Archive for the ‘Press’ Category

Mediation cuts dispute resolution costs, says Chief Justice

Thursday, September 16th, 2010

Irish Times, September 16 2010

CAROL COULTER Legal Affairs Editor

LEGAL AID BOARD CONFERENCE: THE GOVERNMENT should foster and promote a professional mediation service and alter the perception of the courts as the first and only resort for dispute resolution, the Chief Justice has said.

Mr Justice John Murray told the 30th anniversary conference of the Legal Aid Board that this would not require major expenditure, and would reduce the overall cost of dispute resolution.

He said it was particularly appropriate in family law given that litigation can exacerbate the existing difficulties arising from a breakdown in family relationships.

“Given the State’s recognition of the family as a social unit of fundamental importance in society, it is essential that it ensures that there are systems and resources in place to address and resolve the serious issues to which family breakdowns so often give rise,” he said. “Mediation in particular is a vital tool in addressing family disputes, particularly where the welfare and future of children is at stake.”

He pointed to UK research showing the cost in legal aid fees of mediating family disputes was half that of litigating them. Given the pressure on Legal Aid Board and court resources, the need to encourage and invest in use of alternative dispute resolution (ADR) as a primary option for citizens where it can be effective has never been more pressing, he said.

Yet mediation and other forms of ADR remain on the margins of family law and civil law generally, and this would continue unless the State began to foster a culture of ADR with vigour and purpose.

President McAleese also urged greater use of ADR to resolve legal issues in a more humane way.

Legal Aid Board chairwoman Anne Colley said the cost associated with providing legal aid could be more than offset by its prevention of further problems that imposed a heavier cost on society.

She pointed to research in other jurisdictions which showed the business case for legal aid. Research here and in other jurisdictions showed those with legal problems often reported adverse consequences including ill-health, stress-related problems, loss of income or employment, violence or damage to property, breakdown of relationships, or loss of one’s home.

Ministry of Justice economists in the UK estimated that, over a three-and-a-half-year period, unresolved law-related problems cost individuals and the public purse £13 billion (€15.6 billion).

Other UK research showed savings could range from £2.34 in the area of housing for every £1 spent on legal aid to £8.80 in the area of benefits.

“It is clear that failure to resolve the more serious problems in a speedy and equitable manner creates considerable adverse consequences both for the individuals involved, their families, their working and social lives and ultimately the State,” Ms Colley said.

In the future, she said, there would be a move in appropriate cases away from the adversarial court environment towards ADR.

Top famers have necessary skills to succeed in other businesses

Saturday, June 26th, 2010

Irish Examiner

By Joe Dermody

Saturday, June 26, 2010

SUCCESSFUL farmers have all the managerial skills they need to thrive in the non-farming business world, says one leading agri-business advisor.

Richard Rea, MD of Tipperary-based Rea Group, said that those who succeed at farming have the work ethic, realism, innovative ideas and adaptability needed to succeed in most avenues of business.

He says farmers are the most likely source of Ireland’s badly needed next generation of entrepreneurs — people who can create and sustain employment without having to depend on the state, foreign direct investment or double-talking bankers.

“Ireland needs more people like Liam Griffin (hotelier) and Sean Quinn (insurer), people who are not afraid to take a risk and make a mistake,” said Richard Rea.

“Larry Goodman never went to college. He started out skinning carcasses when he was 16. The people who create jobs are most mostly people who’ve been to the university of life.

“A lot of those economic commentators, the Dublin 4 brigade, wouldn’t know how to create a job to save their own life. People like me are getting fed up of the Dublin 4 set devoting all their time to analysing the past and where it all went wrong, but serving up no clues as to where our future lies and no answers to the credit shortages in the agricultural sector.”

Offering strategic advice to farmers since 1975, the Rea Group re-launched this week to promote its expanded range of agri-business advisory services.

Its website, www.reagroup.ie, features clients who certainly give substance to Richard Rea’s claims for rural ingenuity. The seven testimonials all feature former farmers who now collectively employ more than 200 people.

A few years back Tom and Pat Hennessy launched Manor Stone, a successful stone and garden business built out of a quarry they found on their farm in Co Laois. They now employ over 40 people.

Angus Wilson was a young, ambitious man when he took over the family’s six-acre farm in Armagh in the 1980s. Angus wanted an extra revenue stream. He tried goats, but his second idea fared better. His specialist premium potato business, Wilson’s Country, now employs 100 people.

“I believe that Ireland has become overly dependent on big foreign companies,” said Richard Rea.

“Foreign investment is important, but it won’t solve the job shortages Ireland is now facing. More than 60% of the businesses in Ireland are small indigenous companies.

“People who become unemployed, or whose farms are struggling, should not be asking ‘how can I get a job?’ They should be asking ‘how can I use my skills to create a business?’ We can help people through the development stage, and they can get 75% LEADER funding for the feasibility study.”

So what characteristics do those farmers who succeed in business have in common?

Richard Rea says: “Most of the farmers we have seen succeed in business were ambitious people. They had gone as far as they could with farming, they were bored and they wanted a challenge.

“They had management ability and a strong work ethic.

“They made their move as much for a sense of achievement as for the extra income. After all, a new business can take six to seven years to make any money, what with paying back bank loans and the interest.

“Anyone who has been successful as a farmer can be successful in business. Anyone who has not succeeded as a farmer would probably be better off as an employee.”

This story appeared in the printed version of the Irish Examiner Saturday, June 26, 2010

REPS gives back more than it costs to run

Saturday, August 1st, 2009

Irish Farmers Journal

By Richard J Rea, David Walsh and Michael Ryan

The Agricultural Consultants Association (ACA) recently conducted a study on the economic benefit of REPS to the local economy and found that the scheme contributes more to the National Exchequer than it costs to run.

In this article, we will examine the immediate net cost to the Exchequer of maintaining the REPS programme.

Money paid through the Rural Environment Protection Scheme (REPS) has gone initially to the farmers involved, and ultimately to their suppliers and contractors, as well as to various retailers, Co-ops and shops in rural communities.

REPS payments in 2009 were budgeted to amount to some €330m. Even allowing for the 70% of expenditure on average, which farmers have to incur in order to meet the requirements of REPS participation, this represents a very considerable income supplement to the farmers involved who are mainly low income cattle and sheep producers.

However, the main beneficiaries of the REPS programme are not farmers, but the suppliers and contractors mentioned above.

Benefits of REPS

In the following paragraphs, we will attempt to quantify the benefits of REPS, as it currently operates, to secondary recipients and to the national Exchequer.

If we assume that of the €330m REPS payments, 30% or €99m, ends up as payment for the farmers time and labour then the remaining €231m is spent on inputs and services necessitated by REPS compliance.

This expenditure is predominantly on inputs which are subject to VAT. We can reasonably assume that half of this spending is on service provision such as contractors, builders or planners, which attracts a VAT rate of 13.5% and the remainder is on tangible inputs taxed at 21.5%. The total VAT take in this situation amounts to €34.4m (See figure 1).

The net figure spent on inputs after VAT is removed is therefore €196.6m.

This is the amount that is available to the providers of goods and services to cover wages, materials, overheads and profit.

We have conservatively assumed that 33.3% of net receipts by input providers goes towards wages and salaries, that a further 56.7% goes as cost of sales, i.e. the purchase of materials and overheads and the balance of 10% is retained as profit (Figure 2).

Calculate value

In order to calculate the value of this spending to the Exchequer in terms of taxes on income, we have made the assumption that the average employee in these businesses earns €25,000 per annum. We have also assumed that half of the businesses are incorporated and therefore pay corporation tax at 12.5%.

We assume the remainder to be sole traders who pay tax at 25%. Finally, we assume that 400 REPS planners earn on average €35,000 per annum. The figures for PAYE/PRSI in Figure 3 include the employers’ PRSI contribution. In the case, of farmer tax arising from the €99m accruing to farmers own labour input, we assume again that income tax, PRSI and levies will be paid at an average tax rate of 25%.

Employment

We now turn our attention to employment directly attributable to REPS. We have assumed average earnings of €25,000 per employee and earnings of €35,000 per REPS planner. Given a total wages bill of €67.2m, this suggests a total of 2,460 workers whose livelihood is directly attributable to REPS.

These figures are probably conservative. Closing down REPS would result in even higher job losses when the knock-on effect of the first round of job losses is taken into account.

This latter point is re-inforced by data from the recent Quarterly Economic Commentary issued by the ESRI (Summer 2009), which forecasts an 8.9% decline in GNP for this year.

Unemployment is forecast to increase by 6.3% over the same period.

Extrapolating from this data, using current GNP and unemployment statistics, while an inexact science, would suggest that removing €330m in incomes from the economy (c. 0.2% of GNP) would lead to an increase of approximately 3,100 in the level of unemployment nationally.

This figure corresponds closely with figures for job losses arrived at using the more direct measurement outlined above.

Multiplier

It is important to point out that because a large proportion of REPS expenditure goes to relatively low income households, it is likely to have a relatively large multiplier effect in the immediate economy.

In other words, as pointed out above, farmers are likely to spend a considerable portion of REPS receipts on associated activities such as maintenance, fencing, building and contracted activities. This type of spending will typically have a low import content when compared with spending by other businesses. It will therefore have a positive impact on the Irish balance of payments

Additionally, because low income households are less likely to save and more likely to spend on basic consumer items, the portion of REPS payments retained by farmers is also likely to be spent in the immediate locality as part of normal household expenditure. This further re-inforces the multiplier impact.

Using the lower figure (2460) for unemployment resulting from REPS closure, we can begin to calculate a figure for jobs seekers allowance.

To do this, we assume that half the applicants are married, with an average of two children, while the remainder are single.

Given current rates, this will result in average payment of €15,600 per annum or a total of €38.4m.

The complete closure of REPS would result in perhaps 15% of existing REPS participants qualifying for Farm Assist.

An average rate of €10,600 per farmer is assumed based on half the recipients being married with two children with the remainder being single. The resulting total is €98.6m in additional Farm Assist payments.

Immediate loss

The figures in Figure 4 quantify the immediate loss to the Exchequer of higher unemployment and reduced farm incomes.

To these should be added the less easily quantified second and subsequent losses of incomes and tax revenue resulting from reduced levels of spending by these two groups. We have ignored supplementary social welfare costs, such as increased medical card entitlement, higher spending on rent allowances and on similar schemes.

Current REPS funding is comprised of three elements – EU contribution, co-funding and additional State funding. The latter two elements come from the Irish Exchequer and amount to just over 55% of the total.

Therefore, approximately €181m of this year’s budgeted spending on REPS comes from the Irish Government. This cost to the Exchequer is considerably less than the €214.9m lost from revenue foregone, and the additional social welfare payments incurred (Figure 4).

In the presence of EU co-funding, REPS actually contributes more to the National Exchequer than it costs.

Even this is not the complete picture because we have made no attempt to put a money value on the environmental benefits of REPS to society and the economy in general. This aspect of REPS will be covered in a subsequent article.

*David Walsh and Richard J Rea are Agricultural Consultants.

**Michael Ryan is a lecturer in Economics at the Limerick Institute of Technology.

Money paid through the Rural Environment Protection Scheme (REPS)  has gone initially to the farmers involved, and ultimately to their  suppliers and contractors, as well as to various retailers, Co-ops and  shops in rural communities.

Irish Farmers Journal: Bypassing a farmer

Tuesday, May 27th, 2003

Irish Farmers Journal

By Mairead Lavery

It’s almost two years since we reported on young dairy farmer Donal Norris from Fiddown in Co. Kilkenny. At the time, the Piltown/Fiddown bypass was under construction and Donal was having difficulties with Kilkenny County Council over access to land, drainage and safety features of the new road. He was worried about the safety of his children and feared the new road would make his farm unworkable. Unfortunately his fears have come true.

Agreement ‘being ignored’

Last December the IFA agreed a new compensation package for landowners affected by Compulsory Purchase Orders for road-building schemes under the National Development Plan. Compensation for land is to be based on equivalent values for a similar piece of land in the same area. In addition, a per acre good-will payment will be available to landowners who co-operate fully with new road plans. Time frames for different notices, responses and payments were also agreed.

A letter from Michael Egan of the NRA dated January 7, 2001 says that all agricultural land under Compulsory Purchase Order (CPO) where compensation had not been determined by December 10, 2001, comes under the new IFA deal. The letter, which was circulated to county and city managers, adds that the deal also applies to landowners who are considering offers of compensation as well as landowners whose cases have been referred to arbitration.

This position was confirmed by Minister for the Environment, Noel Dempsey, in a written reply to Dail questions on the on the April 17, 2001.In it he said the NRA and local authorities would seek to facilitate landowners who chose to rely on the agreement.

However, Kilkenny County Council does not appear to be following this line. At a meeting of the council in late March, Donal Norris’s decision to withdraw from arbitration and seek compensation under the new agreement was greeted with scorn. The following comments of County Manager PJ Donnelly were reported in the Kilkenny People on March 29: ‘‘Now there is a request to go back to the IFA loop, and if this does not satisfy Mr Norris, as five previous agreements did not satisfy him, will we go back to arbitration again. It’s time they all saw sense and let this matter go for arbitration.’’

The IFA has confirmed that Donal Norris is entitled to come in under the new deal. However, Donal Norris maintains that as late as May 9 the council was insisting that he is not entitled to the terms of the new deal and must remain in arbitration.

On the 19th of March this year Donal Norris started to drive his 44 dairy cows on the new Fidown/Piltown bypass. He had to do it as they were out of grass on the 19 acres surrounding the yard. ‘‘I had no choice.

The cows were hungry and needed fresh grass. Most of our land is now on the other side of the new road. Before the bypass was built, getting to that grass was a simple matter of driving the cows less than a quarter of a mile along a small local road. Now the distance is 1.2 miles — across a very fast and busy road,’’ said Donal.

He had the same difficulty last October when the local road used by his family for generations to access the rest of the farm was first closed. Donal was not allowed to drive his cows through the narrow tunnel provided for cars. Furthermore, council officials told him that if he did use it, he would be fined €1,000 per day.

On the intervention of Michael Egan of the NRA, he was given temporary permission to use the tunnel. This was to apply until the council completed internal roadways through adjoining land to reach the rest of the farm. In early November a cow seriously injured herself in the tunnel and had to be put down. On veterinary advice, Donal stopped using it. Seven months later there’s still no sign of the internal roadways.

Last week 200 neighbours and friends staged a peaceful protest in support of Donal and his family. About 50 vehicles, including lorries and tractors, were driven slowly along the hard shoulders without causing disruption to traffic.

Donal has now decided to dry off 25 per cent of his dairy herd. ‘‘The strain is just too much. It takes 14 of my neighbours to herd the animals twice a day. I can’t keep asking them to do this. They have been so good to us, and I want to thank them for all their help and support. If the internal roadways are not put in within two weeks, I have no choice but to dry off another 25 per cent of the herd,’’ he said.

‘‘I feel singled out by the council. They just seem to want to get their way. I want to know who the real decision maker is because all I want is equal treatment,’’ he said.

Council statements criticised

Richard Rea of Martin and Rea Consultants in Agriculture and Business says statements about the Donal Norris case made at a recent meeting of Kilkenny County Council are not acceptable.

‘‘I want to reject two points made by the county council. The council claims that five agreements it put forward were turned down by Donal Norris.There were no agreements brokered with Mr Norris, and to claim anything other than this is totally wrong and not in accordance with the facts. I wrote to Kilkenny County Council on the 28th of March requesting details of these supposed agreements and the dates when Donal Norris rejected them. To date the council has not been able to back up its claims,’’ said Richard Rea.

He also rejects the council’s criticism about the way it is being portrayed since Donal Norris started to drive his cows on the bypass.

‘‘The truth hurts. It is a matter of fact that the cows were on the road. Donal Norris had no other choice. Kilkenny County Council has provided roadways of adequate width and length for other affected landowners. In fact, on the farm that Donal Norris has leased, the roadway provided is perfectly adequate. However, on the Norris home farm this is not the case. For some extraordinary reason, the roadway proposed here is both inadequate in length and width,’’ said Richard.

He said this was a critical matter for Donal Norris because the public roadway used by his family for generations is now closed off, and he must have an adequate alternative to reach the rest of his farm.

‘‘All Donal Norris wants is equal treatment. He wants the same as was given to other landowners. Because this was not done, he was left with no choice but to drive his cows on the new road or else cease to be a dairy farmer.’’

On November 8, 2001, a compromise solution was put forward.

This solution proposed that the County Council should provide the roadway and, if the arbitrator decided it was more than Donal Norris was entitled to, this would be taken into account in his final assessment for compensation. The council and the NRA rejected this proposal last week.

Irish Farmers Journal: The employee of the future

Saturday, August 18th, 2001

Irish Farmers Journal

By Thomas Hubert

Peter Byrne, manager of Farm Relief Services, thinks that farm workers will have to be specialists with adequate training in the coming years.

With farms getting always bigger, farmers will be less numerous but more likely to hire employees. “The number of units of labour in agriculture will drop, but the proportion of employees and contractors will rise,” he says.

However, we are no longer talking about manual, unqualified workers. He thinks the typical farm employee in a couple of years will be someone with farming qualification – for example, a part-time farmer or someone who had to sell a small farm – and specific additional skills.

These skills will be acquired and certificated through training programmes such as those offered by FRS and certified by the National Council for Vocational Awards. “Health and safety are going to be big issues,” says Mr Byrne. There are too many accidents on Irish farms and farmers will no longer hire an employee unless they are sure he or she can perform the task safely,” he says.

The trend is towards specialists owning their own equipment and contracting with farmers for a specific job. “There is little point in a farmer owning the machinery and tractors if he is dependent on hiring in drivers – it will be more attractive to contract the job to a person with the equipment and the expertise to carry out the task,” says Mr Byrne.

However, there will also be opportunities on the management side. Owners will be looking for people who can run the farm as an enterprise, possibly on the basis of a profit-sharing arrangement.

Mr Byrne’s outlook for the future of farm employment is “very positive”. “It is attractive and will be more attractive in the future,” he says. Jobs will become more interesting and farmers tend to treat the labour force better and better. “It is so much better than standing at a production line in a factory!” he says.

Richard Rea, agricultural consultant, says his future employees will need to be “50 per cent farming, 50 per cent business and a bit of law”.

Their ideal qualification would be an agricultural degree with two years of experience. People who have already worked for a couple of years in the public sector have the level of confidence and the knowledge of the law, the banking system, etc. that are necessary to begin a career in agricultural consulting, he says.

According to Mr Rea, a lot of jobs will involve compensations assessment for road works and environmental impact studies over the next years. But the most interesting job will be helping farmers to set up on-farm part-time businesses.

“There are two categories of part-time farmers,” says Mr Rea, “those whose farm income is too low, and those who are very successful and want more challenging experiences”. He believes the latter will have more and more money to invest in businesses such as hotels or catering facilities and will need advice from consultants to do so.

Mr Rea thinks most of the opportunities will be located in the West. “Farmers there are already accustomed to off-farm jobs, they are more adventurous,” he says. On the contrary, he thinks farmers in the South and East often see off-farm activity as a failure and are not so keen on new developments.

His prospect for the consulting sector is stability. When he started working in 1974, there were 7 consultants employing less than 20 people nationwide. There are now 80 consultants and 250 to 300 people in this business, plus competition from Teagasc, which is “heavily subsidised”. He thus does not expect his trade to grow as fast as it did over the last 25 years.

Dr Noel Cawley, chief executive of the Irish Dairy Board, puts a lot of confidence in third-level education.

According to him, any graduate, whatever the course, can start a career in agri-business. “You can do anything after that, it is a complete training in itself,” says Dr Cawley.

He remarks that as people retire earlier, the face of employment in his sector changes quickly. As a result, young graduates are more and more likely to access challenging jobs, even top management positions. “There are opportunities everywhere,” he says.

More specifically, Dr Cawley encourages people interested in a career in agri-business to study basic sciences such as maths and physics. “There will be a significant shortage of people with science degrees,” he says.

His piece of advice to students: “Get as much training as possible in college; if possible, get a post-primary degree.”