As a condition of EU approval, REPS payment rates must be fully justified in accordance with strict regulatory criteria. The EU regulations governing REPS provide that support is to be calculated on the basis of income forgone and additional costs resulting from the commitment given together with the need to provide an incentive. Good farming practice is the reference level for calculating income forgone and additional costs resulting from the commitments given, and the incentive element of the payment cannot exceed 20% of the costings.
I am aware of the social welfare and forestry premia provisions currently in place. Issues relating to taxation are matters within the remit of the Department of Finance, but it should be noted that the cost of compliance with REPS specifications is an allowable deduction in the calculation by individual farmers of their income tax liability.
As regards the attractiveness of REPS, during the FEOGA year that ended on 15 October 2002, my Department received 12,383 applications for the scheme. This is one of the highest rates of application in any year since the scheme was first introduced in 1994. Under the new REPS, the average payment is €4,900 as compared to an average payment of €4,400 in the previous scheme.
I intend in the near future to put in motion a consultative process about REPS involving a wide range of stakeholders, leading into the mid-term review of the rural development plan in 2003. Full consultation and detailed preparation are necessary to ensure that any proposals that may be put to the EU Commission in 2003 are robust and fully justifiable within the terms of the relevant EU regulations. This process will cover all aspects of the scheme including payment rates. I intend also to announce certain administrative changes to REPS designed to simplify aspects of the scheme and encourage take-up.
