Dáil Éireann debate -
Tuesday, 12 Feb 2002

Vol. 548 No. 2

Adjournment Debate. - Area Aid Revised Criteria.

Mr. Connaughton

I am delighted to have the opportunity to make the House aware of a problem that has arisen in the Department of Agri culture, Food and Rural Development with regard to area aid. This relates particularly to the 5,000 letters which have been issued from the area aid office in Hume House over the past week.

A great number of farmers cannot understand why they got the letter in the first place. One farmer told me that a few years ago he got paid on the same land without any problems. From the contents of the circular it appears eligibility for area aid is in doubt in 5,000 cases. The inference in the letter is that under eligibility for payment under the arable aid scheme there is at least a doubt cast in the case of 5,000 farmers. I am sorry the Minister for Agriculture, Food and Rural Development is not here this evening because this is quite a technical matter and there are a number of technical questions which I wanted to ask him.

A great many farmers are terribly upset about this. As I said, some farmers have got paid on the same land for the same scheme previously. One farmer, who grows a substantial amount of corn on conacre, has been told that the land on which the crop was grown was not eligible. He had no way of knowing that when he took the land.

In many cases of which I have personal knowledge, the letters went out to people who had done nothing more than transfer eligibility from one part of the farm to another. This is allowed for every year and there is a transfer document for doing that. I have a sneaking suspicion that what has happened is that the Department, through an oversight or otherwise, has not seen those transfer documents because I know of at least nine or ten cases where the people who got one of those letters had the eligibility transferred to the land in question and everything was in order.

In fairness to the staff at the area aid unit, over the years they have been most helpful and courteous. The questions I want to put, through the Minister, to the staff are the following. When farmers must answer the questions concerned to give proof, what sort of proof are they looking for? What must a farmer do to prove that the land in question had eligibility, which means, as the Minister of State will be aware, that corn was grown on it in 1988, 1989, 1990 and 1991? Under those conditions, what proof is needed which will be acceptable to the area aid unit? Would it involve getting a letter from a contractor stating that he or she ploughed and sowed it, from an auctioneer stating he or she had it rented as conacre for sowing or from a contractor who had a combine harvester? I hope the script they gave the Minister of State, Deputy Moffatt, will outline those details because that is what farmers want to know.

It is obviously difficult to prove the purpose to which the land was put during those years. I understand there is no database containing details of the acres under corn in the years concerned. Many of the 5,000 concerned have their answers ready and could answer quickly, but at the same time I want the Minister of State to outline what those farmers must do to prove eligibility.

Minister of State at the Department of Health and Children (Dr. Moffatt)

I thank Deputy Connaughton for raising this issue on the Adjournment. The Minister regrets that he cannot be here himself to take it.

As the Deputy will be aware, the Department of Agriculture, Food and Rural Development is responsible for the disbursement of over €1.1 billion in direct payments annually under the livestock and arable aid schemes and, when added to REPS, payments represent 56% of total farm income. Some €130 million of this is paid in arable aid.

The objective in the operation of all the direct payments schemes is to provide all those involved with the relevant information they need to comply with the rules applying to the schemes. Producers must be informed of the terms and conditions applicable to the various schemes, including the arable aid scheme, in order that they can maximise their entitlements.

In accordance with EU regulations, arable aid may be paid to arable producers who produce arable crops on eligible land. Arable aid may also be paid on eligible land which is set-aside in accordance with the terms of the arable aid scheme. Under these regulations eligible land is land which, on 31 December 1991, was not under permanent pasture, was not under permanent crops or trees, or was not used for non-agricultural purposes. Permanent pasture is land used for grass production for five years or more at 31 December 1991. Permanent crops are crops that occupied the land for five years or more at 31 December 1991, for example, orchards. Accordingly, the land had to be tilled at some stage in the period 1 January 1987 to 31 December 1991.

In keeping with the Department's commitments under the protocol on direct payments to farmers, the area aid unit concentrated all its resources on ensuring that arable producers received their payments on the first possible date of payment, 16 November 2001. On that date over €119 million was paid to 95% of arable aid applicants, which by any standards is a very efficient delivery of service to farmer clients.

All payments issued by the Department are subject to ongoing audits. This is an essential aspect of the control measures to ensure this expenditure of public moneys is correctly accounted for and indeed is vital to the underpinning of the future availability of these payments. In this context, an audit was carried out on all payments made under the 2001 arable aid scheme. The aim of the audit was to ensure no arable aid was paid on land that did not meet the eligibility criterion which I have already described. As a result of the audit it was necessary to write to some 5,000 applicants to clarify the question of eligibility. This is the background to the letters that farmers received last week.

The Department will examine each response on its individual merits, taking account of the supporting documentation and the farmer's arable aid record. If any farmer is not in a position to supply the supporting documentation by 20 February, he or she should write to the Department indicating this by 20 February and submit the information as soon as possible thereafter. I am confident that the bulk of the applicants concerned will be able to respond positively to the letter but it has to be accepted that once the issue has been identified it has to be dealt with.

I emphasise that these letters should not be seen in a hostile context but rather in the context of issues identified during an audit. There are very considerable sums involved in direct payments and this therefore places an onus on everybody to ensure that the benefits to the applicants are maximised, that avoidable penalties are not incurred and that there are robust and effective controls in place to protect the interest of the taxpayer.