Official Report: Minutes of Evidence

The Chairperson (Mr Irwin): I welcome Lorraine Lynas, the head of the rural development programme management branch; Gareth Evans, the axis 3 implementation manager; Martin McKendry, the head of the College of Agriculture, Food and Rural Enterprise (CAFRE) development service; and Colette McMaster, the director of food, farm and rural policy. We ask you to take up to 10 minutes for your presentation, and then we will ask questions.

Mrs Colette McMaster (Department of Agriculture and Rural Development): Thank you, Chair and members, for the opportunity to provide you with a further update briefing on the 2014-2020 rural development programme (RDP). With us, we have an additional colleague, Brian Ervine, from the environmental policy branch, who is available to be called forward as appropriate, if you want to ask particular questions during the session.

Officials were asked to brief the Committee on the new RDP on 21 April and to set out the European Commission's formal observations on the programme that we had submitted. The Commission's letter made a total of 315 observations or recommendations, and officials worked intensively with the Commission to resolve those issues. That led to formal programme approval of our RDP by Commissioner Hogan on 25 August. The document that we provided to the Committee before today's meeting summarises the RDP strategy that has been selected to address the particular needs that have been identified in Northern Ireland. It also summarises the support available in the programme for each of the six EU priorities for rural development. The high-level key targets for each priority are also outlined in the document. The full programme and its associated documents are available on the DARD website. These are substantial documents that total 1,022 pages.

I draw the Committee's attention to a number of points about the farm business improvement scheme (FBIS), organic farming support and areas of natural constraint (ANC). Under priorities 2 and 3, we have signposted the package of schemes that form the farm business improvement scheme.

In response to the Commission's observations on organic farming, the final RDP includes support for conversion to and continued management of organic farming methods. In addition, as the Committee is aware, the Department sought applications to the 2016 ANC scheme at risk as part of the single application form process, which closed on 15 May. That areas of natural constraint scheme has now been approved in the new RDP.

Achieving formal EU approval for the RDP in July and obtaining the Executive's agreement in June 2014 for the outline budget of £623 million, which includes up to £250 million funding for the farm business improvement scheme, were two significant milestones for the programme. In parallel with beginning the formal EU programme approval, officials have been working to obtain the necessary business case approvals to develop the schemes and design the delivery processes. The next significant milestone is the launch of the new RDP, which is happening this autumn, with the opening of phase 1 of two major programmes: the LEADER programme and the farm business improvement scheme. Phase 1 of the LEADER programme is now under way, and phase 1 of the farm business improvement scheme is expected to open shortly, with the establishment of business development groups for farmers.

Under phase 1 of the LEADER programme, the 10 new rural local action groups (LAGs) have been asked to develop and submit an interim rural development strategy. The local area strategies are being drawn up in conjunction with the council community plans and in consultation with the local community, who are being asked about funding priorities in their areas.

The local strategies will identify the priorities and needs of each area and set out how the objectives of the LEADER programme will be met. DARD will assess the strategies to formalise the establishment of the LAGs and to allocate their budget. That is an important stage for LEADER, and the Minister is keen to urge stakeholders, community groups, rural businesses and communities to take part in the consultation on the strategies. The LEADER programme will be an important source of funding and will provide excellent opportunities for the economic and social enhancement of Northern Ireland's rural areas. My colleague Gareth Evans will be happy to provide you with further details about the LEADER programme.

The package of farm business improvement schemes will include measures aimed at knowledge transfer, innovation, cooperation and capital investment to help to support sustainable growth in the sector. We are planning to roll out the package in a phased way, starting with knowledge transfer this autumn. Phase 1 of the farm business improvement scheme will focus on making advice and support available to farmers to help them to identify clearly their needs and make the right decisions about developing their business.

DARD is planning two distinct knowledge transfer sub-schemes: business development groups for farmers, which will be a programme for groups of farmers facilitated by a CAFRE adviser to learn about business management, new technologies and innovative ways of working; and farm family key skills, which will be a suite of short training courses for individual farmers that complement the business development groups but will be a shorter, more focused alternative for farmers.

The business development groups will open first. The next steps will be to finalise scheme design, to obtain formal business case approval and to ask the RDP monitoring committee to consider the proposed selection criteria. We hope to do that when the monitoring committee meets later this month. Subject to that, it is planned to open the business development groups for farmers for applications later this month. My colleague Martin McKendry from CAFRE can provide more information about the plans for the scheme and what we hope to achieve. Later in 2015-16, DARD plans to open the training schemes under farm family key skills, including farm safety, business planning, animal health training and ICT training to support DARD's business objective.

This is a challenging time for the industry, and, by launching the knowledge transfer measures first, we aim to help farmers to think carefully about their farm and income and to acquire the tools that will help them to make the right decisions about their business now and in the future before they decide to take on additional financial commitments. The other farm business improvement sub-schemes will follow in a coordinated manner, including the proposed capital programme that is planned for next year.

If the Committee would find it helpful, DARD wants to offer a presentation about the details of the schemes once they are launched, including selection criteria, methods of delivery and administration costs. In addition, subject to business case approval, the first forestry schemes are planned to open this autumn in readiness for the 2015-16 tree planting season.

The environmental farming scheme (EFS) is the new agrienvironment scheme, and it is scheduled to open next summer with a programme of awareness training to take place from May 2016 prior to the scheme opening for applications. This will assist farmers to understand the scheme and its requirements and to ensure that the right scheme options are selected, thus reducing the risk of non-compliance. The opening of the EFS will be subject to IT systems and the necessary business case approval being in place. My colleague Brian Ervine from the environmental policy branch is available to come forward to the table if members have any particular questions about the plans for the new environmental farming scheme. Meanwhile, expenditure under the new RDP is under way for legacy agrienvironment and forestry schemes and the processing and marketing grants scheme.

There will be an opportunity to amend or modify the RDP during its lifetime, which will be up to 2023. The EU-approved programme refers to possible emerging needs in Northern Ireland, such as those related to the use of financial instruments, land management and genomics. That will allow us to modify the programme in future to address those needs if appropriate. Any future amendments to the programme must be approved by the European Commission and supported by a sound evidence base.

EU regulations require us to put in place a detailed monitoring and evaluation system to assess the impact of the RDP's implementation. As part of this system, a new rural development programme monitoring committee has been established to oversee the remainder of the 2007-2013 RDP and the implementation of the 2014-2020 RDP. The RDP monitoring committee has a specific role in overseeing implementation of the programme. In particular, it will consider the selection criteria for various measures, consider any future amendments and approve annual implementation reports before submission to the European Commission. The committee has 24 members representing 18 organisations. For the three EU objectives of the programme, seven members represent competitiveness, five members represent the environment, and six members represent broader rural development. DARD will work closely with the programme monitoring committee over the period of the programme and particularly over the next year to ensure that schemes are open for application and the success of the programme is monitored.

That is all that I want to say at this point. We are happy to take questions or provide further clarification.

The Chairperson (Mr Irwin): Thank you very much for your presentation. The farm business improvement scheme requires DFP approval. I understand that an outline business case (OBC) has been submitted to DFP. When do you expect to get approval for that? Have you any concerns about it?

Mrs McMaster: We started on the farm business improvement scheme with a strategic outline case for the package as a whole. We had approval for that in April. Following that, we have been working on four separate outline business cases for the farm business improvement schemes. One scheme is knowledge transfer, and the others are for cooperation, innovation and technology advancement, and capital investment. There are four separate OBCs covering all the strands of the farm business improvement scheme. Our plan is to roll out the farm business improvement scheme in a phased way, starting with the knowledge transfer schemes. That is the first outline business case, for which we hope to get approval shortly. Hopefully, we are in the final stages of that. Subject to that being achieved, we plan to open phase 1 of the knowledge transfer measures later this month. As I said, there will be two sub-schemes: business development groups and a package of training schemes.

The Chairperson (Mr Irwin): Will the Department deliver the scheme, or will it be an outside organisation?

Mrs McMaster: There is likely to be a combination in the delivery of the farm business improvement scheme as a whole from within DARD and from external providers.

The Chairperson (Mr Irwin): What about the £193 million for the main scheme?

Mrs McMaster: The delivery options for the capital scheme are all being tested in the business cases. There are options on which is the best value for money and the best use of resource from within DARD or the best use of resource if we were to bring in delivery. A range of options are being tested as part of the business cases.

The Chairperson (Mr Irwin): Are you saying that the decision has not yet been made?

Mrs McMaster: The final decision on the delivery of the capital scheme has not yet been made. Value for money and the best use of resource will be taken into account for the delivery of that package.

The Chairperson (Mr Irwin): I presume that the cost of delivery has to be taken out of the sums of money that are mentioned in your briefing?

Mrs McMaster: There are different aspects to the delivery costs. Part of the costs will come from the technical assistance allocation in the RDP. The EU allows for a maximum of 4% of EU funds to be spent on technical assistance. In the current programme, for example, technical assistance was mostly used to fund the axis 1 delivery agent. The technical assistance funds are vital, but, at the same time, quite a lot of the delivery costs will come from within DARD budgets. That was the case in the existing programme and will be the case for the new programme. There will be a combination.

The Chairperson (Mr Irwin): It is not exactly clear what will be taken out of the grant. You said that there is an allowance of up to 4% but that you are not sure at this stage whether that will happen or how much of it will be needed.

Mrs McMaster: The budget has been allocated in the programme to allow for that technical assistance budget. That is separate to the moneys that have been allocated to the scheme.

Mrs Lorraine Lynas (Department of Agriculture and Rural Development): I think that it is clear that the business cases are more advanced for some of the schemes — for example, we are very clear on the delivery of knowledge transfer. Martin might comment a bit more, but CAFRE advisers are being provided for that scheme, so it is not being charged to the programme. An exception is when we might need additional support. If there are insufficient poultry advisers, for example, we might procure some support to help with that. Help is also being procured for benchmarking, but an administration team is being set up in DARD to deliver the farm family key skills and the business development groups. We can charge some of those costs to the programme because the regulation is very clear: it is the cost of delivery. For that measure, some of the cost can be met from the programme. Where the business cases are further advanced, we are clearer about how we are using the resources most effectively.

The Chairperson (Mr Irwin): In the wider rural development programme, a lot of money was spent on capital projects in the last programme. What is the aim this time? There is a lot of concern about the amount of money that was spent on capital projects in the last programme.

Mr Gareth Evans (Department of Agriculture and Rural Development): Do you mean under the LEADER side of things?

The Chairperson (Mr Irwin): Yes, on the LEADER side.

Mr Evans: A large amount of funding under LEADER is capital, but it is not for the strategic type of projects that were necessary before. I should say that, without those projects, we would not have achieved a 100% spend under LEADER, which is a first in my time at DARD. You might not have liked the capital projects. There were not many of them, but they helped us to invest £100 million in rural areas.

The Chairperson (Mr Irwin): Yes, but one would hope that the programme was set up to try to create jobs in rural areas. In many cases, it did not do that. It is very important that, in this programme, more emphasis is put on rural business and jobs.

Mr Evans: The majority of the emphasis on the LEADER side is on rural business and, in particular, job creation. It is up to each local action group, however, to make that decision on what it sees as the needs in its area and then to prioritise that need. We can give the groups a certain amount of direction — we have done that — but it is still up to each group in each area.

What I will say, however, on the back of the old programme, is that, as of yesterday, we passed the 1,000-job mark on the old axis 3 programme. We never thought that we would achieve that. This programme, however, is definitely predicated on job creation, and we are putting in a lot of supporting structures with councils, with the Go for It programme and with Invest NI to ensure that the support is there for businesses and to be able to bring them forward.

The Chairperson (Mr Irwin): That is vital.

Mr Byrne: I welcome the presentation. It is fair to say that the farming community has waited for a long time to see what would unfold.

How much of the quantum of £623 million will end up going directly into farming communities? How much will go directly into community facilities or projects?

Mrs McMaster: There are allocations for each scheme. Schemes that will be delivered by DARD and others will be delivered through the LEADER programme. That is maybe where you are looking for clarification.

The schemes that will be delivered under the LEADER programme will be based on local development strategies. Those are being drawn up by the LAGs in conjunction with the councils and will take account of identified local needs in those areas. They will be tailored to the needs and priorities that are identified in local areas. They will very much be driven from the bottom up, so how it will be spent will depend on the local development strategy that is determined for each area.

Mr Byrne: You talked about £70 million plus £10 million for rural tourism under the LEADER programme. Of that £70 million, how much will go directly into community-type facilities?

Mrs McMaster: I do not think that we can say. It will depend on the local development strategies for each —

Mr Byrne: How much of the £70 million will go on administration?

Mrs McMaster: Under EU rules, an amount can go on administration.

Mr Evans: Yes, 22% is set aside for administration. That is 3% less than the maximum that is allowed under EU rules. We did a review of the administration in the previous programme, and we also looked at need. The Commission is very keen on a process of animation and bringing people into the process, so a bit of extra budget was added. As we did under the current programme, all that we say to people is that it is up to 22%, which is 3% less than the maximum that is allowed by the Commission. In the current programme, we are bottoming out at between 18% and 19%.

Mr Byrne: So £14 million will go on administration.

Is the £10 million for rural tourism earmarked for private tourist projects through which farmers or individuals in the rural community might want to provide tourist facilities, or will it go to the community-related sector?

Mr Evans: If farmers or rural dwellers wish to take forward a tourism business idea, they can do so under LEADER's rural business investment scheme. The rural tourism scheme is very much aimed at intermediate-sized projects. It will be driven forward by councils in partnership with strategic bodies such as the National Trust and Outdoor Recreation NI.

Mr Byrne: Will the business development groups for the FBIS have to be set up first before individual farmers can access that mechanism for a capital project on a farm?

Mrs McMaster: I will maybe ask Martin to comment on that as well. The purpose of setting up the knowledge transfer measures is, first, to help farmers to think through the requirements on their farms when they make a decision about whether they want to —

Mr Byrne: In other words, there will be a lot of bureaucracy first, and, before farmers get to any project, they will be assessed, ultimately to end up on a capital project.

Mrs McMaster: Not everybody will participate in the business development groups. Some people may want to commit to those —

Mr Byrne: That is why I ask the question. Do the business development groups have to be up and running before individual farmers can access the scheme?

Mrs McMaster: We want to do that, and we want to put those out first as phase 1. Alongside that, we want to provide training in things like business planning, which will help farmers who are not members of the groups to take the opportunity to think through what they really need on their farms. It is not that they will have to, but that is the way in which we are planning it. We think that the right thing to do is to put the knowledge transfer measures out there first.

Mr Martin McKendry (College of Agriculture, Food and Rural Enterprise): On the question of whether someone can make an application to the capital scheme without being in a business development group, the answer is yes. Anyone who is in the groups will be afforded the opportunity to develop business planning skills, how to put in place business plans and go forward, which will help them with their applications, but it is not essential.

Mr Byrne: Thanks, Martin. My last point is about genomics. Am I right in saying that there will be a midterm review of this programme?

Mrs Lynas: No, there will not be a midterm review. There was little value in the midterm review the last time, so the Commission has planned two enhanced annual reports at two different points. The programme is kept under review all the time. It will be one of the roles of the monitoring committee to bring forward any proposals.

Mr Byrne: Do I take it that a new DARD-led scheme — for example, for suckler cows — may be introduced under the genomic scheme?

Mrs McMaster: In future, we can make modifications to the programme. As part of the programme that we submitted, we identified a potential need for work on genomics, so there is a hook that we could use if there is evidence that we need to include an additional new scheme in the future. Given that we are working within the existing programme budget, if we are going to make any modification or add anything new to the programme, we would have to look at what we change about the way in which the programme is currently approved and how we could reallocate funding and so on. It is possible to make a modification when we introduce a new scheme, if that decision is made based on the evidence as we go along.

Mr Byrne: Thanks, Chairman. I am trying to see my way through the fog. [Laughter.]

The Chairperson (Mr Irwin): It is not easy.

Mr McAleer: Joe has already asked a question that I intended to ask, but, with the business development groups, does DARD have plans to bring them out into local areas? You said that it would be facilitated by CAFRE advisers. Will it be possible to bring them into local areas to facilitate farmers who live in quite dispersed rural areas who might not be in a position to access a local CAFRE campus?

Mr McKendry: It is planned that local groups will be based in local areas, and they will be sector-based. There will be dairy groups, beef groups, sheep groups etc. There will be an application process to the scheme. The groups will be local, and there will be minimal delivery at any of the campuses. This will be delivered on farm with participating farmers in the groups. It is about peer learning and learning from each other. It will use the resources that are on the farms. Farmers will host the visits rather than bringing them to the campuses.

Mr McAleer: It will be on farms.

Mr McKendry: It will be on farms — very much so.

Mr McAleer: When we were hearing evidence during our recent review of regulation, things cropped up relating to other schemes whereby communication could be improved between DARD and the farmers. What steps will you take to ensure that farmers are aware of this and will know how to apply and where to apply for the business development groups?

Mr McKendry: We are working on a strong communication plan to get it out through the groups and farming organisations. We consulted widely across the Ulster Farmers' Union (UFU) and the Northern Ireland Agricultural Producers Association (NIAPA). We have already informed them that this is on its way. It will be online, in the press and on the radio. The information will go to farmers through advisers, relevant organisations and suppliers. We will use comprehensive methods to communicate.

We anticipate the programme being open for applications for between four and six weeks, so we can continually build on that and communicate it and advertise it widely.

Mr McAleer: Is it a rolling programme or is it a window —

Mr McKendry: Initially, for the year 2015-16, we have the funding available to cap that at 1,500 farmers and groups at the minute, so that will be the first tranche, but there will be another window — hopefully, if finance is available — in 2016-17. At the minute, we are capped at 1,500 farmers, but we hope to widen that out. The target within the business case is to get that to 3,000.

Mr McAleer: Finally, Gareth — I ask the Chair's indulgence — I am aware that the local action groups (LAGs) are working on their strategies: is that uniform, right across the North? Are they all at the same level? What is the anticipated timeline for areas to have their strategies signed off and be ready to open for applications?

Mr Evans: We put the strategy out around about the start of September, and we put a cut-off date of 31 December. We said, across the board, that if any of them has their strategy ready, they should submit it to the Department and we will carry out an assessment of it when it comes in, provided our strategic framework has been signed off. That will make that group eligible to receive a contract to deliver LEADER on the ground.

Mr McAleer: Are you confident they will all have their strategies in by that deadline?

Mr Evans: Certainly, the word I am getting on the ground is that people are aiming to have the strategies in for around about the beginning of November. However, we opened the window as far as December and, certainly, if there was an issue, that is something we could look at.

Mrs Dobson: I think that, like Joe Byrne, I am about to enter the fog. I also thank you for your briefing. I appreciate the Minister's speech and press release following the ploughing championships last week. Declan has touched largely on the first question that I was going to ask, about getting that message out to the farmers. Certainly, as an elected representative — and I am sure that others are the same — I have farmers coming up all the time and asking about it. They have no detail and they do not know any aspects of it. Are you confident that you have outlined to Declan how you are going to get that message out? I am thinking of the farmer working away on the farm who maybe does not have the time for social media and relies, to a large extent, on word of mouth and neighbouring farmers — or us, the elected representatives — telling them about this scheme. Are you confident that you will reach as many of those farmers as possible so that they are fully briefed and updated as to the farm business improvement scheme?

Mr McKendry: Through the means that I have outlined, at the minute, I think that we can get to all farmers. The other way is through the farm advisory system newsletter, which goes out to all farm businesses. We will advertise through that as well. Through the press, that newsletter, radio and online, there are a number of different tools that we can use, as well as local groups such as the union, NIAPA etc. We are quite confident that we can get the message out, at this stage.

Mrs Dobson: I hope that you are right, because there is not a lot —

Mr McKendry: It is a fair comment.

Mrs Dobson: They keep coming up and asking me about it at the minute. So, given the difficult situation that many farmers are currently facing, what advice will you be giving them when it comes to making applications to the scheme? I am thinking especially with regard to strand four, the capital investment aspect of the farm business improvement scheme. We do not want them to be overstretched entering the scheme so, obviously, that advice is crucial going forward. How are you going to advise them and make that advice known?

Mr McKendry: As Colette said, farmers who come into business development groups will have very clear training, and that applies to the whole area of business planning, economic benchmarking etc.

Mrs Dobson: But they do not have to engage with those groups, as Joe said.

Mr McKendry: They do not have to, no. However, within the farm family key skills, there is also provision for training in business planning for farmers who do not wish to join a business development group —

Mrs Dobson: Will that be one to one, almost like a mentoring system to take them through the process?

Mr McKendry: It will be groups of farmers coming together to learn about business planning and how to provide a good plan for a farm.

Mrs Dobson: But if an individual farmer wanted to sit down and get advice on a one-to-one basis, could that be provided?

Mr McKendry: Well, they —

Mrs Dobson: Must they be a member of a group of farmers or a member of the business development group? I am thinking of an individual farmer who is maybe keen to know about the capital investment aspect of it. We do not want to see them overstretched, so will that guidance be available directly to them individually?

Mrs McMaster: We are looking at the whole communications, and Martin has been talking about the communications of the business development groups. As we roll out further schemes, we want to have communications about the farm business improvement scheme as a whole and to help people to prepare for thinking about the capital schemes, so we will have guidance available for them. Perhaps there will be people who do not attend the training or are not in the groups, but we will want them to be aware of the sorts of things to think about. That will be part of our communications plan as we move towards that point. We want people to be thinking in advance. At this very early stage, we have some information on the DARD website about the business investment scheme. It suggests that people consider the legislative requirements — planning, health and safety, and so on. I think that we will be building on that and —

Mrs Dobson: Yes, but not every farmer will be going to the DARD website. You have spoken quite a lot about the business development groups. How will they work in practice? I would like to learn a wee bit more about them. As Joe Byrne said, they do not have to be involved with that, so how is this all going to be brought together and tied up? If an individual farmer requires a direct link on, for example, the capital investment aspect, must they engage with the business development group and be a member of a group of farmers? Have you thought of every aspect of it to assist the farmers going forward with this?

Mrs McMaster: Well, you do not have to be a member of the business development group or do the training; that is right. There will be people coming into this who may already have that sort of experience or have been involved in it in the past, and so on. You do not have to do it. It is still pretty early days for the capital scheme. We are starting the roll-out now. We want to build towards that and to plan communications. We will be talking to stakeholders as we do that. What is the best way —

Mrs Dobson: How do I advise a farmer who is interested in the capital scheme? What advice should I give him or her going forward?

Mrs McMaster: We are not at that stage yet.

Mrs Dobson: They are asking those questions already.

Mrs McMaster: Yes. At this stage, there is — and there will be information coming out about the training and so on. One of the things mentioned in the opening comments —

Mrs Dobson: When will we be at that stage, Colette? The first phase is already open, so when will we be — I know that this is the fourth strand of it — at that stage? When will we be in a position to give them that information early to make those decisions if they are going to take part?

Mrs McMaster: A lot of colleagues are working on the whole issue of communications and the delivery planning for those other schemes as part of the business cases. The capital scheme will come in the next phase, so it will be subsequent to the ones that we are doing now. It will be next year. What might be helpful is — I mentioned this in the opening comments — if colleagues offer a further presentation to the Committee when more of that planning and development for the various schemes is ready. By that point, some of the schemes will be launched.

Mrs Dobson: It is just that we are being asked questions now, and if I do not know how to answer them based on what you are telling me and you do not know how to answer them, how are the farmers going to know how to prepare for this when it comes down the line next year?

Mr McKendry: The advice that could be given to a farmer at this stage is to attend the training on business planning that will open early in the new year — well ahead of the launch of the capital grant scheme.

Mrs Dobson: They might not all attend the training due to time commitments. Who has time to —

Mr McKendry: That will be widely available in local areas; it will not all be on the campuses. There will be different training provided on different nights. That will raise awareness of what is in the scheme and the planning that is required. I think that that is their best port of call initially.

Mrs Dobson: I think it has just got foggier, Joe, has it not? Finally, then, what process will be in place for applicants to the scheme to submit a business case ahead of receiving funds? Can you tell us that?

Mrs McMaster: Do you mean as part of the application for the capital scheme?

Mrs Dobson: Yes.

Mrs McMaster: We are not at that stage yet; it is very early days on a lot of this. That scheme is still being developed and designed, and the business case is being developed currently. You are already ahead of that.

Mrs Dobson: Aye, but they are questions that I am being asked, and I am sure that other Members are being asked them.

Mrs McMaster: Yes. We are not asking at this stage for a business plan to be submitted in advance of the capital scheme. I think that was what you were asking or someone was asking you. That is not —

Mrs Dobson: Yes, but I would just like to be taken through the timescale of it. Basically, I can tell them nothing at the minute.

Mrs McMaster: The Department will want to come out and communicate this as we have it.

Mrs Dobson: You cannot even communicate it with us as the Agriculture Committee.

Mrs McMaster: At this stage, I am not able to give you the —

Mrs Dobson: You are here presenting on the rural development programme.

Mrs McMaster: Yes, absolutely.

Mrs Dobson: But you cannot —

The Chairperson (Mr Irwin): Am I right in saying that, under the farm business improvement scheme, everyone has to have a business plan? Is that right? That business plan would be submitted along with an application. Is that not right? What other way would you do it?

Mrs McMaster: What we have in mind is that, when the capital scheme is opening, the application itself will in essence require a form of business plan.

The Chairperson (Mr Irwin): Many farmers pay form fillers to do their IACS. Is it not the case that many farmers will have to pay for professional help to do a business plan?

Mrs Dobson: Not all. We do not.

The Chairperson (Mr Irwin): Not all, but many do; the vast majority of farmers do.

Mrs Dobson: Not all.

The Chairperson (Mr Irwin): The vast majority. They sometimes do their own for simple ones. A lot of them get professional help. In relation to business plans, is it not the case that many farmers will have to get professional help for them?

Mrs McMaster: Well, that is what —

The Chairperson (Mr Irwin): If the business case is not up to scratch, the bottom line is that they will not get a grant. It will be important that the business case stacks up and is good. The bottom line, I would have thought, is that they will have to get professional help.

Mrs Dobson: That is only a certain aspect of what it is asking. Obviously —

The Chairperson (Mr Irwin): To me it looks that way.

Mrs McMaster: The business development groups and the mentoring and the training that will be available through the farm business improvement scheme will help people think through their business planning. That is through the business development groups and the training, indeed, and that is the sort of additional short training courses that we are proposing to have, but it —

The Chairperson (Mr Irwin): That is OK if business plans are going to be very simple and easy to manage. According to what level of detail you are looking in the business plan, that is going to be the crux of the matter.

Mrs Lynas: I think that is the key that is missing here: these are proportionate business plans. They depend on the level of funding that you are applying for, because there are two tiers within the scheme. Obviously —

The Chairperson (Mr Irwin): It still will have to stack up, irrespective of whether it is small or large.

Mrs Lynas: Yes, it still will have to stack up, but it will be a proportionate template, depending on the level of funding that you are applying for. Those are what are being developed at the moment for tier one and tier two. Obviously, if it is a large capital investment, you expect something a lot bigger. If that farmer was looking for funding from the bank, the bank would also be expecting that level of detail in a business plan.

Mrs Dobson: Nobody is disputing that. Just to go back then, a farmer approaches me today or tomorrow, keen to know more about the farm business improvement scheme, which is open from October — open from now, essentially. We can tell them absolutely nothing about the capital investment aspect of it until next year or how they take that forward.

Mrs McMaster: Well, there is some information that we have just at this stage on the DARD website, but we will be updating that and adding to that, and we will be communicating that as well, as we have it. I suppose that it is early days in terms of the detail of the capital scheme.

Mrs Dobson: I cannot wait to tell a farmer that it is early days because of the detail, even though it is essentially open from now.

Mrs McMaster: I think, in terms of the farm business improvement scheme as a whole, we are launching that with the business development groups and the knowledge transfer measures. The capital scheme, to be clear, is not launching at this stage. It is currently in development. We have some information out there on it, but clearly we are aware that we will want to communicate that as we develop our thinking around that.

In terms of business planning, we are envisaging — as we have said — that the application form itself will incorporate the level of business plan that will be needed, but that will be proportionate to the type of support that someone is applying for. As we are designing the scheme, we are looking at a tier one and a tier two for the scheme, and there will be a different amount of evidence or thinking needed around those business plans.

Mr Poots: The EU says that you can spend 25% on administration, which only demonstrates the inefficiency of the European Union.

Mr Evans: That is what is in the regulations; it is not set by DARD.

Mr Poots: I know, but it says that you can spend that. That only demonstrates its inefficiency.

Mr Evans: But —

Mr Poots: Hold on a minute: I am asking the question here, and you had better hear it before you answer it. You are suggesting 22% then, which is 3% less, in spite of the fact that a number of the groups achieved 18% or 19%. How do you expect to get efficiency if you give them 22%? You would have a better chance of getting efficiency if you set it at that 18% or 19%. Even better than that, you could say to the LAGs, "You can spend 15%, and, if you spent more than that on administration, you have to find it from another source".

Mr Evans: If you listened to what I said earlier, one of the points that I made was that it is 22%. The current programmes run at 18% and 19%. There is 5%, which is additional administration funds that was not in the current programme, available for what the Commission calls animation, which is to allow administration staff to go out amongst potential applicants and mentor them through the process, so instead of spending an awful lot of time dealing with applications that end up going nowhere, you do that process up front. There is additional money from the Commission to do that, and that is why it is 22%.

Mr Poots: It is still less money on the ground.

Mr Evans: On the ground from the perspective of —

Mr Poots: Well, £70 million: 22% of £70 million is £15·4 million, which leaves less than £55 million to be put on the ground. We want to see the maximum amount of money going on the ground, not spent on administration. That does not deliver jobs — only in the actual process of doing it. It does not deliver long-term jobs, it does not deliver sustainability and it does not develop a capital programme in the way that you would want it to develop.

Mr Evans: If you do not have the administration in place to put the appropriate staffing and infrastructure in place, you will not get the quality applications coming through. We saw that very clearly on the current programme, where an awful lot of time was spent processing applications that were not fit for purpose and were never going to be fit for purpose. That is why the Commission has put that extra funding on the table for animation. In effect, our administration still is 17%. The extra 5% is for this animation fund to make the process a lot more efficient. One of the things we are doing is setting a target to turn around every application to a decision within 90 days. We did not have that in the current programme.

Mr Poots: What you are saying here today is that, by doing the animation, you will have fewer applications but better applications.

Mr Evans: Yes.

Mr Poots: Then you will need less administration to do those.

Mr Evans: That is what we hope, going forward.

Mr Poots: Then you will need less money to pay for the administration.

Mr Evans: It is up to 22%, and that is the challenge for the LAGs and councils doing the administration.

Mr Poots: But I would set the councils a much lower target and, if they wanted to spend more on administration, they would get it out of their ratepayers' resources. If you do not do that, people will end up spending it on administration, as opposed to it going on the ground.

Mrs Lynas: I want to reiterate what Gareth said: it is "up to". In the current programme, it was up to 20%. Administration spend is audited. It is based on actual spend. It is not something that they just think, "OK, we have got that money and we will spend it." When it all came in and was audited, and they had to prove how much time they had spent on delivering the programme, it came in at less than the 20% that was originally set in the programme. With regard to the point that Gareth is making about the 5% animation, the key to this is that, if you get higher quality, yes, they will spend less on administration, and we do not know what the effect of that is going to be until we work through that process, but they have to prove and show every penny that they spend, and it is audited on that. It is not as if they can just say, "OK, we have got that money; that is what we are going to spend on."

I take your point that it is not long-term jobs, but actually we are into our third or fourth programme, and there are some people in rural development who have got from one programme to the next, and those jobs have been there from one programme to the next. Even through the money that we have spent on axis 1 through countryside services, we have created a lot of rural jobs that people would not have access to should DARD deliver it all. There is a benefit that carries through. We build capacity in the rural communities to be able to move from one programme to the next, which is another key element of that money as well. We see that as having very much a positive benefit in rural areas.

Mr Poots: I think that you have been paying too much attention to Corbynomics if you think that it is creating jobs by using taxpayers' money to employ people to conduct administration. You need to look at that again. "Up to" means that you can spend 22%. I do not think that that is acceptable.

Priority 2 of the programme relates to enhancing farm viability and competitiveness of all types. There are a number of spends — £25 million is the big one — through knowledge transfer, farm key skills and so forth. Genomics was mentioned earlier. That is a key area where farms could be more efficient by investing in genetics. That would come into that kind of programme.

Mrs McMaster: It might well do in the future. At this stage, the agrifood strategy board is leading on a piece of work to look at how this might benefit Northern Ireland, and, if so, what sort of approach would be best to take here. It is doing a piece of work, and we are expecting to see it report on that in due course. Should there be a recommendation to introduce a scheme in the RDP that would support a genomics programme, we can look at that as part of a future modification of the programme. It is something that we have identified as a potential need in the programme, so it is something that we could do in future if we have the evidence to support that.

Mr Poots: The biggest issue for the agriculture sector is the global market and the prices that are available in the global market. Going for Growth is one thing, but achieving sustainability is actually more critical at the moment for people who are struggling to survive. Where in this programme are we going to assist people to deliver more efficient food production?

Mrs McMaster: The scheme itself is through knowledge transfer. Martin can say more about it, but it will focus on things like benchmarking, improving your performance, looking at how you can reduce costs, become more efficient and increase farm competitiveness, and so on. That is all part of what would be in the knowledge transfer aspects.

Mr Poots: That is fine. What about the practical things?

Mrs McMaster: Do you mean training and that sort of thing?

Mr Poots: No, assisting farmers to have more efficient farms.

Mrs McMaster: Through capital investment or through innovation —

Mr Poots: Well, there would be an element of that, yes.

Mrs McMaster: Some of the schemes in the farm business improvement scheme are to support and encourage the use of innovation, new technologies and so on. The innovation technology evaluation demonstration scheme is part of the farm business development scheme. There is support for farmers to work cooperatively so that together they can find ways of improving competitiveness and so on. All the schemes that are bracketed together to form part of the farm business improvement scheme are designed to help with the knowledge transfer, help to transfer ideas, benchmarking and innovation to encourage that and the capital investment that people might ultimately want to invest in as well to help improve their farms.

Mr Poots: I think that, with the money that is available, that particular priority is quite weak in how it will be divvied up and have practical outcomes, with farms becoming more efficient and sustainable.

Mrs McMaster: Are you looking at the table on priority 2?

Mr Poots: Yes.

Mrs McMaster: This is really the result of the consultation that we had with industry. How the programme is shaped and how we have allocated funding is all coming from the consultation that we did with stakeholders over the last three years or so. We have consulted on this and on the make-up of this package and so on. It has been tested out both in formal consultation and by talking directly to stakeholders.

Mr McKendry: There is very good research coming from ROI and New Zealand about farmers working in discussion groups and the financial benefits that accrue from that through the whole area of peer learning, learning from each other and learning from best practice. Through the business development groups, there is good potential to deliver economic benefit at farm level.

Mr Poots: I am not disagreeing with any of that. I think that what you have, on the face of it, is fine. I just do not think that there is enough over and above that. You need to put more in there.

Mrs McMaster: We can maybe add a bit more detail behind what is in the programme. What you are seeing there is a summary line in a table.

Mrs Lynas: With the business investment scheme, which is the capital element, regulations from the Commission require us to target the support towards the particular farms. We were able to do that on the basis of broad themes, one of those being on-farm resource and production efficiency. I will give you a few examples: construction of new farm buildings, refurbishment of existing buildings to improve production efficiency, new technologies and the purchase of new machinery to improve quality and soil structure. We have a lot on mechanisation and a lot on the efficiency of fertiliser and pesticide use. There is quite a bit of detail in the programme that will work its way into the guidance that goes out on the scheme.

The second theme was about resilience to adverse weather events, and this really came through a lot from what had been said during the fodder crisis and the bad winter that we had. There is a theme in there about adverse weather events and mitigating climate change, and that is very much about making our farms more resilient to that in the future. The third strand is on animal and plant health and health and safety on farms. There is a lot more detail in that, which goes into all of the types. The teams beneath this are working up the detail of the scheme, but the Commission was quite clear that we had to provide some kind of targeting for the scheme. It was a legal requirement to do so.

Mr McMullan: I have to congratulate you on the 90-day turnaround for applications, because a lot of the things that we are talking about today are problems that arose in the last programme. I sat on the programme the last time, and we spent more time arguing about these things and blaming everybody and anybody who walked by the door for everything that was going on. In that sense, it is a good thing to turn that round. Will there be part payments this time, as there were last time?

Mr Evans: Yes. Phased payments are being encouraged by the Commission. They are right through all of the schemes under LEADER.

Mr McMullan: I went to a consultation on the rural programme, and one of the things that were brought up was that there were no staged payments.

Mr Evans: That is definitely wrong.

Mr McMullan: I did not say anything at the meeting, and I was surprised that a couple of people at the meeting did not say anything either. There will be staged payments.

Mr Evans: Absolutely, yes.

Mr McMullan: When we are looking at levels of deprivation in areas, are we still using the Noble indices, or can we bypass them?

Mr Evans: We still look at the Noble indices, and I think that the need aspect has shifted slightly in that the need now is being demonstrated through the strategy. When you are developing your strategy, that is where you define the need, and that is where the local action group sets its priorities for investing the allocation of funding that it has. When it comes to the individual projects, certainly on the business measure, it is less important.

Mr McMullan: OK. What is Invest NI's role in this?

Mr Evans: The business scheme is on the edge of going into full integration with Invest NI's Go For It programme. The big difference with that programme is that we intend to have a lot of workshops. All the LAGs will have a workshop long before the database is open for applications. Hopefully, we will start putting a lot of information about the requirements for the programme into the public domain at the end of October. We will be telling any new applicants for a microbusiness that they must go on the Go For It programme. We will be asking existing microbusinesses to submit their business plan and telling them that that will be reviewed. It is a bit like the farming schemes, in that there is a requirement to have a business plan. We are tying in completely with the Go For It programme business plan, because, when we looked around for a model, that was the best fit for what we wanted to do under rural development.

Mr McMullan: What about the farming side of things for start-up businesses, and so on?

Mr Evans: Do you mean for farm diversification?

Mr McMullan: For the farming family, not just the farmer.

Mr Evans: There is no specific scheme for farm diversification. It is now just rural business investment. That will actually help some people.

Mr McMullan: Can a son or a daughter apply for it, as was the case the previous time?

Mr Evans: Anybody at all can apply, yes.

Mr McMullan: Those are the things that need to be got out.

People rightly brought up arguments, but, in a way, it is the same as was said the last time. We got through them. I think that this will be much better, because we have learnt from the last time. The 90-day turnaround will be good, because we spent more time looking at applications. As soon as you opened them, you knew that they were not right, but you still had to go through them.

Mr Evans: The rationale for being able to do that is the funding workshops. The work now goes in at the front end. That means that, when they come in, we should have a much higher hit rate of applications getting through the process and being funded.

Mr McMullan: There is also the issue about bringing the farmers in at the start to run them through a business plan and talk to them about what they are hoping to do, what they are hoping to buy and the schemes that they have for the farm. When word starts to get out, a lot of people will come on board. Farmers will know themselves that they have to be in that. They are resilient enough to know that, so I cannot see that being a big problem. I am looking forward to it starting, because it looks good, on paper anyway.

Mr Anderson: Thank you for your presentation. Colette, you said that there are opportunities to qualify or amend the programme as you go forward. Will you expand on that and say what it really means? Does it mean a transfer of funding to different projects, for instance? If one LEADER group is not spending a certain amount of money, can that money be shifted? What are we saying? I am looking for an explanation. Can it be modified with the approval of the EU?

Mrs McMaster: I was talking about the actual formal modification through the EU. You are maybe talking about —

Mr Anderson: What I am talking about is this: if one LEADER group is having difficulty spending in any one area, can money be shifted to another area? Are there opportunities for that to happen? That is what I am trying to get at.

Mr Evans: It can be. We did it at least twice under the old programme. We talked to the group that was having difficulties, and, with its agreement, it talked to some of its neighbouring LAGs that needed more funding. As a Department, we facilitated the process. We did not push one way or the other. We just facilitated the process. That has always been in there with every single LEADER programme.

Mr Anderson: Does that need approval or can it be done by the Department?

Mr Evans: As long as the LAGs agree. We do not force it on people. We get the LAGs to agree the process, and the Department then goes through the paper process. We did it at least twice under the old programme.

Mr Anderson: And that can still happen.

Mr Evans: Yes. It happens quite a lot in Scotland. Under previous programmes, money shifted quite a lot between groups.

Mr Anderson: As you touched on in various ways, Gareth, the whole idea is to spend the money in whatever way in which it needs to be allocated.

Colette, what do you mean by what you say about amending? Is that amending projects or amending priorities?

Mrs McMaster: That is the formal amendment. When we have to go to the European Commission, it changes the programme as a whole from the way that it was approved.

Mr Anderson: Who monitors or polices that to see whether you need to make those changes, and at what stage is that done? Does the point at which you need to make that change come at an early stage?

Mrs McMaster: We will monitor the programme as we go through. We will have monitoring and evaluation systems in place. There is also the RDP monitoring committee, which meets regularly and helps monitor the programme. We will do an annual report to the Commission as well.

Mr Anderson: Therefore, if something were flagged up that you might see as an opportunity to say, "Look, we need to step in here and make an amendment", could that be done at an early stage rather than have it dragged out over a lengthy period, which might be time-consuming and have an effect on the programme?

Mrs McMaster: There is a process to work through. I will ask Lorraine to cover that.

Mrs Lynas: It very much depends on how the programme is drafted and the level at which you set the budgets. In the current programme, we have just submitted the final modification that we are allowed to make. That is modification 12. That shows how many times we have modified the current programme.

Mr Anderson: Did you say that that is your final modification?

Mrs Lynas: Yes, that is the final one. We are not allowed to amend it any more. It is all set down in EU regulation. The current programme, for 2007-2013, finishes spending at the end of this year. The EU regulation sets out types of modifications that you can make. The money for LEADER is programmed at the £70 million level. That means that we have the flexibility to move the money within that £70 million without having recourse to the EU. It is really about how you set the money within the financial plan. If it requires you to move money between measures, you are into a full modification, and you have to ask the Commission for permission.

The programme document is over 1,000 pages long. You cannot change one word of it without going back to the Commission and going through a formal process. There are two types of modifications or amendments that we can make. One is a major amendment, which means changing money between focus areas or the co-financing rate. We are allowed only three of those. The Commission has tried to cut back on the number of modifications allowed, but, if we are changing simple things, such as putting a new measure in or taking a measure out, we are allowed one per calendar year. We still need to work through with the Commission what constitutes which type of amendment. That is the process that my unit deals with.

Mr Anderson: Therefore, the programme will be strictly monitored and policed, and, if anything is flagged up, the sooner that it does so, where you see an opportunity or see that we need to do something to get the money shifted —

Mrs Lynas: That is what we have done throughout the current programme. We have done that 12 times. We have taken account of euro gain, put measures in and taken measures out, and we have done that all along in conjunction with the Commission, and with the monitoring committee, because it has a role in that as well. In the current programme, the monitoring committee had to approve the amendments. In the new one, it does not, but it has to give us an opinion on those amendments.

Mr Anderson: You are happy and confident, then, that that can be —

Mrs Lynas: It is a slow process.

Mr Anderson: It is.

Mrs Lynas: It is not easy to do, but you can do it, and that is why we had to set out all our needs in the programme document. We had more needs than we have money for, so we had to be sure that we got all the needs in there so that, when we go to amend it, we can relate it back to the original strategy, which says that we identified genomics as an issue or that we identified land use, because when the land use group reports, we might need to do something there. We have done that. We have proofed it for the future so that we can go into it and then say to the Commission that we raised it as an issue or an emerging need during the seven years.

Mr Anderson: OK. That is up until 2023.

Mrs Lynas: Yes, 2023. You are limited, in that it is set out in the regulation when you can do your final modification. Our last modification had to be in by 30 September. That is it now, so we cannot touch the remaining programme. The last one for the new programme will have to be in by 30 September 2023, for the slightly less big amendments. Bigger amendments will have to be in by, I think, 30 September 2020, so there are different types and different deadlines.

Mr Anderson: Just quickly, Gareth, did I pick up that you said that, in the present or previous programme, you hit 1,000 jobs?

Mr Evans: We do continual monitoring of the projects. On Monday, one of my staff came in and said that we had just passed the 1,000-job mark.

Mr Anderson: Is that full-time equivalent jobs?

Mr Evans: Yes, full-time equivalent jobs.

Mr Anderson: By way of comparison, how do you see that going forward with the new programme? How many jobs do you —

Mr Evans: Going into the new programme, we have set a job target of 700. We were slightly more cautious going into the new programme. The old target was 1,100 jobs, so to get within 100 of that, given the economic climate at the start and in the middle of the programme, is a great achievement. We will certainly be pushing hard to go past the 700 figure.

Mr Anderson: Or 1,000.

Mr Evans: Or 1,000. Absolutely.

Mrs Lynas: I should say that the budget is 30% less. There was £100 million in the current programme but only £70 million in the new one.

Mr Anderson: After all those rural programmes, you are so much more efficient now. We will expect the jobs to be there, will we not?

Mr Swann: I just need a couple of quick yes or no answers, if you can. That will keep me happy.

I want to ask about your technical and business groups. Are existing groups eligible to reconstitute?

Mr McKendry: Yes.

Mr Swann: OK. There is no mid-term review as such, but can the Committee monitor that?

Mrs Lynas: Yes. There are to be two enhanced annual reports, for 2017 and 2019.

Mr Swann: Can the Committee have any input?

Mrs Lynas: It can do. We came here to discuss the mid-term evaluation. It is possible for us to come back at the time of each of those enhanced annual reports.

Mr Swann: Can we get that programmed in, Chair?

Lorraine, you also mentioned a proportionate template for business plans that depends on the size of the programme. Are you still working on those? How many pages are you expecting those to run to?

Mrs Lynas: I am not sure. That would be for the team that is involved in that to say. I do not have that information, but we can get it for you.

Mr Swann: When you say "proportionate" —

Mrs McMaster: It is proportionate to the scale of the grant or the investment being sought.

Mr Swann: I just wanted to know what the actual size is going to be. I was with the north-east LAG, and I remember sifting through some crazy application forms for a couple of hundred pounds. I just wanted to know how proportionate "proportionate" is.

I also want to ask about collaborative international projects. Is it correct to say that they all must have a connection with the Republic of Ireland?

Mr Evans: No, it is not. Is that through LEADER?

Mr Swann: Yes.

Mr Evans: No. We have an all-Ireland fund, which will be targeted at cooperation, but, over and above that and even as part of it, the partners can be elsewhere in the UK or Europe. For instance, we hope to have a cooperation event in January, to which we will be inviting England, Ireland, Scotland, Wales and some European counterparts to take part in that.

Mr Swann: It is OK, then, for a Northern Ireland group to work with Finland without Republic of Ireland involvement.

Mr Evans: Yes.

The Chairperson (Mr Irwin): I see that there is £58·93 million for agrienvironment legacy agreements. That is for agreements in the past that have still to be —

Mrs Lynas: Yes. There are agreements from as far back as the 2000-06 programme. The carry-over is a lot less than it was from 2000-06 into this programme, because we were at over £200 million then. It is a good bit less.

The Chairperson (Mr Irwin): I want to ask you about the environmental farming scheme. Is that the same scheme by a different name or not?

Mrs McMaster: That scheme is a new scheme.

The Chairperson (Mr Irwin): To replace —

Mrs McMaster: The agrienvironment scheme.

The Chairperson (Mr Irwin): OK. Will there be a gap between one commencing and the other ending?

Mrs McMaster: Brian Ervine can talk to you about that if you have a particular question that you would like us to answer.

Mr Brian Ervine (Department of Agriculture and Rural Development): The current legacy schemes are agreements for various lengths of time, and there are probably nearly 10,000 farmers in the schemes this year. That will drop off to about 6,000 next year, and there will be a big drop-off in the following year. The scheme will open next year. There will not be 10,000 farmers in the new scheme immediately. There is a carry-over. The sequencing of that drop-off between the new scheme opening and people coming in will mean that, yes, there will be a gap for a while in some places. Some people will finish their scheme before —

The Chairperson (Mr Irwin): The other scheme opens.

Mr Ervine: Yes, but not just that. There is a lead-in time. The scheme opens next year, but, by the time an agreement is put in place and so on, there will have been a lag time.

The Chairperson (Mr Irwin): OK. There is £65 million for areas of natural constraint. Am I picking it up right that that is expected to be spent in the first three years?

Mrs Lynas: That is correct. It is not programmed beyond 2017.

The Chairperson (Mr Irwin): OK. That will be spent in the first three years.

Thank you very much for your presentation. I am sure that there are still some questions, but we would be here all night.