It's all gone ominously quiet on the Irish film-making front. Only one film has had a commercial release so far this year, compared with 12 last year. So how much difference will new Film Board initiatives to encourage low-budget films make? asks Hugh Linehan

The Galway Film Fleadh is traditionally the prime showcase for Irish premières of locally produced feature films. But the Fleadh's Irish programme this year looked painfully sparse. Some films (Bloody Sunday, As the Beast Sleeps) had already been screened on television. Others (How Harry Became a Tree, Puckoon) had been on the festival circuit since last year. Only two, relatively small-scale films, Chaos and Virgin Cowboys, could reasonably claim to be carrying the torch for new Irish cinema. The paucity of new Irish titles was even more striking when you consider that, because of its internal difficulties, there was no Dublin Film Festival in 2002, and that the DFF usually premières a number of Irish features in the spring.

When it comes to films reaching the general public, the picture is also bleak. So far this year, only one Irish film, Johnny Gogan's Mapmaker, has received a commercial release. This compares with around 12 releases over the course of 2001, including such commercial successes as About Adam and When Brendan Met Trudy. Doom-laden prophecies about the demise of the Irish film industry are a naturally recurring phenomenon, and positive thinkers will describe last year's figures as a one-off high, while pointing to films currently in post-production such as Jim Sheridan's East of Harlem and Conor McPherson's The Actors.

But there's no doubt that we're now seeing (or rather not seeing) the consequences of a significant downturn in indigenous Irish film-making over the past 18 months.

Not surprisingly, the Irish Film Board is not too keen on words such as "crisis" and "slump" being bandied about. Rod Stoneman, the board's chief executive, points out that East of Harlem is due for release before the end of the year, and How Harry Became a Tree opens next week. Stoneman also believes that production this year is holding up. "We're six months through the year, and we've had four [films in production]," he says. "I'd be confident another four to six will be made throughout the rest of the year."

However, it's clear that some chill winds are blowing for film production in Ireland, not least because of changes in the international production scene. The closure last week of FilmFour, the feature film production and exhibition arm of Channel 4, is a further blow to Irish film-makers - the company had backed the most recent films by Conor McPherson and East is East director Damien O'Donnell.

RTÉ's current financial difficulties don't help either. In a submission to the Government's Forum on Broadcasting, the Irish Film Board stated: "The problems of putting together complex foreign co-productions without a national broadcaster to back them has led to much frustration and many good projects being blocked".

It may be, though, that these "complex foreign co-productions" are becoming a thing of the past - at least at the level we've been used to. The typical Irish feature film of recent times had a budget of €3-€5 million, with a mix of financing from the Film Board, Section 481 tax incentives, and British or European investors (often broadcasters). Increasingly, those investors are looking for larger-budget, more overtly commercial films, with (expensive) star names attached. As it happens, it's exactly this strategy which landed FilmFour in so much trouble, but the trend seems inexorable. A small number of Irish companies are geared to produce these bigger films, but the new environment makes it more difficult for newer talent to emerge.

Hence the Film Board's announcement last week of two new initiatives for low-budget production.

The new proposals mark a clear break with previous policy, in that they envisage for the first time a significant number of films being made here without any foreign investment. "The landscape for feature-film production has changed dramatically in recent years," says Stoneman. "There has been a polarisation in the market place with €10million and higher-budget films at one end of the spectrum and low-budget films at the other. The mid-range of €3 million to $5 million film has become very difficult to finance and therefore we have decided to initiate a new approach to encourage low-budget feature filmmaking".

So is this a specific reaction to the current difficult conditions? "It's a combination of that and of an analysis of the stage of development of what's happening here," says Stoneman.

"This is the correct response. The market's changed, there's a gap in the marketplace and we need to boost low-budget production. The larger-budget companies are now quite well cared-for."

One wonders whether we should really mourn the passing of the middle-budget film, which too often tended to be middlebrow, middle-aged and middle-of-the-road as well.

There was something about a lot of the films produced in this way over the last several years which seemed muted and disappointing. Comparisons may be invidious, but they're unavoidable: Irish cinema of the 1990s and noughties has failed to produce a Pedro Almodóvar, a Wong Kar-Wai, a Paul Thomas Anderson or an Abbas Kiarostami.

Certainly, some competent, entertaining and quite intelligent films have been made, but nothing - since Neil Jordan's Michael Collins - that grabbed the attention of the nation or provoked passionate debate. Nor have these films punched above their weight in the international marketplace as the early work of Jordan and Jim Sheridan did. And it seems odd that no film-maker has managed to dramatise the cynicism, corruption and greed of recent Irish history.

"Maybe at this point that's just not the phase we've been going through," responds Stoneman. "Also, with a few honourable exceptions, European cinema in general has been less adventurous and innovative over the last while."

One might also point to the blanding-out effect of the international co-production process, leading to the grim "Europudding" with its conservative narrative structure and plodding visual grammar. This is all the more reason to welcome a proposal which, in theory at least, offers the opportunity to bypass the endless development process associated with co-productions. It will be interesting to see the fruits of the new initiatives. The Film Board envisages financing up to 15 feature films on the new, low-budget model over the next three years. One film, Liz Gill's contemporary urban comedy, Goldfish Memory, currently in post-production, offers an example of the kind of project that will be supported.

The Low Budget Feature initiative will work as follows: the budget level must be no more than €1 million, with producers providing at least 40 per cent and the Board proposing to provide up to 60 per cent. The Film Board will recognise cast and crew deferrals and facilities deals, which include deferrals as part of matching finance.

In practice, the new proposals will see cast and crew members, along with equipment and facility providers, deferring up to 50 per cent of their salaries and fees during production, with these deferrals being recouped through sales of the finished film. Discussions have already taken place between the IFB and the main film technicians' union, SIPTU, on how such a recoupment process might work.

"They have responded with a broad degree of support," says Stoneman. "I think what they like is that it's a way of generating new production without the chaos." The whole process of deferrals may not be as straightforward as it seems, though. The often tortuous way in which films are sold and profits are made means that recouping can be a far from simple business. There have been several

examples of deferral agreements in the past, but I have yet to meet a performer or technician who ever saw a single cent from them.

This could cause problems for a State agency such as the Film Board if disputes arise.

Stoneman carefully insists that the Board will "monitor, but not guarantee, recoupment". The danger is that the kind of disputes which often arise in low-budget circumstances will end up laid at the Board's door.

Films in the pipeline for production this year under the new scheme include The Halo Effect by Lance Daly, Dead Bodies, to be directed by Robert Quinn, and John Simpson's Straight to Video. Commercial partners in the initiative include Xtravision, which has committed to video and DVD rights on a number of titles, RTÉ on Goldfish Memory and TV3 on The Halo Effect.

In a separate initiative, the Board will also be backing "micro-budget" projects of a more experimental nature, offering loans of between €25,000 and €100,000 for innovative work shot on digital formats. The microbudget work can be very personal, even wacky stuff," says Stoneman. "We are looking for creative bravery and indeed we expect and desire the unexpected."

Since the 1980s, "low-budget" has become a mantra, a badge of integrity, whether in the spartan strictures of the Danish Dogme movement, or on the funkier margins of American independent cinema.

In theory, digital technology offers increased opportunities for film-makers to bypass the prohibitive expenses of 35 millimetre film production; in practice, the attraction of the new scheme for the Film Board must be that it allows it to point to a new stream of feature film production over the next few years (an important political consideration for a body which has expanded its own staff and budget significantly over the past 12 months). Most importantly, it offers the framework for a new kind of film-making practice in Ireland, one less dependent on international financiers, and more likely to permit risk-taking and creative innovation.

At least that's the theory.