Brendan Smith, minister for agriculture, fisheries and food, announced that the grants would be paid in three stages over the next three years.

The grants are being provided to ensure farmers have the appropriate storage facilities in place to meet the higher standards outlined in the EU’s environmental Nitrates Directive.

Mr Smith said that the country would face “very serious consequences” if it failed to meet the requirements of the directive.

He said that action could include: “The prospect of substantial daily fines as well as the potential threat to EU funding for rural development schemes and the Single Farm Payment, worth Euro 1.6bn annually to Irish farmers.”

Mr Smith added that the scheme was designed to “to meet the national deficit in such facilities and to take the action necessary to resolve the ongoing difficulties with the Nitrates’ Directive”.

Some 80% of the grants will be paid throughout 2009 and 2010, with half due this year and the remaining half next year.

The final 20% will be paid out in January 2011.

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