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Dáil Éireann debate -
Tuesday, 22 Feb 2000

Vol. 514 No. 6

Priority Questions. - Direct Payment Schemes.

Willie Penrose

Question:

48 Mr. Penrose asked the Minister for Agriculture, Food and Rural Development his views on whether the penalties for errors in applications for direct payments are excessive; the plans, if any, he has to instigate a review in this regard; and if he will make a statement on the matter. [5060/00]

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.

Does the Minister accept the all-party Oireachtas committee which examined the provision of quality customer service by his Department was not impressed with it? Does he also accept it recommended the establishment of a properly resourced independent appeals system? Will he agree that the committee found it was the complexity of the forms used in the various schemes that caused the greatest headache and that the forms were not user-friendly? Does he accept there is a failure to use clear and unambiguous language in the forms? I preface my remarks by saying I was pulled up for not asking questions and, as a lawyer—

And a good lawyer.

—I was embarrassed by that. Does the Minister accept that the establishment of a forms audit agency which could notify farmers waiting seven days whether the form was correctly completed would be a step in the right direction to minimise the penalties that apply? Does he accept that the principle of proportionality enunciated by the European Court of Justice has not been heard of by the mandarins in his Department?

The payment of premia and headage to farmers impinges on a number of agencies. On the one hand, the Oireachtas com mittee, which the Deputy mentioned, wants the processing of payments to be made more simple, streamlined and efficient while, on the other hand, the Committee of Public Accounts want control, audit, supervision and accountability in respect of such payments.

Given that very large sums of money are paid to farmers under these schemes, there must be accountability but there must also be balance and fairness. The proportionality of penalties under the schemes is out of kilter. The penalty whereby farmers in some cases are denied full payment for one or two years is too great. Given that these penalties are written into the regulations, this is not only a national problem. I have pressed the European Commission to ensure that the penalties are diluted, fairer and have a sense of balance and proportionality. I have given that commitment to the House.

I have given a commitment to the House to establish an appeals unit, with an independent supporting staff and all that goes with that. That is being established and provisions made for it with the Attorney General's office at present. Having regard to the establishment of the independent unit, improvements in EU regulations and improvements in the processing of application forms, which we together with the farming organisations are seeking to simplify, improvements in technology and a major improvement in the way forms have been completed and returned to the Department, I expect there will be a major improvement in the operation of these schemes. That is important as direct payments account for, on average, 57% of farmers' incomes.

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