I propose now to revert to Priority Question No. 31. The question is in the name of Deputy Doyle, who is the only Deputy who will be entitled to ask supplementary questions.
Priority Questions (Resumed)
31 Deputy Andrew Doyle asked the Minister for Agriculture; Fisheries and Food the reason there has been a delay in processing the claims submitted under the aid scheme for crops damaged by frost; and if he will make a statement on the matter. [22298/10]
I apologise to the House and to Deputy Doyle for not being present when the question was called. I apologise to Deputy Doyle and assure him there was no slight intended.
There has been no delay in processing claims submitted under the compensation scheme for crops damaged by frost. As at the closing date of 19 February 2010, some 359 applications which related to potato and-or field vegetable crop losses due to frost damage were received. Following a preliminary desk examination, some 20 claimants were deemed to be ineligible under the EU state aid rules which require that the losses suffered must exceed a 30% threshold in a given production period.
All the remaining 339 applicants who were deemed to be potentially eligible were inspected during February and March. The purpose of these inspections was to verify the areas of the crops affected and the extent of losses being claimed. A total of 255 growers were deemed to be still eligible following these inspections in the context of the relevant terms and conditions of the scheme and in particular in relation to the state aid rules. I apologise for the complexity of the rules.
The principal conditions required by EU state aid rules include: losses for the 2009 harvest must exceed 30% of the average of production in the three previous years, or a three year average of the previous five years, excluding the highest and lowest years; the level of aid must not exceed 80%, 90% in least favoured areas; assistance must be reduced by 50% if the farmer has not taken out insurance to cover 50% of his or her average annual production and losses must be calculated by subtracting the value of the 2009 production from the average of the annual value of production in the three previous years. Application of these rules has made implementation of the scheme quite complex both for the Department and growers. As the Deputy will see, this puts a significant burden on the officials who are processing the claims as speedily as possible.
The current situation is that all 255 growers who met the 30% loss requirement following the inspections were written to and requested to supply documentary evidence to confirm their financial losses. Most of them were given two weeks to reply. Many of the applicants have since requested an extension of the time to enable them to assemble the necessary documentation.
No doubt the good weather in recent weeks has contributed to the delay as many of them would probably much rather be out in the fields. As the documentation is being received, financial losses are being assessed. In some cases it is necessary to visit applicants to seek additional information or to clarify information received. It is expected that payments will commence shortly to growers cleared for payment.
That answers the first question because nobody has been paid yet. The Minister of State is correct when he says it is a complicated computation which has frustrated people. I wrote to the Minister asking him to take into account that many growers process their crop on the farm which means there are no records but only estimates of yield available. I asked the Minister if this would be allowable. In his reply he stated there is nothing in the scheme preventing growers from processing part of their crop and for this to be taken into account. He stated that average yield data can be applied in the absence of documentary evidence. On the basis of the Minister of State's reply I do not know if anyone would be able to prepare the amount and compilation of the documentary evidence needed within the designated application period. I urge the Minister to reconsider.
To put the matter into context, €180 million was set aside for the pork recall scheme and up to 5 May there has been an uptake of just under 50%, a total of €87.5 million. The Minister of State referred in his reply to people sowing crops. Some of the people are not able to access working capital this year. I ask him to reconsider the terms of reference of this scheme. If this scheme is meant to be for practical purposes of assisting people who suffer crop damage, we should be able to help them.
In fairness to the departmental officials, they are taking a very helpful approach to the processing of payments and they cannot simply wish away the rules coming from the European Union. These rules are fairly clear although they sound complex when read into the record of the House but when broken down they are relatively easy to follow. We are still awaiting documentation from many of the growers. Once this documentation is received, we will proceed the claims as fast as possible. The officials have been fairly helpful. In some cases they have paid return visits to growers. We do not need every last piece of paper in triplicate before we process the claims but the Department has taken a fairly common-sense approach.
I refer to the reply I received to my letter. It stated that average yield data can be applied. The rules as outlined by the Minister of State in his reply today would suggest that is not applicable; he refers to doing away with the highest and the lowest, to a list of items. Research is done every year. Will the Minister of State clarify if this can be accepted in the processing of the claims as opposed to the actual figures outlined in therules?
I am not an auditor so I do not claim any significant insight into the rules but it has to withstand an audit. I said in my earlier reply that a common sense approach is taken. However, the bottom line is we have to satisfy both the Department of Finance officials and the European Union officials. In my view a good approach has been taken. I expect payments to commence within two or three weeks' time. That is a bit of good news.