I am pleased to present this technical Supplementary Estimate to the members of this committee.
I want to acknowledge the economic and budgetary difficulties and the difficulties in the public finances against which the 2010 budget is being prepared. I am not seeking a net increase in my Department's Vote but rather to provide for additional expenditure of €18.437 million on the gross side of the Vote which will be matched by an equivalent amount of additional appropriations-in-aid. The increases in appropriations-in-aid were not anticipated when the Department's Vote was settled originally. Some €17.7 million of the additional amount arises from the EU co-funding contribution to expenditure on the disposal and destruction of livestock and pigmeat product withdrawn from the market in December 2008. The remaining €727,000 relates to additional receipts associated with the technical and financial costs of market intervention which have increased in 2009 in line with the increased use of EU market supports in the dairy sector.
I also take the opportunity in this Supplementary Estimate to show adjustments between subheads that have been facilitated by savings elsewhere in the Vote. These adjustments are being made in order to ensure that maximum use is made of all funds available to my Department in 2009.
I introduce the Supplementary Estimate against the background of a most difficult year for family farm incomes and am particularly anxious to ensure that the maximum possible level of payments is issued by my Department before the end of December this year to assist farm families with the income, cash flow and credit difficulties they are encountering at this time. The Department has already made every effort to alleviate the situation. Deputies will be aware that this year, for the first time, my Department issued an advance of 70% of the single payment scheme payments which commenced on 15 October and began issuing the remaining balance on Tuesday, 1 December. As of that date, expenditure under the single payment scheme stood at €1.228 billion, the highest ever at this stage of the year, and the highest proportion of the single payment scheme paid in any EU member state at this point. When these payments are combined with expenditure under the upland sheep, bioenergy, suckler cow, REPS, disadvantaged areas, land mobility and afforestation schemes, payments to farmers this year will exceed €2 billion. The single farm payment is well in excess of 95% of the total payment, as issued already.
In so far as the Supplementary Estimate is concerned, the principal measure I wish to provide for is in the area of onfarm investments and, specifically, the allocation of an additional €70 million to the farm waste management scheme. The additional funding is being provided from both savings in the Vote and from the additional appropriations-in-aid to which I have already referred.
I am sure Deputies will be familiar with the scheme and are as convinced as I am of its merits. The revised version of the scheme was introduced in March 2006 with attractive grant rates to assist farmers in meeting the requirements of the nitrates directive. It represents the largest ever investment in Irish farm infrastructure and payments in excess of €750 million have been issued already to beneficiaries and participants of the scheme.
Earlier this year, it was decided to make the remaining payments under this scheme on a phased basis with 40% being paid in 2009 as claims were processed, a further 40% in 2010 and the remaining 20% in 2011. In addition, a special ex gratia payment not exceeding 3.5% of the value of the deferred amount will be made in 2011 to those farmers whose grants were partially deferred.
Of the additional funding being provided, €25 million has been transferred from other subheads to enable my Department to pay the first instalment of 40% due to farmers under the scheme this year. The remaining €45 million will enable the Department to bring forward payment of the second instalment of 40% which would otherwise have been paid to farmers in early 2010. I am glad to be able to bring forward these payments and we will proceed with the payment of the remainder of the second 40% tranche early in the new year.
In addition, a further €15 million is being provided for the farm improvement scheme for 2009 which will bring the total allocation for this scheme this year to €30 million, compared with an expenditure level of €12.9 million in 2008. The additional allocation in this case will enable the Department to continue to pay farmers all grants due to them on the basis of claims submitted to date. A sum of €15 million was originally allocated to the farm improvement scheme in 2009 and the further funding is required to meet claims in respect of work completed this year. Those claims and payments are up to date. To date this year, 1,845 payments, totalling €24.69 million, have been made to farmers under this scheme.
The Supplementary Estimate also provides for additional expenditure of €39 million in REPS payments this year bringing total expenditure under that scheme in 2009 to an unprecedented €369 million. This compares with a Revised Estimates provision of €330 million. More than 17,000 applications for the REPS 4 scheme had been received by the closing date of 15 May 2009 and approximately 7,000 of these were new applicants, who had not been involved in REPS previously. My officials have been working to complete all necessary administrative checks and field inspections to enable payments to REPS 4 participants to begin and I am confident that payments will issue in the week beginning 13 December. This will be a very welcome and necessary boost to farm incomes at a time of heavy demands on farm families. I issued a statement asking people who have yet to send back documentation to the Department in respect of REPS 3 to do so as soon as possible so that we can process those forms and get payments out during December. Deputies will be aware that I announced the closure of REPS 4 to new entrants in July this year because we simply could not afford to maintain a scheme of this nature at that level of subscription. Nevertheless, contracts are being honoured and payments to all existing participants are continuing. I expect the payments in the remaining years of the scheme to exceed €1 billion.
My Department is in negotiation with the Commission to secure approval for a new agri-environment scheme to be funded under a revised rural development programme and I am in discussion with the Minister for Finance, Deputy Lenihan, on the funding for the scheme. I hope to be in a position to announce details of the new scheme in the near future.
Finally, the Supplementary Estimate also provides funding for the Department to pay an additional €1.288 million to meet maturing liabilities under the food institutional research measure, which is the primary national funding mechanism for food research in third level colleges and Teagasc. It is a competitive programme which typically involves multidisciplinary teams from two or more institutions working on projects to develop generic food technologies, and which builds expertise and capability in key areas of food research and is an important source of innovation for the industry.
The additional funding sought will be used to finance ongoing projects under the programme. These are performing well and overall the programme of research has exceeded expectations in terms of the progress achieved to date. The Supplementary Estimate will bring the total expenditure for FIRM in 2009 to over €14 million. This, the committee will agree, is a very substantial commitment to the development of the knowledge economy as it applies to the food sector.
The savings to which I referred will come from a number of headings, including the pigmeat recall scheme, Bord Iascaigh Mhara and the Department's administrative budget. The savings arise from reduced levels of activity and staff and other administrative savings, and I am satisfied that these are genuine savings and that all current liabilities are being discharged.
Before I conclude, I want to refer briefly to the plight of farmers and others affected by severe flooding around the country. I have seen at first hand the devastation caused by the extraordinary weather events in affected areas. In response to the situation, on 25 November I announced the provision of a targeted fodder aid scheme. This is in addition to an initial allocation by Government of €10 million for a humanitarian assistance scheme to be administered by the Department of Social and Family Affairs.
The fodder aid scheme is targeted at farmers in the west, midlands and south west who suffered damage to fodder, including silage, hay, concentrates or straw, caused by flooding in November 2009. I have ensured the scheme will be as simple as possible for farmers to access and that payment will issue to deserving cases without delay. My staff will take as sympathetic an approach as possible to examining claims, carrying out inspections and expediting payments. I will be prioritising the areas most badly affected and ensuring that payments begin within the next two weeks.
These are very difficult times for many farm families and I commend the Supplementary Estimate to the committee in order to help relieve the situation. I thank the Chairman.