I am fully conscious of the need to simplify the application and processing arrangements for the various direct payment schemes and to ensure penalties are kept to a minimum both from a customer service viewpoint and the importance of direct payments to farm incomes. In the course of the negotiations on the detailed rules for implementing the Agenda 2000 changes and in the discussions on changes to the integrated administration and control regulations, Department of Agriculture, Food and Rural Development officials raised the question of simplification and proportionality of penalties. Some success was achieved in that regard.
I am committed, under the new Programme for Prosperity and Fairness, to pressing the European Commission to re-examine the penalty regime with particular reference to exclusion penalties applicable to direct payment schemes, and to apply the maximum proportionality in the imposition of all penalties.
The number of livestock applications which attracted penalties under the 1998 headage and premium schemes represented 2.6% of the 522,000 applications received in that year. In the case of REPS, 2% to 3% of applicants would have attracted penalties of 20% of aid. Therefore, this issue has to be kept in proportion and in context.
For example, two thirds of penalties applied under the headage and premium schemes were attributable to late submissions, that is, late applications by farmers. A further number arose because of a shortfall in the number of eligible animals found by my Department in the course of on-farm inspections. The number of applications which attracted a one or two year penalty, that is, false declaration, intentionally or through serious negligence, represented no more than 0.1% of applications in the 1998 scheme year. The bulk of these applied in the sheep sector. A one year penalty would apply in cases where, for example, a proportion of ewes applied on are found not to be ewes at inspection. A two year penalty would apply where, for example, a farmer made application for premium or headage on sheep which he did not have at the time of application or at time of inspection.
Additional Information.
In general, where an applicant makes an error in the completion of an application form, my Department allows an opportunity to correct such errors. The most common error over the past few years has been the incorrect transcription of tag numbers on application forms. The level of such errors has, however, greatly decreased in the past year following the more widespread use of new information technology in the processing of the special beef premium scheme whereby farmers are no longer required to list the individual ear tag number of all animals being applied on.
Given the overall value of these direct payments to farmers and the fact that that value is set to increase following from the successful outcome of the Agenda 2000 negotiations, it is inevitable that the Commission will wish to ensure reasonable levels of controls are in place in the various member states.
Since January 1999 greater emphasis has been placed on the need for farmers to fully respect the regulatory requirements for the identification and registration of bovine animals. These requirements are particularly important in the context of traceability and the national beef assurance scheme.