Jerry Buttimer (Fine Gael)
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I welcome the Minister of State, Deputy Rabbitte, to the House and thank her for being here.

Seán Kyne (Fine Gael)
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I welcome the Minister of State and thank the Cathaoirleach for selecting this Commencement debate on the agri-climate rural environment scheme, ACRES.

As the Minister of State will be fully aware, ACRES provides a very important injection of money for Irish farmers. It is a €1.5 billion flagship agri-environment scheme and a successor to a number of previous schemes, including REPS, GLAS and AEOS, which have been hugely successful in promoting good environmental practice among farmers. The uptake of all these schemes has been high, and ACRES is no exception. On that basis, I compliment the Minister, Deputy McConalogue, and the Government on ensuring the scheme got up and running and so many farmers have been accepted into it. I have no doubt that the results of the scheme, on its conclusion, will show it has been successful in enhancing the environment on farms and in waterways across rural Ireland and increasing habitat protection.

The one thing worse than not giving something to somebody is giving them something and taking it back. Unfortunately, advance payments were made earlier this year and in some cases farmers have had to pay back €2,000 or €3,000 of the €5,000 originally paid. That has left a bad taste in their mouths regarding the scheme. It is an administrative issue as there has been an administrative failure in relation to the scheme. Not only were cheques issued and letters sent stating that some of the money could be withdrawn but it took a long time for letters to be sent explaining why farmers had to repay money. There was some confusion.

I have dealt with one particular case - thankfully, the outcome was successful - where a farmer had the €5,000 lodged in the bank and then had their pension reviewed. A simple analysis of profit and loss based on the payment resulted in their pension being reduced by nearly €50. Subsequently, the farmer received a letter requiring that they pay back all but €1,300 of the €5,000, which meant €3,700 had to be repaid. Thankfully, their pension was restored but that was the consequence. Administratively, there have been issues with this scheme.

As I said, I compliment the Government on securing the funding, initiating the scheme, engaging with the European Commission, and having the foresight to note delays in the scheme and make advance payments. Unfortunately, the calculation of the advance payments has been way off and has resulted in farmers having to repay money. An overpayment was made to 6,975 recipients of interim payments. I would call it a miscalculation rather than an overpayment. They received advance money and when the scoring, which took time, was done they were deemed to have been overpaid. Figures show that some 62% of recipients had to repay between €100 and €2,000 and 28% had to pay back between €2,000 and €4,000.That is a significant portion of the money they received in advance. Why was it that so much had to be repaid? Why was there such a miscalculation?

Anne Rabbitte (Galway East, Fianna Fail)
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I will start by apologising for being late to the House.

Jerry Buttimer (Fine Gael)
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There is no need, Minister.

Anne Rabbitte (Galway East, Fianna Fail)
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I thank Senator Kyne for his opening contribution. I am taking this Commencement matter on behalf of the Minister, Deputy McConalogue, who wishes to thank the Senator for raising this important issue. It gives me an opportunity to update our colleagues in Seanad Éireann on the agri-climate rural environment scheme, known locally as ACRES.

As the Senator correctly said, ACRES is the flagship agri-environment scheme provided under Ireland’s CAP Strategic Plan 2023-2027, with an increased environmental ambition, as required under the new Common Agricultural Policy. There are a number of new and innovative elements, such as the scaling up of results-based actions from the locally led approach under the European Innovation Partnerships to a national results-based scheme. There was significant interest from farmers in the scheme, and the Minister, Deputy McConalogue, responded to that interest by ensuring that all valid applications were accepted. The result is that we now have just under 55,000 active participants in the scheme.

The ambitious and complex nature of ACRES, with the availability of two approaches and the incorporation of results-based payments, has created opportunities for farmers to greatly improve environmental outcomes. It has also created challenges in the first year of implementation of the scheme. The Minister has endeavoured to address those challenges as they arose. While advance payments had issued to almost 20,000 participants by mid-February 2024, when it became evident that there would be delays in making further payments, the Minister arranged for the issue of interim payments to all those affected. The objective behind this unprecedented move by the Minister was to alleviate financial difficulties being experienced at all times. The outcome of this was that by the middle of March of this year, virtually all ACRES tranche 1 participants had received an advance payment or flat-rate interim payment of either €4,000 or €5,000. These interim payments represented the majority of, or in some cases exceeded, the total ACRES payments due for the year.

Participants were also advised that if their final overall ACRES payment in respect of 2024 was calculated to be greater than the value of the interim payment, the balance would issue to them. They were also advised that if the value of the interim payment was higher than the final ACRES payment, the overpayment would be recouped by the Department. Balancing payments commenced in mid-June and to date, 40,973 participants have had their claims fully processed for the 2023 scheme year, with the processing of payments for the remaining contracts continuing.

In terms of overpayments or what the Senator rightly called miscalculating, the current position is that 8,673 participants are in an overpayment situation. This represents 40% of all of those participants who received an interim payment and whose balancing payments have been fully processed. Letters have issued to those in an overpayment situation. The Minister has ensured, in the interests of providing as much flexibility as possible, that a range of options is available to the affected participants to facilitate making the repayment in a way that best suits them, including deferring their next ACRES payment.

Seán Kyne (Fine Gael)
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I thank the Minister of State. That is an increase now, in fact, in the numbers that are required to repay. The number of those in an overpayment situation is now up to 8,673. There would obviously be a number of those in Galway within significant areas of commonage, special areas of conservation, SACs, and natural heritage areas, NHAs. Therefore, we would have been under the co-operation programme. It has left a bad taste in the mouth alongside what is a very good news story in terms of the injection of cash.

There were delays first. The Minister meant well in providing advance payments, which I know were welcome at the time, but people then had to repay money without back-up information as to why. They did not have the scoring. They received a cheque, and then they were told they had been overpaid and received letters to say this is why. An administrative issue has caused problems. I certainly hope we can get to the bottom of it and get this situation sorted, and that every flexibility is provided to farmers to repay the moneys that were provided by the Department based on its miscalculation.

Anne Rabbitte (Galway East, Fianna Fail)
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I thank the Senator for providing the opportunity to discuss this important topic. I reiterate the environmental ambition of ACRES, with Ireland leading the way among other member states in rolling out a national results-based scheme. The first year of such ambitious schemes brings with it complexities and challenges. The Government regrets delays that have been experienced by many participants in receiving their payments. As I outlined, however, the Minister has put a measure in place for those challenges for the second year.

I take on board exactly what the Senator is saying. As much flexibility as possible is needed. We must understand that, at the end of the day, farming is a challenging career and flexibility with repayment is important. This level of ambition also brings significant long-term opportunities. For example, there is an opportunity for ACRES co-operation programme, CP, participants to increase their level of payment over the course of the scheme through the deployment of non-productive investment and landscape actions. The Minister encourages participants in the ACRES co-operation programme to engage with their ACRES advisers to explore opportunities to increase the environmental status of their lands, raise their scores and in turn potentially increase their core ACRES payment. Over 91% of tranche 1 participants have now had their first year payment fully processed.