Committee Reports > List of Committees > Joint > 1984 > Committee on the Secondary Legislation of the European Communities (4th Committee) > Report No. 12 - Disadvantaged Areas

A. INTRODUCTION

1.This Report deals with the efficacy of Community legislative measures in relation to disadvantaged areas and with the case for their extension and the reclassification of severely handicapped areas. The Joint Committee has examined the operation of the following Community measures:-

(i)Council Directive of 28 April 1975 on mountain and hill farming and farming in certain less-favoured areas (75/268/EEC),

(ii)Council Directive of 28 April 1975 concerning the Community list of less-favoured farming areas within the meaning of Directive No. 75/268/EEC (Ireland) (75/272/EEC),

(iii)Council Regulation (EEC) No. 1820/80 of 24 June 1980 for the stimulation of agricultural development in the less-favoured areas of the West of Ireland.

ACKNOWLEDGEMENTS

2.These Instruments have been examined for the Joint Committee by its Sub-Committee on Agricultural and Fisheries Matters under the Chairmanship of Deputy Joe Walsh. The Joint Committee is indebted to Deputy Walsh and his Sub-Committee for their work.

The Sub-Committee had discussions on the subject with representatives from the North Connacht Farmers’ Co-operative Society Limited, the Irish Cooperative Organisation Society and with Mr. Eddie Mac Suibhne and Mr. Gerry Hoey from the Department of Agriculture. It also considered a written memorandum from the Irish Farmers Association.

B. CONSIDERATION OF EXISTING COMMUNITY MEASURES

Directive 75/268/EEC (Less-Favoured Areas)

3.The Disadvantaged Areas Scheme, as implemented in Ireland, is based on this Directive on mountain and hill farming and farming in certain less-favoured areas. The Directive provides for the following types of areas:

-mountain areas designated under Article 3.3 of the Directive

-hill and lowland areas designated under Article 3.4 of the Directive, viz “areas in danger of depopulation and where the conservation of the countryside is necessary… which are homogenous from the point of view of natural production conditions… and which simultaneously exhibit all the following characteristics:

(1)presence of land of limited potential

(2)economic results appreciably below the mean

(3)low or dwindling population.

The Directive also requires that the level of aid be varied in accordance with the degree of permanent natural handicap. For that reason the poorer areas of the West are scheduled as severely handicapped.

The areas of Ireland designated by the Council in 1975 were:

-the Western Region including all of counties Cavan, Clare, Donegal, Galway, Kerry, Leitrim, Longford, Mayo, Monaghan, Roscommon and Sligo together with parts of West Cork.

-The Eastern Region incorporating mountain sheep grazing areas in counties Carlow, Cork, Dublin, Laois, Limerick, Louth, Offaly, Tipperary, Waterford, Wexford and Wicklow.

GRANT AID

4.The Directive has two main provisions: (i) an increase in investment aid available to development farmers in less-favoured areas and (ii) a system of payments to compensate for permanent natural handicaps. The most important aid, having regard to both its cost and number of benefitting farmers, is the system of headage payments. These consist of direct payments per livestock unit to farmers in the disadvantaged areas on condition that they occupy and farm at least 3 hectares, undertake to continue farming for at least 5 years and under the national scheme that their off farm income (including spouses) does not exceed £3,500. The Irish Government introduced three schemes in the Disadvantaged Areas to implement the system of headage payments.

(1)Cattle Headage Payments Scheme operates in the More Severely Handicapped Areas of the Western Region only and applies to all types of cattle.

(2)Beef Cow Scheme which gives headage payments on beef cows and is operated in the Less Severely Handicapped Areas of the Western Region.

(3)Sheep Headage Payments Scheme operates throughout the disadvantaged areas with payment on mountain type adult and hogget ewes.

Payment is made on lowland hogget ewes in the Western Region.

At present FEOGA reimburses 50 per cent of the headage payments to the Irish Government.

The following benefits apply

(i)Capital Grants for Development Farmers only

-for farm buildings, an extra 10% to 35%

-for land improvements, an extra 10% to 40%

(ii)Joint Investment Schemes:

Capital grants of 40% for improvement on mountain grazing land.

(iii)Compensatory Allowance (Sheep):- 1984 rates

-for each of the first 150 ewes* £9.50 each

-for each of the next 50 ewes £6.50 each

(iv)Compensatory Allowance (Cattle): 1984 rates

5.In their submission to the Joint Committee the Irish Farmers Association state that in the past, Ireland has not paid the maximum amount of compensatory allowances permissible under Directive 268. Off-farm income limit has been reduced to a very low level at £3,500 gross income. The I.F.A. propose that the off-farm income clause should be increased to £6,500. Ireland must utilise the Disadvantaged Areas Scheme in future to its maximum considering that a 50% E.E.C. refund is available.

The I.F.A. also supports the move to abolish the ten cow eligibility ceiling for headage payments as has been proposed by the Council of Agriculture Ministers at their November 1984 meeting.

Extension of Disadvantaged Areas: Boundary Reviews

6.The boundaries of the disadvantaged areas in Ireland have been reviewed on two occasions - in 1976 and 1978. Following the results of the second review, it was maintained that many areas which should have been designated as disadvantaged were omitted. In June 1981, the Government, in its programme for Government announced a third review, based on parts of DEDs, ⁽¹⁾ to ensure that all areas which qualified were designated. In the course of this review the volume of submissions and representations considered ensured that the situation in virtually every county in Ireland was examined. The Department of Agriculture assured the Joint Committee that all representations received were considered and no area which had any prospect of qualifying as disadvantaged was excluded.

7.In the course of the review over 60 different areas throughout the country were examined, comprising some 600 DEDs and 10,000 townlands and covering close to 4 million acres. This review was the most comprehensive of any review of the boundaries yet undertaken. Following its examination of the results of the review, the Government made a comprehensive submission to the EEC Commission on 2 August 1984 with a view to having the existing disadvantaged areas in Ireland extended and in certain cases reclassified. The proposals in the submission relating to area reclassification require the approval of the Commission while the addition of new disadvantaged areas necessitates a decision by the Council of Ministers. A request from the Commission for supplementary information was received towards the end of September. The Minister for State at the Department of Agriculture stated in Dail Eireann on 22 November 1984 ⁽¹⁾ that this request was “part of the normal procedure adopted by the Commission in preparing a proposal for presentation to the Council of Ministers. Material in reply to the Commission’s request was supplied by the Department of Agriculture on 22 October 1984. In addition the Department have had a number of meetings with the Commission with a view to expediting work on this issue so that the Commission will be in a position to make a proposal as quickly as possible.”

8.The Irish Farmers Association believe that because of the decline in farm incomes relative to other incomes in Ireland, an extension of areas is a necessity. Flexibility of criteria for areas for inclusion should be accepted by the E.E.C. as there have been precedents for this in a similar submission from the U.K.

In its submission to Brussels the Association feel that Ireland must push for the maximum amount of areas to be included.

Regulation (EEC) No. 1820/80: Programme for Western Development (Western Package)

9.The programme for Western Development which was approved by the EEC Commission in April 1981 consists of a wide range of measures designed to deal with the special problems of agriculture in the West of Ireland. It provides, over a ten year period, for the injection into the Western region of about £300m of which about half will come from the EEC and half from the Exchequer.

10.The Package comprises the following elements:-

Electricity Supplies

(a)new supplies to farms

(b)increased supplies to farms

(c)3-phase supply to farms

(d)supply to agricultural marketing and processing plants

(e)selected network improvements

Aid amounting to 80% of the capital cost of (a) to (d) above is available to applicants.

Water Supplies

(a)Private Group Schemes

80% grants are available to applicants subject to a maximum of £600 per house and £400 per potential farm supply. Higher rates of grants apply in Gaeltacht areas and on populated islands off the west coast.

(b)Public Water Schemes

Selected County Council Schemes will qualify for grants covering 80% of the cost, or 90% in Gaeltacht areas.

Roads

(a)Local Roads (County Roads)

The Department of the Environment’s block grant allocations to County Councils include a sum specifically to finance a programme of works on county roads used mainly for agriculture and forestry.

(b)Farm Roads (Access or accommodation Roads)

Grants of up to 90% are available for these roads.

(c)Forest Roads and Roads Serving Commonages and Hill Grazing

80% grants are available.

Land Improvement

Grants are available to farmers under the following headings:-

(a)Commonage Division - fencing, reclamation, surface treatment and access roads.

(b)Hill and Mountain Pasture Improvement - fencing, reclamation, surface treatment and access roads.

(c)Lowland Reclamation - (other than drainage which is catered for under the Western Drainage Scheme).

Grants: 70% for land improvement

80% for necessary roads

Orientation of Agricultural Production

This measure is open to all farmers who:-

(a)practice farming as their main occupation;

(b)are not able to attain the comparable income under the farm modernisation scheme;

(c)are not eligible to avail of the farm retirement scheme;

(d)undertake to follow a farm improvement plan with the emphasis on the expansion of cattle and sheep numbers and keep simplified accounts in the prescribed form from the start of the plan.

The following incentives are available -

(a)Grants: 35% for farm buildings

(b)Calf to Beef Interest Subsidy

Farmers following improvement plans orientating cattle production towards an integrated calf to beef system can qualify for an interest subsidy not exceeding 16% on a loan of up to £100 per animal for 2 years on each calf entering the system in the first and second year of the plan.

Afforestation

The aim is to encourage private forestry.

(a)Forestry Development

Forestry development includes ground preparation,

ploughing, drainage, planting and fencing.

Grants:85% for farmers

70% for others

(b)Shelter Belts

Grants of up to 80% are available.

Agricultural Training

Training facilities are being improved as follows:

(a)200 additional student places will be provided at Agricultural Colleges,

(b)22 additional agricultural training centres are being constructed,

(c)A Resource Development Centre has been constructed at Athenry where members of the Advisory Service will be given special training.

Grants for agricultural marketing and processing

Regulation 1820/80 also provides for a special allocation of about £5.2 million each year for 5 years from 1980 under the existing F.E.O.G.A. Projects Scheme for improving facilities for marketing and processing of agricultural products. The level of grant now applying in the Western Region is 50% as against 25% elsewhere.

Financial Aspects

The FEOGA contribution towards the cost of the measures in the Programme and of the marketing and processing projects is estimated at 240m ECU (£150m approximately). FEOGA will reimburse 50% of state expenditure incurred on the Programme, however this may not exceed 40% of the total cost in the case of electricity, water supplies or roads.

Progress to date under the Western Package

11.Progress under the Regulation varies from one element to another. Generally speaking the infrastructural elements - water, roads and electricity - are satisfactory and work is well on target. From 1985 on there will be no specific allocation of funds for marketing and processing projects in the West, but the rate of FEOGA contribution has been maintained at 50% under Regulation 1932/84 which amended Regulation 355/77. Generally speaking land improvement work under Regulation 1820/80 is satisfactory, particularly as regards intensive lowland reclamation, where the 20,000 hectare target is likely to be reached next year. Work on the legal division of commonages is also satisfactory but the amount of follow-up work being undertaken by owners of the divided commonage - fencing, rehabilitation etc - is below expectations. Mountain and hill land pasture improvement work is also below target, principally because the average size of the unit is smaller than anticipated.

12.The most disappointing aspect of Regulation 1820/80 according to the Department of Agriculture is the orientation of production element (including the calf-to-beef scheme) under which grants are available for on-farm investment. The introduction of this scheme was delayed for a number of reasons - including an industrial dispute in ACOT - and it became operational only late in 1982. Among the reasons given for the poor up-take are the fact that there are restrictions on investment in dairying, that farmers over 55 years of age are excluded (except where the “management arrangement” operates), that the scheme operates by way of a farm improvement plan which entails the keeping of accounts and - as regards the calf-to-beef scheme - that aid is available only where there are borrowings.

The Programme under which Regulation 1820/80 is implemented is due for review in conjunction with the EEC Commission in 1985 and consideration is being given to the changes which should be suggested so as to make it more effective in stimulating the development of agriculture in the West of Ireland. The marketing and processing element of the Regulation is not subject to the Programme and therefore will not be included in the review.

PRIVATE AFFORESTATION

13.Under Article 12 of the Regulation 1820/80 forestry development is defined as including

“(a)the afforestation of land marginal for agriculture but suitable for forestry;

(b)associated measures including;

-preparation of ground, drainage and fertilization,

-fencing,

-fire protection and maintenance for a period of four years from the year of planting.”

14.The rate of up-take of grant aid for private afforestation has been extremely disappointing. Areas which are regarded as marginal for agricultural production are highly suitable for afforestation. These include

(1)The North Central Region - covering counties Leitrim, East Sligo,

South Donegal and West Cavan,

(2)County Clare and parts of North Tipperary.

15.It has been suggested that the forestry measure has been slow to take off, is because of the need to overcome the traditional lack of interest in private planting among Irish farmers. There are, however, signs of increased interest in the measure and it is expected that the rate of planting will increase substantially in the coming years.

16.One sign of increased interest is the proposal by the Irish Cooperative Organisation Society to establish two pilot projects in co-operative forestry in the areas mentioned at (1) and (2) above. In these regions the climatic conditions and most of the soils are extremely suitable for the growing of Sitka Spruce. At the same time these soils have a very low potential for the production of conventional agricultural crops. There are about one million acres of this type of soil in the two regions, most of it in the north central area.

C. The case for Reclassification of the Severely Handicapped areas of Ireland

17.Since November, 1980 the North Connacht Farmers Co-operative Society Limited and Donegal Creameries have made numerous representations and submissions at national and EEC level to obtain Mountain Area Status for the Severely Handicapped Areas in the West of Ireland. (See Appendix 1)

18.In Article 3 of Directive 75/268/EEC Mountain Areas are defined as areas where there are considerable limitations in the possibilities of using the land and an appreciable increase in the cost of working it, due to altitude, difficult climatic conditions, shorter growing season, slopes too steep for machinery or a need for special equipment. In subsequent negotiation by member countries, altitude took precedence over all other considerations, even though climatic conditions and the potential for grassland production are quite clearly superior in many areas at altitude, than in our own Severely Handicapped Areas.

19.In October, 1980 representatives from North Connacht Farmers Co-Op (N.C.F.) and Donegal Creameries visited the Cantal Area in France which is a Mountain Area as defined under Directive 75/268/EEC. The purpose of the visit was to study the conditions under which farmers work in that area, and to examine the measures which have been taken to develop agriculture, so that those measures which had been successful could be implemented in the severely handicapped areas of Ireland.

20.Cantal is a good example of the type of development envisaged in the Treaty of Rome which was aimed at bringing about an accelerated raising of the standard of living. EEC policy makers showed commendable foresight in allowing the enterprises most suited to farm conditions to develop in Mountain Areas in order to achieve this objective. The N.C.F. feel that areas like the West of Ireland with similar handicaps deserve the same consideration. A comparison of levels of agricultural production in the Department of CANTAL in a Mountain Area of the Massif Central, and County MAYO which is part of, and representative of, the Severely Handicapped Area of the West of Ireland is included in Appendix 11. This study shows clearly the greater level of output per farm in Cantal and the wider use range of Cantal soils for crops. Freedom from levies on milk production (due to Mountain Area Status) and improved credit facilities for development purposes, combined with an active local development agency (La Somival), are identified as the major contributory factors to the advanced state of agricultural development in what hitherto has been regarded as one of the most disadvantaged areas in the Community.

21.N.C.F. believe however that the combination of climatological factors experienced in the West of Ireland are at least as important as those experienced in the Massif Central especially in relation to grass growth potential and the length of the growing season. When these factors such as windspeed, rainfall, temperature, radiation and evapotranspiration are taken in conjunction with heavy and/or peaty soils of low permeability, then it becomes clear that the severely handicapped areas of the West of Ireland have at least as many limitations on the use of the land as areas presently designated as Mountain Areas.

22.This case is supported at local and national level by the I.F.A., I.C.M.S.A. and A.C.O.T. Recently, COPA7COGECA ⁽¹⁾ requested the Commission “to make a study to see whether there are areas in the Community which cannot be defined as Mountain Areas, but which suffer from similar natural handicaps and should therefore receive similar benefits”.⁽¹⁾

23.N.C.F. and Donegal Creameries have proposed that Article 3 of Directive 75/268/EEC be extended by adding a paragraph 6 as follows:

“Severely Handicapped Areas which have similar limitations of the possibilities of using the land as Mountain Areas due to -

a combination of climatological factors, of high precipitation and windspeed, low air temperature and evapotranspiration with soils of low permeability, the effect of which is substantially to shorten the growing season and to limit the possibilities for using the land”.

D. VIEWS OF THE JOINT COMMITTEE

24.It is estimated that the marginalised farm sector in Ireland includes 55 per cent of all farm operators. In a recent report published by An Foras Taluntais ⁽¹⁾ it is stated

“Farmers in the marginalised farm sector tend to have smaller farms and to be concentrated in Connaught and Ulster”.

In an earlier report ⁽²⁾ on potential land use of Irish soils the percentage of land in the “Poor” category is shown as highest in the following regions:-

The “Poor” category is defined as “generally of a marginal nature with many limitations to agricultural use such as weak structure, wetness, shallow depth, steep slopes and high altitude”.

25.The Joint Committee is mindful of the importance of support schemes for farmers in disadvantaged areas given the prevailing conditions. The recognised objectives of a disadvantaged areas scheme is the maintenance of reasonable incomes for farmers in such areas. The Joint Committee is concerned that the maximum benefit should derive from the operation of such schemes. In this regard the Joint Committee is strongly of the view that the off-farm income limit of £3,500 should be increased to the level of the average industrial wage in order to utilise fully the available 50% E.E.C. refund.

26.The Joint Committee is aware of the submission relating to area reclassification and addition of new disadvantaged areas which is at present under examination by the Commission.

In order that the full benefits of the Directive relating to less favoured areas should accrue to this country it feels that this submission should be strongly pressed, not with the view that Ireland is again approaching Brussels cap in hand but rather with the view that a large proportion of the country falls within the scope of the Directive and therefore is deserving of the benefits it offers.

27.The Joint Committee is most impressed with the case for reclassification made by the North Connacht Farmers Co-op and commends them on their work in researching and presenting their arguments. The statistics they have compiled make the most compelling arguments in support of their case.

28.The question of extending the status of mountain areas to certain Disadvantaged Areas which is the case made by North Connacht Farmers is an issue which has been going on for a number of years now. It has been the subject of specific representations to the EEC Commission which has, so far, failed to come forward with a proposal for consideration by the Council of Ministers. The Department of Agriculture has assured the Joint Committee that they are continuing to press the Commission on the matter and the issue has been raised separately in the context of the present discussions in the Council on the Commission’s new proposals on agricultural structures.

29.The Joint Committee is aware of the argument that an acceptance of the N.C.F. case might pose difficulties for the Commission in that having conceded the point they would be inundated with similar submissions. However the Joint Committee feel that the case should be judged on its merits. The Cantal region has been classified as one of the most severely handicapped areas in the Community but as the N.C.F. has demonstrated in its analysis, it is capable of higher yields both in respect of tillage crops and milk production than Mayo. Yet it fares better than Mayo in respect of Community support.

30.The Joint Committee strongly supports the case for reclassification of all such areas and urges that it be vigourously pursued to a successful conclusion.

31.The Joint Committee while pleased to be informed that progress under the Western Package has been generally satisfactory was disappointed that there has been little interest shown in private afforestation.

In view of the present climate of budgetary restraint and the pressures being applied on agricultural production generally, (for example the application of the Milk Super Levy) the Joint Committee feels that private afforestation might have proved a more attractive option than has apparently been the case.

32.The Joint Committee feels that afforestation should be encouraged for the following reasons:-

(1)The likely ongoing deficiency in the supply of timber in the EEC.

(2)The grants available are most attractive, 85% for farmers and 70% for others, for forestry development including ground preparation, ploughing, drainage, planting and fencing. Grants of up to 80% are also available for shelter belts.

(3)Areas regarded as marginal for agricultural production in Ireland are among the most productive in Western Europe for tree growth.

(4)Greater tree production could also have a beneficial effect on our balance of payments as Ireland is at present a net importer of timber and timber products. Ireland has the potential to develop a substantial export market to become a major timber supply source within the E.E.C.

33.There appears to be a traditional lack of interest in private planting among Irish farmers. In this regard the Joint Committee was particularly interested in a proposal by I.C.O.S. to develop two pilot co-operative forestry projects under the umbrella of existing agricultural co-operatives in two regions:-

(1)the North central region covering counties Leitrim, East Sligo, South Donegal and West Cavan and

(2)County Clare.

The aims of the project would be to establish a more realistic acreage of forestry in the regions (at present 8%) while ensuring that the establishment of such forests is carried on under the control and direction of the local population and in a way that will improve and enhance the environment of the region. Such projects would also provide greater employment opportunities through better land use and would develop the amenities and tourist potential of the regions concerned.

34.The Joint Committee is of the view that to overcome what might be described as a national prejudice against this type of farming, special efforts must be made to educate and inform people as to the benefits of afforestation. In this regard a pilot scheme as advocated by I.C.O.S. could prove invaluable.

35.In relation to the problem of exploring how better land management and alternative land uses might be encouraged the National Planning Board have stated that they consider forestry policy” to be of particular relevance to the whole land mobility question”.⁽¹⁾

The Joint Committee will be examining community forestry measures in a forthcoming report when it will discuss this matter in greater detail.

36.The Joint Committee is also disappointed that the orientation of agricultural production has not been a success. The probable reasons have been outlined in paragraph 12. In respect of the calf-to-beef scheme the Joint Committee feel that there would have been a much greater up-take if the aid was given by means of direct capital grant rather than through interest subsidy.

Also the existing scheme does not ideally suit farming practices in the West of Ireland and the possibility of revising it to a calf-to-store scheme should be examined.

37.By comparison, the Western Drainage Scheme operated under Directive 78/628 has been most successful. The Joint Committee is pleased to learn that an extra £3 million is being allocated for operations in 1986 and 1987 under the revised Scheme.⁽¹⁾ The Joint Committee understands that the Department of Agriculture is considering (a) how applications received between 1st January 1982 and 1st February 1984 (the date the Department stopped accepting applications) should be dealt with as the limit of 150,000 hectares set by the Directive is likely to be taken up by applications received prior to 1/1/82 (b) the whole question of future western drainage.

In view of the success of the scheme the Joint Committee urges that an extension of the 150,000 hectare limit be sought at the earliest opportunity.

CONCLUSION

38.The Joint Committee is aware of recent criticisms that Ireland has not taken advantage of the opportunities of E.E.C. membership. For example this report has dealt with the poor up-take of the afforestation element in the Western Package. Because of decreasing flexibility at European level in dealing with food surpluses it is imperative that non-traditional areas of farming must now be exploited.

39.The Joint Committee was disappointed to learn that there is only one agricultural office available for every 11,000 farm holdings in the West compared with one office for every 3,300 farm holdings in the rest of the country and feels that more emphasis should be placed on information and education programmes to ensure that there is full awareness of what can be achieved through existing community measures.

40.In view of the importance the Joint Committee attaches to this matter it specifically requests a debate in the Dail and Seanad at the earliest opportunity.

12 December, 1984.

(* confined to hogget ewes only in lowland areas)

*Payment, which is further limited to £18 per forage acre devoted to grazing of cattle and sheep is made to applicants who occupy and farm 7½ acres in designated Disadvantaged Areas and undertake to do so for 5 years.

(1) District electoral Division

(1) Dail Eireann Official Report Vol. 354 No. 3.

(1) COPA -

Committee of Agricultural Organisations in the European

Community

COGECA -

General Committee for Agricultural Co-operation in the EEC.

(1) “Review of Socio-Economic Policy in the Community” Para 26

(1) Marginalisation in Irish Agriculture - Carmel Kelleher and Ann O’Mahony.

(Socio-Economic Research Series No. 4 1984)

(2) Soil Associations of Ireland and their Land Use Potential. (Explanatory bulletin to Soil Map of Ireland 1980) by M.G. Gardiner and T. Radford.

(1) Proposals for Plan 1984-1987

National Planning Board April 1981

(1) Building on reality 1985-87

(Paragraph 7.68)