To ask the Minister of Agriculture and Rural Development for her assessment of the Farm Management Deposit Scheme, suggested by the Ulster Farmers Union, as a risk management tool against future market volatility.

Mrs O'Neill

The farm management deposit scheme, which operates in Australia, is one of a number of mechanisms that can assist farmers to deal with fluctuations in their annual farm income. The deposit scheme allows farmers to set aside pre-tax income in years of high income and then to draw on these deposits in years of low income, with tax being paid in the year in which the money is withdrawn. This type of system could be beneficial for farmers. However, taxation policy is not a devolved matter and the introduction of such a scheme here is not within my gift. Our own tax system permits farmers to average profits over a two-year period, which allows farmers to spread their tax burden. I would support extending the number of years over which this averaging can take place, but again this is not a devolved matter. Fluctuating markets is not a new problem, but it remains a very difficult issue for farmers. For me, it is one of the reasons why direct payments, such as the single farm payment, are so important to the agricultural industry. These funds provide a regular income stream, the value of which is reasonably well known in advance. I fought hard to maintain the system of direct payments in the recent reform of CAP and will continue to do so.

Mrs O'Neill

Obviously, pricing is a commercial issue. There is a whole range of things that the Department can do to assist the industry, particularly around knowledge transfer, providing advice, helping people to work up business plans and promoting greater efficiency on farm. In looking at what I and the Department can do, we will concentrate on those areas. The other key area that we have to concentrate on at Executive level, not just my Department but DETI, is new markets. We need to explore new markets for the industry. Again, that will help the price in simple supply and demand. These are the areas that we are focusing on in the Department. Your initial question was around being able to spread the farm deposit scheme across a number of years. I would be very supportive of that, and I have actually written to DEFRA to raise that point.

Mr G Robinson

As the trend is towards continuing growth and expansion opportunities for our farming communities, does the Minister agree that it is important to assist our farmers through these difficult financial times?

Mrs O'Neill

Absolutely. We have seen prices fall in the dairy industry and, at the end of last year, in the beef sector. Thankfully, they have improved, but it is a very challenging situation. As I said in a previous answer, we have had a rise in input costs. The value of the euro and all the challenges that are there seem to be conspiring against the farming industry at this time. It is so important that my Department does all that it can to help people through what are very difficult times. One of the things that I did recently was to have a meeting with all the main banks around their being flexible in dealing with their farming customers, given the pricing situation that we are facing. That was quite a positive engagement. I was accompanied by the UFU, which was quite positive in that we were speaking with one voice in asking the banks for a bit more flexibility for the industry as it goes through what is a very difficult time.

Mr Lynch

Go raibh maith agat, a LeasCheann Comhairle. Gabhaim buíochas leis an Aire as na freagraí seo. The Minister mentioned the dairy sector in her last answer and knows that it is a difficult time for that sector. What support can DARD provide to the dairy sector at this time?

Mrs O'Neill

As I said, both I and my Department are fully supportive of the dairy industry. We will continue to do what we can throughout this difficult time. One of the recent issues was the introduction of the Russian ban on dairy imports. The Enterprise Minister and I wrote to the Secretary of State for Environment, Food and Rural Affairs advising of the concerns that were expressed by the local industry, particularly around the ban. We emphasised the need for support from EU level. That is something that I also raised with Commissioner Ciolo? when I was in Brussels in September. I continue to lobby DEFRA on its approach to Europe. We have very different views about supports for the industry. However, I will always fight the corner for our industry. As I said earlier, I, alongside the UFU, recently met the banks to discuss cash-flow concerns. That was a very useful conversation. We have asked the banks to be very proactive, sympathetic and flexible and to work with the industry. We are hopeful that that will be the experience of farmers. Given the drop in prices, the Russian ban and all the other challenges that are there for the industry, it is so important that I continue to do whatever I can. Alongside the supports that we provide, particularly around advice, we need to be looking at new markets and at what support we can provide for the industry to get into those new markets. How can we target them? What do we have to offer? What is our unique selling point?

I am keen to work with DETI on those areas to live up to the aspirations of the Going for Growth strategy.