JOINT COMMITTEE ON AGRICULTURE AND FOOD debate -
Wednesday, 21 Feb 2007

Farm Retirement Scheme: Discussion with Farm Retirement Groups.

Chairman

Two groups have made submissions to the joint committee outlining their concerns about the early retirement scheme. The Farm Retirement Group for Justice will make its presentation first, after which there will be a question and answer session. The committee will then suspend for a short period and reconvene to hear the second group, the National Association of Early Retirement Scheme Farmers. I welcome Mr. Seán Guerin, Mr. William Nugent, Mr. B. J. Wall, Mr. Anthony Enright, Ms Rose Curry and Ms Brigid Guerin and other members of the Farm Retirement Group for Justice in the Visitors Gallery. Mr. Guerin will make a brief introduction. Mr. Wall and Ms Curry will then make the presentation.

I draw everybody's attention to the fact that members of the committee have absolute privilege but the same privilege does not extend to witnesses appearing before the committee. Members are reminded of the long-standing parliamentary practice to the effect that members should not comment on, criticise or make charges against a person outside the Houses or an official by name or in such a way as to make him or her identifiable.

Mr. Seán Guerin

I thank the Chairman for the invitation to attend this meeting. I also thank Deputy Wilkinson for the excellent report he compiled as a result of our submission regarding the anomalies in the farm retirement scheme. I thank those Members of the House who asked questions of the Minister for Agriculture and Food, Deputy Mary Coughlan, but did not get a favourable response. Last November there was an upgrade of the ERS payment to those still participating in the scheme. This payment should be backdated to the date of introduction of the second scheme in 2001. This was an example of further discrimination.

Ms Kathy Sinnott, MEP, helped us to take our case to the Committee on Petitions in Brussels. I thank her for this. I also thank those MEPs, foreign as well as Irish, who spoke in our favour. Ms Sinnott has now been appointed vice-president of the Committee on Petitions.

The members of our committee present today are Mr. William Nugent, vice chairman; Mr. B. J. Wall, PRO and legal adviser; Mr. Anthony Enright, treasurer; Ms Rose Curry, speaker; and Ms Brigid Guerin.

Mr. B. J. Wall

I reiterate Mr. Guerin's thanks to the Chairman and the committee for hearing us again today, the support the committee has given us in the past and the excellent report produced by Deputy Wilkinson as rapporteur, which has been recognised at Commission level. I will briefly outline what we have done and what we have tried to achieve since we made our first submission to the committee in June 2003.

In the subsequent period we have had six ministerial meetings, five meetings with senior officials from the Department of Agriculture and Food and several meetings with Deputies, Senators and MEPs. Following our submission to the committee, we went to the European Parliament because we were making little progress in our meetings. The retiring Minister, Deputy Joe Walsh, had recognised the problems in the scheme and was amenable to doing something about the matter but, unfortunately, he retired. Effectively, we had to start again. Our frustration at the failure to achieve tangible results from meetings with senior departmental officials led us to approach the Committee on Petitions of the European Parliament, to which we made a detailed submission, a copy of which I will give to the committee. I will briefly outline its main points and the committee can examine the full submission at its leisure.

We pointed to the various flaws and difficulties the scheme had created for a number of people. We did an appraisal and a commentary on the two schemes and examined several studies by various academics and institutions. That was not included in the original submission we made to the committee. Virtually all the studies supported many of our complaints, including the lack of indexation, the fact that national retirement pensions were deducted, the fact that people were not told initially that this would happen and the loss of entitlements and quota in the original schemes. It is amazing that these points came up repeatedly in many of the studies.

One of the other avenues we considered was the possibility of taking the legal route, if the political route and political lobbying does not cause senior civil servants in the Department of Agriculture and Food to see sense. We have discussed this with junior and senior counsel. Senior counsel were of the opinion that the Statute of Limitations might prevent us getting into the High Court. However, having discussed the problem with the Commission — I should have picked up on this and read the Mulder case a little more carefully — it pointed out that the European Court of Justice, in its judgment in the famous Mulder case, stated cases similar to the Mulder case, that is, cases of public interest and involving the vindication of citizens' rights, should not be statute barred. These cases should be taken and the situation corrected. I wanted to point out that avenue to the joint committee.

Furthermore, when we met the Commission's representatives on a number of occasions, they were also interested by the fact that there could be a breach of contract. They are firmly of the opinion that since the Irish authority — the Department of Agriculture and Food — is the implementing authority for these regulations, the contract is obviously between individual farmers and the Department. In several instances, farmers wrote into their agreement with the Department the fact that their quotas would be returned to them intact at the end of the retirement period. The view from the legal people in the Commission is that this is a legally binding contract. In those instances, where the solicitor was wise enough to write in that proviso, this is a binding contract. We pointed this out at one of our meetings with the Minister, Deputy Coughlan. She took away one or two sample contracts but we have not heard anything from her since.

Indexation is another major bugbear in this scheme. At four or five of the early meetings we had with senior departmental officials, they were adamant that State funds could not be used to top up or index the schemes. However, in meetings with Pierro Moro, who was previously the Commission official in charge of all rural development schemes for Ireland, he pointed out that the Commission had no objection if the State wanted to use its own money to top up these schemes. When we pointed out that the improvement in farm incomes was slow — and minor by comparison to the improvement in incomes for all other sectors of the community — he could see quite clearly that a pension that was not indexed would diminish rapidly in terms of its real value. He told us that the Commission had no problem with the State using its funds to top up such schemes. We came back to the Department of Agriculture and Food, but its officials were still adamant that this was not the case. They said that if we got it in writing from the Commission they would believe us, so we went back and got it in writing. We are quite happy that the top-up of both schemes at the end of last year was as a result of that campaign.

In our previous submission to the joint committee, we dealt with the questions of forestry premia and joint management.

It is important to bring to the notice of the joint committee that as a result of our meetings with the Commission, the Department has started to take action during the past five or six months. I have letters here from the director general of the Commission agreeing to changes by which the widow's pension and invalidity pension will not now be deducted from the farm retirement pension. When we asked the Commission's representatives to justify how they could declare an invalidity pension to be a retirement pension, given that a person could be in receipt of it long before the age of 65, they said "Oh yes, we see where you're coming from now". So moves are afoot by the Department. There is a letter from Mr. Demarty, the Director General, basically agreeing to those changes in the scheme.

There has been progress in some areas but very little on other issues. We have presented this submission for your perusal, Chairman. We have letters from the Commission verifying that it is strictly of the opinion that it is a matter between the Irish authorities and those of us in this group who are in dispute with them. They have written to us — and I can quote from the letter if needs be — saying that at the end of the day if the Irish authorities do not act, the Commission's legal division will assist us in preparing a case for the European Court of Justice. We do not want to go down that road.

In the past two months, we have submitted 79 cases and I have the file here. The amount owed to most of them has been itemised in serious and exact detail. In some other cases it has not been, however. We have been assisting individual farmers to write to the Commission to request details of what was deducted from them and why they did not receive full pensions.

On the way in, I told Deputy Wilkinson that I had handed some of the replies from the Department to these individuals to a professor of mathematics in Limerick University and to another professor who has been teaching European law and the Common Agricultural Policy. Neither gentleman could make out exactly what the letters meant. It is not fair to write in such convoluted terms to the people we represent. I am not denigrating them in any way by saying that they are of a certain vintage and educational standard. I certainly could not make any sense of those letters. In such instances we sent the letters back marked "to be negotiated" because, quite frankly, we could not make head nor tail of them.

That is essentially what I have to say. We would be delighted to answer any questions members of the joint committee may have. I thank you again, Chairman, for the opportunity to make this presentation.

Ms Rose Curry

I thank the joint committee for inviting us here. We have another group and there is a correlation between both groups. Some 50% to 60% of our group are old age pensioners who are continuing to milk at the moment. Most of them want to get out of the trade and pass it on to young farmers. Basically, however, they now see their assets being melted away under this exchange. They are most vulnerable people because of their age profile. Some of them are in their 70s. They do not understand what is going on. They paid dearly for an asset as their nest egg for superannuation purposes. It was to be their pension fund so that they could retire in their old age. They are being forced to sell, although these priority cases are not theirs but the Minister's. She has taken 30% of their assets, which they see as a confiscation of their pension fund because that is what it was. They are frightened and vulnerable and there is a great deal of scaremongering going on. They are being forced into an exchange into which they do not particularly want to go. They see their superannuation nest egg disappearing in front of their eyes. On that point, we correlate with the retired pensioners.

Chairman

Thank you very much. We will now take some questions.

Deputy Crawford

I apologise on behalf of Deputy Naughten who is otherwise occupied. He will get back here as quickly as he can. Speakers have provided us with a clear indication of their worries. Obviously there are quite a few people of whom large repayments are being requested because of the Department's failure some time ago to recognise their situation. It is causing much anxiety for many people. I welcome the changes that have been made, however. The fact that increases were given is an admission that the scheme was not right from the start. While I appreciate Mr. Wall's request to date payments back to 2001, the least the Minister should do is to make refunds from the date on which she obtained sanction from the Commission, which was in March 2006. That is the very least that should, and must, be done.

In the course of written and oral questions with the Minister, Deputy Naughten got a clear indication that the Minister was aware of the fact that, since last March, the Commission had no objection. The issue of indexation comes more into light than ever with the announcement last weekend by the Tánaiste and Minister for Justice, Equality and Law Reform, Deputy McDowell, emphasising that anything less than an increase of €100 in the State pension over the next five years would be of no use because of predicted inflation levels. If that is so in the case of the State pension, obviously it is pointless not to apply indexation to a European-funded pension scheme accordingly.

Will Mr. Wall clarify his statement on the position of pensions? The pensions for widows, widowers and those with disabilities have applied to all for some time. I take it Mr. Wall's point was that the position in the cases of the contributory and other State pensions should be similar.

Deputy Naughten and I, along with Senator Coonan who is also a member of the Fine Gael Party, will do our best to support Mr. Wall and his colleagues on other logical related matters. It has been a long fight and we congratulate him on at least getting so far, and in achieving some recognition and increased support. I hope we at least can get the payments back-dated to March. In my book, that is likely.

I noted the week before last in the Dáil that the Minister of State, in contributing on a European Union related Bill, emphasised that there was no problem in the Bill being applied retrospectively. When it is suits the Government, it will state it is not possible to legislate retrospectively, but he spoke of that Bill applying retrospectively right back to the date of our entry into the EU, which sounds strange. That Bill is another issue and has other implications.

Deputy Wilkinson

I welcome Mr. Guerin, Mr. Wall and their colleagues and thank them for the presentation. My role in the matter is well known and I do not wish to go back over that again.

Broadly, I support the delegation's presentation. It is factual and correct, but there is one area on which I want to dwell in the short time available, that is, where many people have availed of the farm retirement scheme, drawn the pension and are being asked to repay fairly substantial amounts of money because they have been in receipt of the old age pension. As late as yesterday, I wrote to the Minister for Agriculture and Food, Deputy Coughlan to point out the position in a particular case and I enclosed the letter I received from the people concerned. There is a fair degree of stress attached to all this and it is one area I am anxious would be addressed. While I cannot say any more about that here, my party will hold a policy meeting tonight with the Minister and I will raise these questions again.

As my views on the matter are well known, I do not wish to go back over them again. I support what the delegation is presenting. I always have supported it. I picked up the anomalies in my constituency on several occasions. We will take the matter to the Minister again and see what happens. That is all we can do.

Chairman

I compliment Deputy Wilkinson on his report and the amount of effort and time he put into it.

Deputy Wilkinson

I thank the Chairman.

Senator Coonan

I also welcome the deputation to the committee and thank its members for bringing us up to speed on the current position. The issue we hear raised throughout the country is the onus on everybody to get young people involved in agriculture and, if there were an adequate farm retirement scheme, it would be one of the better ways of doing so. The serious difficulty, certainly in Tipperary, which is my part of the country, is that many young people are running away from farming. The presentation to the committee is a clear indication of the frustration being experienced by those involved in agriculture.

On a recent visit to the constituency by the Taoiseach during which he allocated money, a person, in thanking him afterwards, stated the community was entitled to the money, that it was what they, as a community, were there for, and that, having built a structure, they were entitled to that money and did not feel under obligation or compliment to anyone for receiving it. Government is about supporting people.

This case we are discussing is a clear example of a group that has been let down, namely, those who brought farming out of the dark ages in the 1970s and into the present day and on whose backs the current prosperity of the country was built. I am disappointed about this.

There are three issues on which the members of the delegation might expand. Are they stating clearly that indexation is a problem for the Government and that it does not present a problem at European Union level? Are they stating that the matter is in the hands of the Government? Has the group made any progress to date on the issue of quota rights that were lost as a result of the farm retirement scheme? The presentation referred to the possibility of there being a legal route. Bearing in mind that this has been ongoing for a considerable time, will the delegation indicate when it proposes to go down that road or will it leave it until after the general election?

The current position on farm retirement scheme is appalling. As far as I am aware, the scheme is suspended and people cannot even apply for the scheme. The group might expand on that. If that is so, this is another disgrace because time waits for no man. If a farmer is in a position to retire, the facilities should exist for him or her to retire in peace and dignity.

Chairman

We must suspended the meeting shortly for a vote in the Dáil. Mr. Wall may wish to use the time available to read a European document into the record.

Mr. Wall

This is an internal European Commission memo discussing our complaint under the heading, Report by the Irish Joint Committee on Agriculture and Food. It states that, related to this petition is a comprehensive study, published in February 2005, by the Joint Committee on Agriculture and Food called Report on the Operation of the Scheme of Early Retirement from Farming, and that the report addressed the main points raised in the petition and proposed a number of recommendations to manage the main areas of difficulty, which covered joint management applications, the indexation anomaly, income and age limits, taxation, forestry premia, Common Agricultural Policy reform, compatibility with other national pensions and leasing. The document further states that the Commission believes that these suggestions could address most of the concerns expressed by the group at national level.

Chairman

I thank Mr. Wall. As there could be more than one vote in the Dáil, it is not worth deciding to return immediately. We will suspend until after the Order of Business in the Dáil. Is that agreed? Agreed.

Sitting suspended at 12.10 p.m. and resumed at 12.30 p.m.

Deputy Hoctor

I welcome our guests, some of whom I had the opportunity to speak with earlier. I am on record as being in support of the farmers' groups that advocate early retirement. However, it is clear that certain issues have not been addressed and remain unresolved. We will be obliged to raise these again with the Minister and her Department. One of the issues about which I am concerned is that involving farm partnership and farm management and the difficulties experienced by some farm families in this regard. Individuals acting in a legal advisory capacity recommended that people take a particular route and while some benefited from doing so, others were later penalised because of the wording included in their contracts. Perhaps our guests might be in a position to cast some light on this matter. I am aware that a number of solicitors have been working on this matter but a resolution has not yet been found.

Deputy Naughten

I apologise for my late arrival. I will try not to repeat questions that were posed earlier. I know the group brought the petition to the petitions committee in Brussels and, subsequent to that presentation, a response was sent to the Minister. Has the petitions committee come back with a further reply following the response it received from the Minister? How can and how does it intend to progress the matter? Has the group received a response from the Minister for Agriculture and Food as to how she intends to address the concerns of the petitions committee?

The most critical issue for many participants involved in the early retirement scheme is the comparative contradiction between the old age pension and the early retirement scheme. In fairness, the old age pension has increased significantly over the term since the commencement of the early retirement scheme. On account of the fact that the early retirement scheme payment was fixed, each time the old age pension was increased the comparative income of a participant in the early retirement scheme fell. This fall was significant when inflation was taken into account. The Minister has acknowledged this gaping anomaly with the introduction of the top-up payment. She was made aware of the situation in March 2006, yet it was November before she decided to increase the payment, which was an error. Has the group any comment to make on that?

Has any progress been made on the lack of communication between the Department of Social and Family Affairs and the Department of Agriculture and Food? It is hugely frustrating for many participants in the early retirement scheme that they get, literally, a summons in the post from the Department of Agriculture and Food saying it has received information from the Department of Social and Family Affairs that the farmer has been in receipt of an old age pension and that, as a result, it is now demanding the return of tens of thousands of euro. This has left people in a situation where not only have they lost the balance of their early retirement scheme pension, they must also make a repayment to the Department of Agriculture and Food. A simple phone call from the Department of Social and Family Affairs could resolve these issues and ensure people do not find themselves in that situation.

I realise the groups are here to discuss the early retirement scheme, but have they come across any hardship cases involving people who have left the scheme, who cannot return to farming, and who are forced into a situation where they must lease their land? If these people are on a non-contributory pension, the value of the lease is taken from their old age pension. This cohort thereby suffers a significant fall in income for the future. Has this issue been brought to the groups' attention? How could this committee make progress in that regard?

I have not focused specifically on much of what was in the presentation as my colleagues have concentrated on that. I have tried to tease out some other issues.

Mr. Wall

I thank all the members of the joint committee for their contributions and questions. Deputy Crawford raised the question of indexation. While no provision was made in the two previous schemes nor in the new scheme for indexation, the Commission has made it clear that, if the State wishes to use its own money to top up payments, it will not stand in the way of that. There are, therefore, possibilities for increasing the payment.

I must express our dismay and disillusionment with the situation. The new scheme has been approved by the Commission since 20 September 2005 and at meetings we had we were told that, by September 2006, all details with regard to applications, etc. should be available. However, we still do not know what is happening and applications cannot be made. What is worse, Council Regulation No. 1698/2005, which approved the new retirement scheme, provided for a payment of €18,000, but the Government has decided it will only pay €15,000. Does it ever learn from its mistakes?

The Government has just had to top up two schemes, which is an admission they were a failure while the second scheme only had 1,975 participants as opposed to 12,000 in the first. This was a clear indication that the scheme was not very attractive. The Government has not learned that lesson. I would like the committee to raise the issue with the Minister and discover why she is paying less than the minimum laid down in the regulation by the Commission.

With regard to the question relating to the Department of Social and Family Affairs and its interaction with the Department of Agriculture and Food, no progress has been made. We met both Departments in Dublin. The attitude of the Department of Agriculture and Food on the day was very much a question of wondering why it was being hauled in for questioning to be embarrassed in front of its colleagues in the Department of Social and Family Affairs. The attitude of the Department of Social and Family Affairs was that it was just carrying out instructions from the Department of Finance and, if the Department of Agriculture and Food said pensions should be deducted, it had no option but to deduct them. If the Department of Finance and the Department of Agriculture and Food said tomorrow morning the pensions deducted should be refunded, the Department of Social and Family Affairs would do that. We have no problem with that Department. The nut to crack is the Department of Agriculture and Food. The short answer is there is no improvement in communications.

On the issue of people leaving the scheme, I informed the committee earlier in my submission that we have submitted files on 79 hardship cases. It is heart-rending to read about some of these cases. The hardship created would draw tears from a stone. Not only did people leave the retirement scheme without a quota on their land, they then had to find tenants for land without a quota and take whatever they could get because they were no longer in a seller's market. In some cases, people joined the retirement scheme because of ill health and they prorogued debts until the heir could take over. When they left the retirement scheme, they had no quota, no means of earning a reasonable income from the land and no means of paying back the postponed debts. These are situations of extreme hardship.

The petitions committee wrote to the Minister on 5 September 2006 but, to the best of my knowledge, it has not yet received a reply. The gist of the letter sent to the Minister was that the petitions committee would be much obliged if the Minister would communicate precisely what actions were planned by her Department to follow up the recommendations made by the Oireachtas joint committee. We are not aware of a reply from the Minister. At the end of his letter, the chairman of the petitions committee stated that the committee had detected some good will — it appears the Commission also detected good will on the part of the Department — and hoped the Department would move rapidly to resolve the issues.

Similarly, an internal Commission document, dated March 2006, related to the same issue. It stated that the Commission had recently witnessed good will by the Irish authorities to address such difficulties, even by promoting economic support to mitigate such a social problem. It went without saying that the Irish authorities should be requested to address the problems raised by the group by reviewing the schemes and making the necessary amendments, taking into account also the recommendations already made by the Irish Parliament's joint committee. This was in line with the suggestion made by the petitions committee at the last meeting in January 2006. The Commission stated it was always available to re-examine with the member state the proposed amendments in the framework of the EU legal provision available.

There are requests from the petitions committee and the Commission to deal with the issue. We have pursued the Minister on the issue but in the past 18 months we have been unable to meet her. We have met her representatives and have been given tentative nods and winks suggesting that perhaps something can be done. They asked us to submit all the cases on our books and a detailed estimate of what it would cost to resolve it. We have provided this information. It will cost approximately €4 million or €5 million to compensate people who have lost quota and stop the demands for repayment of pension where people are unable to repay it and sort out the other anomalies in the scheme. It is a tiny amount of money by any standards, when €600 million can be paid out to buy toll gates and such like. The sum of €4 million would do a great amount of good and the relief, assistance and goodwill it would bring in this instance is incalculable.

Mr. Guerin

I wish to address my remarks to Deputy Naughten, who asked a question about the top up payment. Last November the retirement scheme payment was upgraded for those still in the scheme. I refer to a letter to the newspapers written by Deputy Naughten advising that this payment should be backdated to March. We do not agree with this proposal because the assessment scheme was introduced in January 2001 and in our opinion the payment should be backdated to that date. This is further discrimination.

Mr. Wall

There is a precedent for Mr. Guerin's request. Previously when the widow's and disability pension was taken away in February 2002 it was backdated to 27 November 2000. This is the precedent.

Mr. Guerin

I refer to a conference that Deputy Naughten chaired last March in Birr. The Minister for Agriculture and Food, Deputy Coughlan, quoted the changes she was making in the early retirement scheme, ERS, for 2007. One was that the milk quota would be put on the open market. As a result of those comments, many people made up their minds to get out of dairying and to sell their quota on the open market. Those people have lost out on everything as a result. Ms Curry referred to this in her contribution. It is a terrible situation.

It was proposed that the pension would be €18,000 and the qualifying age for transferees would be raised to 50 years. The Minister has reneged on her word and all those promises. What is the meaning of all those promises when she does not stand behind them?

Mr. Wall

I wish to ask a question. Did any Attorney General make an order or request the Department of Agriculture and Food to refund national pension offset against a spouse's PRSI payment? This is very serious. I have asked the question and it is up to the committee to make inquiries because we are not in a position to do so.

Deputy Naughten

Sadly, we are not in a position either because advice given to the Government by the Attorney General is confidential to the Minister. The Minister is not accountable to this House or to this committee regarding that advice.

Mr. Wall

Senator Coonan asked about the legal route. We have decided as a group that unless we hear something positive from the Minister or her representatives by the end of this month we will initiate the process by the end of February.

Ms Curry

This problem is not going away and it will roller-coast. There are 22,000 people in the dairying industry and it is reckoned that this number will drop to 11,000 by 2010. There are only three reasons for people leaving their work, namely ill health, the death of a spouse or old age. The reason for the majority of those leaving will be old age. These people farmed even when they had no shoes. They are the backbone of Irish industry. They cannot be scared or frightened. They ask for a fair and just hearing and a fair and just price for what they consider to be their asset and their pension — their quota. As one farmer said to me, "I will not have one leg in the grave, I will have two legs in the grave".

Nobody wants the comely maidens dancing at the crossroads any more. This is a dynamic Ireland. The young farmers can afford a quota and they know what they are taking on. They have university degrees. The point of restructuring in the dairying industry was because they were not putting in their quota and now we have gone into an exchange system. The only people going into it are people who are vulnerable, disabled or old people who are coming under the dormancy rule or are caught under the "use it or lose it" rule. They think it is like Nazi Germany because their assets are being confiscated.

The Minister said it was a licence. The quota never had the characteristic of a licence. It is not revocable, not renewable and it is not given once a year. It has all the characteristics of an asset such as stamp duty, capital gains or capital allowance. Those concerned were encouraged by their dairy people to go into the scheme. They were told this would be their retirement pension, not enough to buy a villa in Spain but to have a comfortable lifestyle.

Farming has been a very cohesive life and they have always got on well together but this pension and the exchange is causing a lot of controversy between farmers. People ask why they should give their quota to another when they have worked all their lives. They ask why they should give away 30%. They argue they have worked hard on a 24-seven basis. They were delivering calves in the middle of the night and in the rain. They argue they should not give away part of their assets. Nobody here would do so, yet these farmers are in the situation where they are being forced into something and they are scared and frightened.

In this age of the Celtic tiger economy we are the success story of Europe but there are people who are being forced into an exchange about which they know nothing. It should be explained to them or the Department should do the decent thing, as has been done in Spain, and buy all the quota, give it to the priority cases but give the farmers a fair price for their quotas.

The quota is worth what it is worth and these people have worked hard all their lives. It should be remembered that before tourism, farming was the backbone of the Irish economy and it was farming that brought us into the 20th century. These farmers had no shoes and they went around selling their milk in cans but now they are left without knowing how much the pension will be and their nest egg has been taken away. We all know this is not fair and it must be looked at. Otherwise it will be like a roller-coaster. In light of the Italians winning in the dispute with the UK and the quota crossing borders, then these people will believe they were robbed. This issue will not go away.

Chairman

The committee will send a report of this discussion to the Minister and her officials. I thank Mr. Guerin and the chairman and the group for attending today and for responding to the questions raised.

Mr. Guerin

I thank the committee for inviting us to attend the meeting and I thank all the Deputies who have come to listen to our grievances. I hope that when we come back here again that each and every one of the Deputies will be re-elected.

Chairman

I thank Mr. Guerin. We appreciate those good wishes.

Sitting suspended at 12.49 p.m. and resumed at 12.56 p.m.

Chairman

I welcome the representatives of the National Association of Early Retirement Scheme Farmers outlining their concerns regarding the scheme for early retirement from farming. I welcome Mr. Eamonn Donovan and his group, some of whom are in the public Gallery. Mr. Donovan will make a presentation followed by a question and answer session. I draw to everyone's attention the fact that while members of the committee have absolute privilege, the same privilege does not extend to witnesses appearing before the committee. Members are reminded of the long-standing parliamentary practice to the effect that members should not comment on, criticise or make charges against a person outside the House or an official, by name or in such a way as to make him or her identifiable.

Mr. Eamonn Donovan

I am accompanied by Ms Frances O'Brien, Steven Liffey and Jim Byrne. I thank the Chairman for inviting us to attend this committee meeting which gives us the opportunity to enlighten members on how the Department of Agriculture and Food has failed to meet all its obligations under the regulations that govern the scheme to some of the participants involved, in particular ERS1 transferors.

The aim of this submission is to expand on the current situation regarding the early retirement scheme and to highlight to the committee yet again issues that it comprehensively addressed in the report it published two years ago. Unfortunately, the Department of Agriculture and Food has chosen to ignore most of those findings and we view this dispassionate response to be unbelievable, as it is no longer just ERS participants who are objectively questioning the manner in which it implemented scheme 1 in particular.

We are pleased, however, that the Minister has decided to increase the rate of pension for participants but we believe this could and should have been paid out in March of last year rather than November. This again is another example of how it appears we can be short-changed at will, so we are asking the Minister to backdate this increase to March 2006. In general we are equally pleased to see the changes that have been introduced for ERS3 participants. We are asking that similar leeway should apply to ERS1 and ERS2 replacement transferees, where applicable.

The following issues are still outstanding and we believe most of them would never have arisen if the Department of Agriculture and Food had complied with all the requirements of Council Regulation (EEC) No. 2079/92, and explained the conditions of the scheme in appropriate detail. Bearing in mind the age and educational background of the majority of prospective participants, the conditions should have been explained in similar detail to what is contained in the ERS2 documentation.

The joint management and joint ownership arrangements were not explained. The joint committee report adjudicated on the inadequacies of the scheme documentation in this regard quite comprehensively and its recommendations should be implemented without further delay. If the Exchequer is required to help foot the bill, so be it.

This problem arose as a result of the unnecessarily ambiguous and contradictory conditions that were drawn up by the Department of Agriculture and Food. I refer in particular to the last two paragraphs of the terms and conditions of the scheme, which relate to a person's eligibility to become a transferor. The paragraphs in question, which prevented the majority of the participants from realising they could become the joint owners of their farms, right up to the minute they signed their contract documents, are as follows:

(1) Any applicant who is not the owner/leaseholder of the agricultural holding involved, will only be admitted to the scheme if he/she is in actual joint management of the holding with the owner/ leaseholder. Each party must undertake to cease all commercial farming definitively.

(2) Agricultural holdings owned or leased may not be divided after 30/07/92 for the purpose of enabling a third party to become eligible as a transferor or to qualify for higher payments under the scheme.

Most people hoping to join the scheme who were not the registered owners or leaseholders at the time would have believed, after reading the two paragraphs, that the ownership of the farm could not be changed after 30 July 1992 to facilitate a person wishing to join the scheme under joint ownership. They would have thought that the only alternative available to them was to join the scheme under a joint management arrangement, which was being promoted by the Department of Agriculture and Food and other interests at that time. We understand from the legal opinion we have received from a senior counsel that there is a legal obligation on the Department of Agriculture and Food to be clear and accurate in its literature when promoting a scheme. The Supreme Court decision in Campbell v. Minister for Agriculture clearly bears that out. We suggest that clarity and transparency are missing in this instance.

Regarding the offsetting of State pension benefits, etc, we believe the Department of Agriculture and Food made a simple and fundamental error when it was compiling the conditions of the scheme. It asked the Department of Social and Family Affairs to define what it considered to be a "national pension". The Department of Agriculture and Food wanted to be able to offset such pensions from the EU pensions of participants. Council Regulation No. 2079/92, which governs the scheme, specifically states that "aid is paid as appropriate in the form of an annual supplement to the normal retirement pension paid by the member state in order to arrive at the same annual total amount of 10,000 ECU as previously described". This regulation, which is very specific, does not mention anything about national pensions. We understand from the legal opinion we have received that if and when the Department offsets pensions, benefits and allowances, etc, from any EU pension other than the normal retirement pension, it will be doing so in error and in contravention of Article 3 of the regulation and its own scheme conditions. It would also probably be in breach of Article 7(1)(a) of the regulation, which states that "member states must ensure in particular a harmonious transition from the Community Early-Retirement Aid Scheme to the National Retirement Scheme".

Our understanding is that the Department of Agriculture and Food would not be fulfilling its obligations under Article 7 if it were to deduct or offset pensions benefits, etc. other than the normal retirement pension, from an individual's EU pension. Similarly, in the case of a joint management arrangement, it would be in breach of Article 7 if it were to add together all pensions benefits, etc. to which both parties are entitled prior to their being offset. Such an action would be in breach of the meaning and spirit of that provision, and repugnant to both. We ask the Department to examine all its records in this regard and pay back any money that may have been wrongfully deducted or offset. This problem could be as bad as the nursing home debacle.

The Department of Agriculture and Food may be overstating its right to demand the repayment of pension moneys. The farmers to whom these moneys had been paid accepted it in good faith for what it was. They believe that their EU pensions were freely paid to them over a considerable period of time before any questions regarding deductions arose. If anyone is to be held accountable for the questionable overpayments, it is the officials in the relevant section of the Department. The Department failed in its duty of care as the administrator of the scheme, and as an employer, if it allowed overpayments of any kind to continue over a period of years, rather than weeks or months, in many cases. The Department should admit responsibility for its mistakes and pursue the matter internally. This administrative error was made within the departmental structures, or between the relevant Departments. The participants in the scheme who are affected by this error should be exonerated from blame immediately. As the Department's early retirement section was aware of the exact age of each of the participants, it should have been aware of their eligibility or otherwise for a State pension.

The Department of Agriculture and Food's defence of its inaction or mismanagement is the participants involved should have notified it when they reached 66 years of age and applied for the old age pension. On page 15 of the guidelines, condition 13, on which the Department is basing its defence, states that "a contributory old age pension must be applied for, on reaching the age of 66 and provide evidence to this effect". Condition 13 does not state clearly what evidence should be provided, or indeed to whom it should be provided. We understand from some of the people in this predicament that the Department was in possession of the relevant piece of evidence they needed to apply for a pension — their original birth certificates. Some of them also believed they would not qualify for the old age pension because it was means tested.

I have presented some reasoned alternative facts to explain why some participants may not have felt obliged to inform the Department, or indeed would not have remembered to do so. I ask the Minister for Agriculture and Food to reply to some relevant questions about questionable overpayments. What systems were in place to record participants' evidence of notification that they had reached 66 years of age and had applied for a contributory pension? When was the method of recording such notifications introduced? How many participants notified the Department when they reached 66 years of age and then applied for the old age pension? What form did this notification take? During the period in question, how many participants would have qualified for other benefits, payments and allowances in addition to the normal retirement or contributory pension? What is the Department's estimate of the cost of what it defines as over-payments? How much of this money has been recouped by the Department? How much of it has been paid back to the Department?

The Department of Agriculture and Food should bite the bullet and accept responsibility for the administrative errors that were made in the past during the general operation of the scheme. It should accept, once and for all, that it was the only organisation with access to all the relevant information about payments of any kind. It is unbecoming of any Minister, or the Department of Agriculture and Food in general, to expect early retirement scheme participants, many of whom are of senior years and have little or no formal education, to remember to advise the Department about these matters. Such people should not be expected to second guess what a civil servant should or should not offset from their EU pensions. We thank all concerned for addressing the long-standing core issue of pension indexation and payment increases. We hope that a general increase can be introduced in stages to prevent the pension from losing its current net worth.

The joint committee's report on quotas must be addressed by the Department of Agriculture and Food, which negotiated the changes in the regulations that have cost some scheme participants substantial sums of money to date. When participants entered the scheme, they were assured in writing that they could lease out the quotas of which they were in possession for the duration of the pension period. They were told that the quotas would revert to them on completion of the scheme. This provision has been substantially diluted for milk quota holders. It has been blatantly disregarded by the Department in the cases of suckler and sheep quota holders who did not have established entitlements. The quotas were leased out from the time the participants joined the scheme until the Department arbitrarily decided to decouple all EU premium payments from 1 January 2005.

I do not suggest that the Department did not have the authority or the right to do that, but if the decision had been delayed until 1 January 2007 in respect of suckler and sheep quotas, the participants would not have lost up to 50% of their established income over the past two years. They are about to lose further substantial sums, which cannot be allowed to continue. The accepted and established provision whereby quotas could be leased out was one of the principal benefits that many participants derived from the scheme. As it was a major factor when many people decided to take up the scheme in the first instance, it has to be addressed. We ask the Minister to make some reparation payments to the participants for losses sustained, or convert the value of their quotas or premium rights into entitlements. These could then be leased out with their land, as their quotas have been in the past. This should be in keeping with the overall provisions in the mid-term reform of the Common Agricultural Policy given the exceptional and unforeseeable circumstances pertaining to ERS participants in general.

On entitlement issues, the provisions, known as the favourable arrangements, secured for ERS participants by the former Minister for Agriculture and Food, Deputy Walsh, must be protected in their entirety, particularly the section of provision 2 which provides that farmers, including offspring of farmers who retired before the reference period, who take over the holding of the retired farmer at some date in the future will be able to apply to the national reserve for payment entitlements under the single payment scheme. This provision must also allow the offspring of farmers who retired after the reference period similar access to the national reserve. The reason the provision must be retained is that it will allow participants without next-of-kin to have similar indirect access to the national reserve as those who have next-of-kin.

On the broader entitlement front, we appreciate the efforts made by departmental officials who have paid great attention to detail in allowing ERS participants activate their own entitlements. This measure and the introduction of the roll-over arrangement, which will help farmers generally to protect unused entitlements, should be of significant benefit to participants.

Any entitlements established or allotted to participants which remain unused due to circumstances outside their control must be protected within the system, at least until the current lease expires, at which stage such entitlements could be leased out with the land to a new lessee. Alternatively, an obligation could be placed on the current lessee to use these entitlements in 2007 because they may otherwise be lost to the national reserve forever.

Any entitlements established on rented land prior to participants joining the scheme should also be protected within the system at least until the present lease expires, at which time the person's next-of-kin may be in position to consolidate same. As a last resort, the provision of force majeure — exceptional circumstances — must be introduced this year to protect any unused entitlements belonging to ERS participants if no other satisfactory arrangement is introduced by the Department.

While the National Association of Early Retirement Scheme Farmers fully understands it is the transferor's responsibility to engage a suitable replacement transferee when the need arises, this may be difficult in some parts of the country due to off-farm employment, etc. We submit that the transferor's pension should be paid for whatever extended period may be required.

Given full employment, numerous farmers are finding it virtually impossible to find labour of any kind to help out on the family farm. Participants should be in a position to help out when the need demands, in particular where health and safety and animal welfare issues arise.

Deputy Naughten

I thank Mr. Donovan for his presentation. Given that it contains much to digest, I ask him to submit a hard copy to the clerk. Mr. Donovan raised a series of issues regarding the anomalies in the early retirement scheme, especially the first scheme. Although some of these were addressed by the Department in the second early retirement scheme, others were compounded in ERS 2. I hope the latter will have been addressed in ERS 3. The anomalies in the first scheme left a bad taste for potential participants in the second scheme and unless we eradicate them, it will be difficult to encourage others to participate in the next round.

I accept Mr. Donovan's point regarding joint ownership and management. Those involved in the scheme are not people in their late 20s or early 30s who have completed the green certificate or have an apprenticeship or some other form of education but people with, in many cases, limited formal education. Despite this, they must read through the rules and regulations and then try to interpret them from the point of view of the Department. The inadequacies in the information supplied dictate that participants must be given the benefit of the doubt.

I ask Mr. Donovan to elaborate on the issue of replacement transferees. I have not encountered many of these cases but sadly those I have dealt with involved significant problems. In most cases, either a transferee broke the lease for one reason or another or major problems arose with the existing transferee and the lessor could not afford to break the lease because no one else was available to take it up. The window of opportunity open to people leaves them tied to the individual. In one specific case, the lease was deemed to have a value of nil because the transferee indicated the lease would be discontinued unless the land was given for nothing. The lessor was left high and dry and sustained a substantial fall in income. This is a significant weakness in the scheme as ERS participants faced with such circumstances are left virtually powerless. In a small number of cases, people have been left in severe financial difficulty.

Will Mr. Donovan elaborate on the practice of offsetting additional benefits provided by the Department of Social and Family Affairs from EU entitlements and his point regarding national pensions? State pensions from the Garda Síochána, ESB or other State agencies are not taken into consideration for claw-back purposes. Only pensions paid by the Department of Social and Family Affairs are considered. The substantial increase in the old age pension in recent years is a positive development. However, the failure to index the ERS pension has resulted in a gradual decline in income for ERS participants over the same period once inflation is taken into account. Some participants have been left in a difficult financial position.

Mr. Donovan stated the buck stops with the Department of Agriculture and Food because it must factor in ERS participants' dates of birth, of which it has a record. The joint committee questioned officials from the Department of Social and Family Affairs on this issue. We argued that the Department of Social and Family Affairs should inform the Department of Agriculture and Food when ERS participants receive approval for an old age pension. We also noted that the lack of co-ordination between sections of the Department of Agriculture and Food or between it and the Department of Social and Family Affairs had left people with little income and astronomical bills to pay. This is immoral because the problem was not caused by participants. I am aware of an individual who, having contacted the Department of Agriculture and Food, was compelled to pay a significant claw-back through no fault of his own because neither he nor the Department kept a record of the call.

The joint committee should raise the positive proposal on force majeure with the Minister, not only on behalf of ERS participants but many others who have not activated their entitlements.

Deputy Wilkinson

I welcome Mr. Donovan and his colleagues and compliment him on the detailed presentation. It is some time since I prepared a report on behalf of the joint committee on the early retirement scheme in which I detailed a number of the scheme's anomalies. Mr. Donovan's superb presentation highlights all the anomalies to which I referred and some new ones.

The people who are affected most are the ones who are now asked to pay back substantial sums of money. Deputy Naughten stated many of those people worked extremely hard and had little or no education which meant paperwork was probably the last thing they wanted to see. However, it goes beyond that. Many accountants who handled the applications for the early retirement scheme were completely baffled. I know of cases where they refused to make applications for people.

I welcomed the concept of the early retirement scheme. It was very good despite its obvious faults. I also welcome the changes that have been made. I am sure everybody would agree with that. However, outstanding issues still need to be addressed. We heard earlier how another group has gone to Europe with a petition. We will have to wait to see what happens in that regard. The committee should go back to the Minister and the Department and put the case once more.

Only yesterday I wrote to the Minister in connection with a particular case. The individual concerned who was involved in the retirement scheme has suffered considerable hardship and is unable to repay the amount asked of her. The case has been made well here today. The committee should try to resolve the outstanding issues with the Minister. Mr. Donovan and his committee have members' full support for the views they presented. I, again, thank him for his presentation.

Chairman

I thank Deputy Wilkinson for his report on behalf of the committee.

Deputy Hoctor

Mr. Stephen Liffey is familiar with the work I have done to support the group in its genuine concerns. I also acknowledge the other members of the group, especially Mr. Donovan who worked as a rapporteur with Deputy Wilkinson in the compilation of that excellent report.

Many issues were raised by both groups but I am especially concerned about the type of cases to which Deputy Wilkinson referred that are mirrored across north Tipperary where people, unfortunately, were registered as joint managers rather than joint owners and where the pension of one of the participants affected the payment of the early retirement scheme.

I also refer to the responses received from the Department of Agriculture and Food on this matter. The officials are very swift to refer people to section 7 of the scheme. They claim the differences between the options were clearly spelled out. I do not believe the information was clear to people, including solicitors who provided advice. People subsequently discovered they could have signed up as joint owners rather than joint managers. Have efforts been made to try to redress that situation? For example, when adult qualifying allowances for payments from the Department of Social and Family Affairs are above or below the due entitlement, the Department has shown itself to be willing to redress the situation to enable a couple to benefit by means of another payment.

I have been told some solicitors were unwilling to engage with people who were on the scheme because of its complexity. What is the experience of group members in this regard? Departmental officials have given us a different story and we wish to establish the truth.

Senator Moylan

I compliment the delegates on their presentation. Given the relatively small numbers involved, I am puzzled that retired farmers in Ireland require two groups to fight their case. The first farm retirement scheme was very successful in terms of numbers. However, I could never understand why people bought into a scheme where payments were not index linked. I said that to several farmers at the time. Some of them believed it was heavily sold. For the first 12 months the pension was reasonable but after that its value dropped on a weekly basis due to inflation.

Deputy Wilkinson's point is an important one. Having listened to the views of both groups we must try again to persuade the Department of the merits of the case. In my experience, in cases of overpayment by a Department, it has sought to recoup the money from future payments. This has been the approach taken by Departments, irrespective of the type of information that had originally been given to applicants.

Agriculture would be in a sad situation now were it not for the introduction of the two retirement schemes. Young farmers would not have had a chance to get involved at the same level. They have been the ones responsible for driving agriculture forward since the introduction of the first retirement scheme in 1994. I am familiar with some successful young farmers from my own county. They would probably be in Australia or somewhere else were it not for those schemes and farming would be dying fast. The Department should recognise that. The farmers who took the decision to retire at that time did this country a great service and they were badly paid for it. I am aware of numerous examples of young farmers who took on farms when their parents retired and they had to support the family to keep the wolf from the door. What happened is regrettable because these people had leased their land in good faith but found their pensions had depreciated to such an extent that they were not able to survive. I always said there was a serious anomaly associated with those pensions and the delegates know this well because they bought into the scheme at the time in good faith. When they had their decision made, after which it was too late, they really suffered.

Some individuals who leased land claimed extra quotas pertaining to that land for themselves. In my case, I claimed a quota on land I had leased. These individuals were the losers because, if another family member came back to take over the land, having been away, he or she discovered the quota was held by someone else. There are genuine cases to be considered. I would prefer if the two organisations came together, as one unit, to fight on behalf of retired farmers. Perhaps they will explain their position in more detail. Deputy Wilkinson's point is very important.

Mr. Donovan

On Mr. Moylan's view that the two groups should amalgamate, I would rather not discuss the matter here. There are personal issues involved which are not of my making.

On the question as to why people bought into the indexation of pensions, it was never mentioned on day one that it would not be index linked. It is easy to say now why it was not. Too many are inclined to reason that it is a retirement scheme; rather, it is an EU scheme for agriculture. In any such scheme there was no indexation but an increase every two or three years. Any farmer who signed up to the scheme fully anticipated the increase in the rate of payment. The Department of Agriculture and Food and the farming bodies must take a significant portion of the blame in that they just did not see the scheme through, or its implications. They paid little heed to implementing it correctly, sensibly or justly from its commencement until now.

The early retirement scheme began in January 1994. Even in November that year, the Law Society of Ireland was circulating to its members a note to the effect that they should be in regular contact with the farm development office — the relevant authority at the time — to be aware of current practice on the scheme. This was ten months after commencement of the scheme, although everything should have been black and white and sealed and delivered from day one. The goalposts were being changed in November of the year the scheme started.

This approach seemed to constitute an incredible way to observe an EC regulation with immediate and direct effect on participants in the scheme. It is an absolute scandal that this should have arisen and we should not need to discuss it. It is just that particular administrators at the time had little or no concept of how a regulation should be treated and no interest in standing by their own conditions. Our senior counsel said the administrators were breaking their own conditions as much as the original regulation, which is incredible.

On Deputy Naughten's remarks, let me give an example of a woman who joined the scheme and became joint owner ten weeks thereafter. She and the other owner have argued their case to the Department for the past seven years but it does not want to know.

Let us consider a side issue involving money that may not be deducted rightfully, as opposed to legally. A woman who was younger than her husband joined the scheme in 1997 having discussed the issue with her solicitor and agricultural advisers. She and her husband joined under a joint management arrangement which, as far as they knew, was their only option at the time. In March 1999 the husband was awarded a reduced contributory pension, as he had not contributed thereto for the required number of years. In early 2002, some three years later, the Department informed the woman that she had been overpaid by approximately €9,000, as her husband had been paid this amount by way of his pension. It has since made the required deductions to recoup the moneys. However, over the three years, it had already made deductions of approximately €1,600 from the woman’s EU pension in various stoppages, yet there appears to be no record of these when assessing the overpayment. One must ask whether the total to be deducted would have been deducted had the Department offset her husband’s contributory pension on a monthly basis over the three years. I am assuming that the deductions concerned tax or PRSI that the Department was possibly obliged to make, given its line of thought on the matter. Had it reduced the full €10,000, or approximately €800 per month, by the amount by which it was supposed to be reduced, that is, the value of the husband’s part contributory pension, would the same amount of money have been deducted on the other side, that is, in terms of the contributions for tax or PRSI? I suggest not. This is another set of circumstances of which it has not taken cognisance. All such cases need to be re-examined forthwith. I hope it is not another example of how the older generation can be treated flippantly by an arm of the State. These are mind-boggling matters.

Mr. Liffey will address some of the issues concerning the quota and the matter of the replacement of lessees. Ms O'Brien will then make her case on the issue of joint management.

Mr. Steven Liffey

I thank the Chairman for inviting us again to outline our views. It is no harm to reiterate the problems we envisaged when we appeared before the committee two or three years ago.

The replacement of lessees can present a difficulty. In fairness to the Department, if there is no suitable lessee within the framework laid out, it is tolerant of the acceptance of a lessee who would not otherwise qualify. If the lessee is over age or does not have the full educational requirements, he or she could be accepted in certain circumstances. However, a major problem arises where a suitable lessee cannot be found. Some individuals, when they became lessees, felt they owned the land; therefore, one must be careful. If one leases land for one year, one can get rid of the lessee if one is not happy with him or her, but if the lease is long term, the lessee can get very attached to the land and feel he or she owns it. In such circumstances, the owner can be pushed to one side and find it difficult to repossess the land. People get very attached to the land and sometimes feel they own it. The owner can be pushed to one side and find it difficult to repossess it. In fairness, the Department is finding a solution in some cases, although it can be difficult.

Complications with joint ownership and joint management have caused hardship. The pension of the spouse is deducted from the farm retirement pension which the wife, probably the younger of the two, will be drawing. This should have been addressed. A man and his wife who have worked together all their lives, reared their family and worked the farm must have a greater bond if they are joint managers because under the Succession Act any court of law would regard those people as joint owners anyway. If joint management is added to the Succession Act, there must be a greater bond than there would be in joint ownership alone. I cannot see why the distinction is made and why people are penalised for being joint managers of a farm. If they were joint owners, and if the wife had no input into the farm, she could draw the farm retirement pension and her husband's old age pension would not be deducted from it. It is a ludicrous situation.

I have two letters from the Law Society to solicitors. The first was written in 1994 or 1995 and it advised all solicitors to acquaint themselves with the new farm retirement scheme. In 2001, there was a follow up letter advising solicitors not to have anything to do with advising farmers on eligibility for the scheme because of the confusion with the regulations. One regulation contradicts another. If the Law Society has a difficulty with teasing out the regulations within the scheme, how can we expect people like us, born in the 1930s, who went to school in our bare feet, received a poor primary education and never saw the inside of a secondary school, to tease this out? Those are the facts. I have the letters if anyone wants to see them.

This has caused undue hardship. I know people who got a bill for €35,000 when they were five or six years into the scheme and who had no money to pay it. Since then they have not got a payment. They get a slip of paper every month telling them their farm retirement pension is worth so much, the husband's PRSI pension is now deducted from it and the €150 left will be kept to pay the bill. They have finished the scheme and having received nothing for five years, they still owe the Department €20,000. Would that encourage someone to go for early retirement? Someone bungled the regulations and made them unclear. Someone is to blame but farmers should not have to bear the brunt of it.

There was a loss of quotas and premium rights for those who entered the scheme and many of them got a proportion of the pension because of the different implications. Even if they got the full pension, however, their property was devalued to such an extent by the removal of the quotas and premium rights from the land that it rendered the pension useless because they lost more in the devaluation of the property than they would get drawing the pension.

The chairman of the IFA national rural development committee negotiated much of the scheme initially and people felt that he was better informed on its ins and outs than those in the Department. When I was going to join the scheme, I went to the office in Liberty Square in Thurles and I spoke to Mr. Gerry O'Brien. All of the officials we spoke to guaranteed that we could lease our land, quotas and entitlements for the duration of the scheme and when we were finished, we would get our land, quotas and entitlements back. We all believed it. A few years ago we went for a single payment and in spite of us being tied up in the scheme with the Department of Agriculture and Food, and it should have known we were in it, the new scheme was agreed and introduced without taking us into consideration.

We have been dealt a severe blow. People might say that even leased land has increased in value. Purchasing land costs a lot of money but that is because of the economy, the sale of development land and the introduction of the nitrates directive. That is some help to us now — it makes our land more valuable — but it is no thanks to the early retirement scheme.

The Department of Agriculture and Food has come some of the way to meet us by giving our next of kin entitlements. When they take over the farm, they can apply to the national reserve and they have some entitlements. When we come out of retirement, if we are still able to walk, we cannot just lie down and die. We have to live too; these are our entitlements. We worked and put the quotas in place but now we get our land with no entitlements whatsoever.

We are not allowed to plant our land for forestry. If we do, we do not get the farm grant for doing so despite the fact that we never earned a penny from anything except the land over the years. We are deprived of the farm forestry grants when there is a huge need for farm forestry land at present. No one is going for it although there are people who would like to be able to plant trees on their land now. However, they are not allowed to do so.

Ms Frances O’Brien

With my husband, Mr. Pat O'Brien, I entered the early retirement scheme on 22 January 1998 under the joint management arrangement and our participation in the scheme is due to end on 21 January 2008. Our Teagasc adviser recommended the application be made in my name because I am the younger partner. Pat was awarded the contributory old age pension nine months later in September 1998. This pension was immediately offset against my early retirement pension.

We applied for the qualified adult allowance in May 1999 and this was also offset against the early retirement pension. From 4 January 2002, the old age contributory pension, plus the qualified adult allowance, exceeded that payable to me under the early retirement scheme. I have received no EU pension since that date. We have lost €104,000.66 which we would have received from the EU pension over the ten year period. We are still bound by the rules of the early retirement scheme although we are not in receipt of any EU pension and when the CAP reforms were introduced we lost the entitlements to the land.

Prior to joining the ERS we had two meetings with our Teagasc adviser who was responsible for the ERS participation in the county. His advice was that the application should be made in my name for two reasons, I was the younger and we would receive two pensions. My husband would receive the old age contributory pension and I would receive the EU pension. No mention was made of joint ownership or management. It was mostly women who, being younger, made the application under the joint management. It was the first time that farming women of my age group, born in the 1930s, received any recognition or money in their own right but sadly this was immediately taken from them.

Chairman

Are there any supplementary questions?

Senator Moylan

The point was made to me about hardship cases that if retired farmers were seen herding or doing a small bit of farm work at the time they were penalised by inspectors or the Department. Did that happen in many cases?

Mr. Donovan

It happened in a few cases, not many. We raised it with the Department and off the record it said that this happened when somebody had reported the farmer. It should be openly recognised that they do these things only for the welfare of animals. The farmer's son or daughter might be testing cattle which requires three people and might be unable to get any other help. Without that the veterinary surgeon would not come. There are many ramifications and implications in this action. The Department should recognise that retired farmers may help out on the family farm, free of charge. The farmers should not have to look over their shoulders.

Ms O’Brien

In the early stages they did. My husband was standing in the yard watching the lessee's veterinary surgeon testing the cattle and the inspector told him he should not be there.

Chairman

That is terrible for people who have retired.

Senator Moylan

It was so unreal for farmers who helped their children that they had to bring fishing rods with them in order to pretend they were going fishing not herding.

Deputy Naughten

Yes, or they had to bring a golf club.

Mr. Donovan

Somebody mentioned the offsetting of money. I spoke of the lady whose offset money might have PRSI implications but no cognisance was taken of that. In another case, which merits being aired, a person who was literate dug his heels in and was quite shocked to get the opposite result. This man joined the old scheme in December 1999 because he was in poor health, receiving disability benefit and thought the new scheme would be postponed. He was 64 and a half years of age and joined under sole ownership. He discussed all the options, as he thought, with his advisers who told him that although his wife was several years younger than him, there was no point getting her involved under joint management as he was entitled to a full contributory pension plus other payments which possibly referred to his disability benefits.

Under joint management his wife would have had to comply with all the conditions of the scheme and his State pension would probably be offset anyway. He had three discussions with his advisers and there was no mention of the possibility of joint ownership. The Department wrote and told him to apply for a pension. He replied, asking for clarification about the disability pension and the contributory pension into which he had paid for over 30 years and whether that would be offset because most of it was raised from employment other than farming. He also asked the Department to advise him within the next few months as his old age pension would be due.

Eight weeks later the Department had not answered the letter and after several telephone calls he asked his social welfare inspector to raise similar points with the Wexford office on his behalf. This inspector wrote immediately to Wexford. The letter was answered ten months later but was sent to a different inspector in another county. His pension was stopped in September 2003. He complained to the Wexford office in writing and by telephone saying that he had written to the office two and a half years previously, advising it that he was about to apply for the old age pension but apparently it did not want to know.

In the absence of a response from Wexford after six weeks he sent copies of his letters to the Ombudsman and to the appeals office in Portlaoise and notified the Wexford office accordingly. Within six weeks he received a letter from the Wexford office admitting that it was wrong and that he would not have to pay back any moneys as there had been an administrative error on its part and he had contacted it in March 2003. One wonders would the office have admitted it was wrong to a lesser mortal than this man who kept records and dug his heels in. Even the Department had to concede that it had been advised.

That is why I asked the Minister several questions on what provision there was for recording letters when people notified the Department. People who did not know any different, could very well have notified the Department on the telephone. There was no direction to write in the guideline booklet, it simply required notification.

Chairman

The clerk to the joint committee will compile a report and send it to the Minister and the officials. Is that agreed? Agreed. On behalf of the committee I thank Mr. O'Donovan and the group for making the presentation and responding to the queries raised today. Is it agreed to go into private session to discuss some housekeeping matters? Agreed. Is it agreed to suspend the meeting for two minutes to allow the witnesses withdraw? Agreed.

Mr. Donovan

I thank the Chairman for having us here today and allowing us the time to air some serious issues and concerns on behalf of retired farmers and their families. I hope that after today the committee will inspire the Minister to at last get to grips with this unnecessary mess. I also thank the committee for its appreciation of our problems, particularly Deputy Wilkinson, who produced a fair JOC report and Deputy Naughten who has kept me informed of most aspects of the ERS almost every week.

Sitting suspended at 2 p.m. and resumed in private session at 2.05 p.m. The joint committee adjourned at 2.10 p.m. until 4 p.m. on Wednesday, 28 February 2007.