creed felt obliged to take the time to explain the underspend situation at the department in order to put an end to any confusion.
When asked about the possibility of a €200 suckler cow payment, he said: “It has been suggested that we have a €100 million underspend and therefore that’s available to fund a suckler cow initiative.
Quite simply, that is to misunderstand the budgetary process that we go through. This is gaining traction based on a fundamental misunderstanding of how the department operates, what are, multi-annual schemes.
“We begin a process of engaging with the Department of Finance in the context of a budget – in any year – from late summer onwards; obviously the budget is delivered in October.
“We operate a budgetary system on the basis of a 12-month budgetary cycle; we administer on behalf of the European Union schemes that are a five-year commitment.”
Payment claims
As a result of this, the department enters into a contract with a farmer on a scheme – such as the Green, Low-Carbon, Agri-Environment Scheme (GLAS) – and it commits to pay them over five years, on the basis that the farmer commits to carry out specific actions under the scheme.
Minister Creed gave the Targeted Agricultural Modernisation Scheme (TAMS II) as an example of the contractual arrangements that are expected of the department.
There is currently over 12,400 approvals issued as part of TAMS II and just over 3,300 payment claims have been submitted – with in excess of 2,500 of these having been paid to date; this leaves over 9,000 farmers that have yet to submit a payment claim.
Continuing, the minister said: “When we go into the Department of Finance to do our presentation on what our spending profile should be, we have to – and we would be negligent if we didn’t – present to the department all of the calls that could come in.
“So if you were one of the 9,000 outstanding TAMS approvals, and I say to you ‘oh sorry, we didn’t ask for enough from the Department of Finance – I’m sorry we can’t pay you now’ or ‘I’m sorry, I have committed what I was going to pay you to pay somebody else’, you wouldn’t thank us much for that.
So it’s not a saving; it’s not a saving, it’s an underspend that is contractually obliged.
‘I am contractually obliged to pay people’
Minister Creed explained that these are payments that he is legally obliged to make.
“They’re legally obliged payments and I have to pay them. The fact that the paying order didn’t come in in 2017 doesn’t mean that it won’t come in in the first week of 2018.
“I am contractually obliged to pay people that I have GLAS commitments to, that I have TAMS commitments to; and that is based on five-year rolling programmes as opposed to a 12-month cycle.
“In fact, I think it is a tribute to the department and, if I may say so, a tribute to our negotiating skills that we can convince the Department of Finance that we have all of these liabilities.
“But we don’t have certainty around when each one of them will present a paying order. So, I don’t have the flexibility to commit what is due to you to somebody else,” he concluded.