Sale of harvesting rights to Coillte forests an option-- Coveney

Just before Christmas, Matt Dempsey spoke with Minister for Agriculture, Food and the Marine Simon Coveney and reviewed his progress and ambitions as 2011 comes to a close

Even though he is less than a year in office, many could struggle to remember Simon Coveney's predecessor as Minister for Agriculture. His energy and enthusiasm is clearly visible and he obviously enjoys the job.

He is also lucky; his term in office has coincided with both a surge in farm prices, a good farming year in most parts of the country and buoyant markets in most sectors.

The sector is also to the forefront in politicians' minds as they search for good economic news in a climate of national economic difficulties.

As Minister, Simon Coveney inherited the Harvest 2020 report and has wisely decided to stick with the targets and format, though he has doubled the target for the value of beef output to be achieved from 20% to 40%.

As he came into office in March, what did he consider to be his main challenge?

Simon Coveney: ''It was most important to achieve early credibility among farmers. They will form an early judgement on a new Minister, and if credibility is not established, then you will struggle. I wanted to be as up front as possible and I was under pressure straight away because there was no budgetary provision for a new AEOS scheme to replace REPS.

''But farmers are practical people and they accept blunt, straightforward talk. They also rightly expect a lot from the Minister. In the overall context, agriculture has exciting potential for the next 10 years.

Taking each sector, was he taken aback at the surge in milk quota prices in the recent auction?

''No, there is a real opportunity in milk production once quotas go but, for the next few years, it will be very tight. Since July/August, dairy farmers have been acting very responsibly with early drying off, once-a-day milking, etc, which I hope will continue but, looking beyond that, there is a huge capacity to grow.''

Minister Coveney is not uneasy about the growing dependence of the world dairy trade on China, with 1.2 billion people and a growing middle class, while on a global basis demand is on an 'awesome' scale. From an Irish perspective, we should be targeting premium markets, emphasising the safety, consistency and sustainability of our products.

The Minister admits he was disappointed at the reaction to his Bord Bia dairy levy proposal. ''I am not someone to seek conflict, and it was not my intention to undermine the Dairy Board, but it is a huge challenge to prepare for a dramatic increase in milk output. I expect in 2015 that we will see a 15% to 18% increase from the existing herd.

''Farmers need to know that there will be a price and that we can find new markets and brand professionally. The Irish Dairy Board is doing a very good job but there are other resources and experience in building brands in, for example, seafood, lamb and beef, so we should not miss the opportunity to complement the work of Bord Bia.

''We will work through the issue with the industry, but I won't force a levy on farmers and the industry if that is what they don't want.''

With the general dairy implementation group report done, who will oversee it now that Sean Brady has joined Connacht Gold? ''Me, I chair the implementation group. The report is done. There is plenty of expertise around and the structures are there.''

Beef and vets

As the year draws to a close, there is a dispute with the temporary veterinary inspectors in the meat factories.

Simon Coveney said: The bottom line is that nobody linked to my Department is immune to being reviewed. We have to ensure that there is no duplication of expenditure. This veterinary inspection system in the meat factories is costing €18m a year. We want to reduce the cost but not undermine the integrity of the service, notwithstanding a legitimate value for money concern. Veterinary practitioners are well recompensed on their job on a contract basis. Any future decisions will be on the basis of a conciliation process and it is my expectation that an acceptable compromise can be reached in the New Year.

It is not all perfect in other countries and we are not going to replicate the system in Britain, but we will sit down and look at the essential roles. In the long term, vets will remain an important part of the system and we will not undermine its integrity.

But this is an ongoing process - the Minister would not be drawn on whether he would use Spanish or Hungarian vets instead of Irish vets if it came to a crunch.

It is very clear that the Minister wants to encourage the development of the beef sector in parallel with growth in the dairy sector.

He would like to see continued support for the Suckler Cow Welfare Scheme. ''With all the excitement around dairying, there is a huge value in having the suckler herd for the production of high quality beef. We don't want our beef industry simply to become a bi-product of the dairy sector.''

He acknowledged that they had considered using 'Article 68 Money'; in other words, skimming a slice, up to 10% is allowed, off the Single Farm Payment but decided not to. In any event, money was found in this year's budget to continue the scheme which officially ends in 2012. Next year's budget is a long way away. Not surprisingly, this could hardly be discussed at this stage but Minister Coveney's commitment to the scheme is clear.

On this and other schemes, such as REPS and Disadvantaged Areas, he added: ''Ireland will not be in a permanent position of having to cut spending, so I would hope that we would be in a position to spend more in the future.''

However, he strongly defended his action to protect active farmers in the Disadvantaged Areas adjustments.

CAP reform

''The Single Farm Payment is very important. We want to avoid a switch from supporting the progressive and productive farmers to supporting a 'land ownership model'.''

The Minister denied that it was unclear what he actually wanted as distinct from what he was against. ''We are very clear what we want for the Single Farm Payment. What is being proposed does not work in Ireland. But we will be required to change the system; the status quo of basing it on production in 2002 is not fair and we can't argue on that.

''We are looking for flexibility for a different model so what we are proposing is much closer along the line proposed by the Commission for overall shares going to individual countries. So, what we are proposing is that those on the very high payments would lose approximately 10% to 15% and that money would be shifted to those on the lowest payments, gaining 15% to 25% from this money.

''This would be more equitable while under the present proposals there would be losses of 40% to 50% for many farmers. We also want a long transition period but, even with that, we are still not going to transit to a common payment per acre basis by 2020.''

On the 2014 reference year issue, the Minister disclosed that his officials had warned him a month in advance that 2014 was going to be proposed as a base year.

He had taken it up with the Commissioner, which resulted in the 2011 qualifying year, though, as he said: ''It doesn't solve the problem, but no other country has raised it as an issue''.

He will have more discussion on the issue, though he confirmed that eligibility for the Single Farm Payment from a 2011 application can transfer to the 2014 base.

Sugar

Will the Irish industry revive? Will there be an Irish industry in 10 years time? ''I would be quite optimistic. I accept that Irish sugar beet cannot compete with sugar cane but we did not foresee the growth in sugar demand, the new competition for land and the role of sugar beet in anaerobic digesters.

''So, if world prices stay over €500 per tonne (at present EU prices are approximately €700 per tonne), then it should be viable. From my point of view as Minister, I need to either get a quota for an Irish industry or see that the present quota system comes to an end.

''I have seen both the reports and they are impressive, but we are not going to subsidise a new sugar industry and then see it collapse. It will need to stack up, with farmers and private investors putting in money. Ethanol production will be an integral part of any project.''

Forestry and alternative energy

Minister Coveney is understandably proud of how he has managed to maintain a relatively complete forestry programme. He managed to maintain both premia and enough money to have a planting programme of about 6,500 acres, though, as he said, he was fortunate that he could carry over €28 million in capital savings to underpin the premium payments. He is already preparing for another struggle over the 2013 budgetary allocation, but he is clearly committed to forestry. ''We are playing catch up here in relation to other EU member states.''

He made two extra important points in relation to forestry:

''We are examining the option of selling the harvesting rights to the Coillte forests for a period of up to 70 to 80 years.

''We are not touching the high amenity areas or considering selling the underlying land but the standing timber could bring in somewhere between €1.1 and €1.8 billion. This would not go towards paying off bank debt, but some at least would go towards an afforestation programme.''

The Minister disclosed that contrary to expectation, he will not get rid of the replanting obligation on forestry land that has been harvested.

On the general bioenergy/renewable areas, he confirmed that he is doing away with the seven-year rule for miscanthus and willow. ''I don't want a farmer to feel trapped. If a crop has failed or he wants to plough it up, he can do so.''

But he also acknowledged that at least as long as current national budgetary pressures last, farmers and others should not expect a major increase in REFIT rates.