Joint Committee on Agriculture, Food and the Marine debate -
Tuesday, 8 Oct 2013

Scrutiny of EU Legislative Proposals

Chairman

The purpose of the meeting is to engage in further scrutiny of EU legislative proposals. I welcome Mr. David Lynch, Mr. Tom Loftus, Mr. Donal Coleman and Ms Hazel Sheridan from the Department of Agriculture, Food and the Marine. I thank them for appearing before us to assist the committee in its scrutiny of the proposals before it and, in particular, to explain the detail and consequences of the draft legislation. I remind them that they are protected by absolute privilege in respect of their evidence to the committee. However, if they are directed by it to cease giving evidence on a particular matter and continue to do so, they are entitled thereafter only to qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given and asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against a person or an entity by name or in such a way as to make him, her or it identifiable. Members are reminded of the long-standing parliamentary practice to the effect that they 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.

There are four proposals to be considered: COM (2013) 260 on animal health law; COM (2013) 262 on plant reproductive material; COM (2013) 265 on official controls; and COM (2013) 267 on plant health law. These adopted measures are to strengthen the enforcement of health and safety standards in the agrifood chain. Mr. Lynch and Mr. Loftus will address COM (2013) 265 first.

Mr. David Lynch

I will introduce my team. Ms Hazel Sheridan, superintending veterinary inspector, will speak on the animal health regulation. Mr. Tom Loftus is a principal officer in the meat hygiene division and will address the fees element of my presentation. Mr. Donal Coleman is a senior inspector of plant reproductive material. We do not have one official with us that perhaps we should have to speak on plant health law, but he was called away to a meeting in Vilnius. He will be available if the committee feels the need to speak to him. I am a senior veterinarian and my main area of responsibility is food safety in the veterinary area. I will address the proposal on official controls. We will all say a few words and then take questions.

I thank the Chairman for inviting us. The Department of Agriculture, Food and the Marine is happy to have this opportunity to discuss these proposals with the committee to ensure the application of food and feed law, rules on animal health, plant health, plant reproductive material and plant protection products. As indicated in the information note provided for the committee, Ireland welcomes the broad thrust of the draft proposal on officials controls, subject to consideration of the detail of each article which is taking place in Brussels. On 6 May, after much internal discussion, the Commission adopted a series of proposals which have been called, A New Package for Healthier Animals and Plants for a Safer Food Chain, a racy title. The package consists of four proposals on rules for specific sectors and official controls in these sectors and also a fifth relating to the management of expenditure in these sectors, which is separate. The four proposals are on plant health law; rules on seeds and propagating plants; animal health law; and rules on official controls that will apply in each area. All four are being debated in Council working groups and will in the near future also be debated in committees of the European Parliament. I understand the proposals on plant health law, animal health and welfare and plant propagation products will be discussed by the agriculture committee, while the proposal on official controls will go to the environment committee.

I will comment on the proposal relating to the rules on official controls. Regulation 882/2004 on official controls is in place and performs to ensure compliance by operators with food and feed rules, animal health and animal welfare. If agreed, this proposal will replace that regulation. The regulation will be addressed to competent authorities. Essentially, it is designed to tell us how we perform our duties and will lay down rules for how these authorities must implement official controls and perform other official activities relating to operators, including farmers, food companies, feed companies, restaurants, caterers, retailers etc. The competent authorities affected by this proposal will be the Department, the Sea-Fisheries Protection Authority in the context of fisheries, the Health Service Executive in the context of restaurants and retail establishments and the Food Safety Authority of Ireland.

Under the proposal, the competent authority must have sufficient resources; officers must be properly trained and controls must operate according to documented procedures, be risk-based, as much as possible, be unannounced and carried out in an efficient manner without creating undue difficulty or putting undue expense on the operators. A report must be generated after every control and a copy given to the operator in order that he or she will know the outcome of the inspection or audit. Operators must be given an opportunity to appeal the outcome of a control and annual reports must be produced on the activities carried out.

This proposal will differ slightly from the existing regulation in so far as it will have a broader scope. It will cover plant health law and plant reproductive material, which the existing regulation does not, and will concern the new rules for these areas when they are agreed. In addition, the new regulation will apply to the new rules on animal health when they are agreed. Ms Sheridan will comment on these. This will include rules relating to residues of veterinary medicines.

It will apply common rules to all animals and goods of animal and plant origin entering and leaving the EU. Implementation will be carried out in border control posts, which is slightly different to the current system. The regulation will apply "Lisbonisation" rules by allowing for the introduction of implementing rules and delegated rules and the conversion of some existing regulations into implementing acts or delegated acts, as appropriate. It will commit to the development of integrated information management systems across the community. The regulation will require that the carrying out of official controls be self-financing through the collection of fees. There will be exceptions for micro-industries - namely, those employing less than ten people and with an annual turnover of less than €2 million - and certain rules in other sectors, such as organic products. My colleague will address the matter of fees.

There will be tougher penalties for non-compliance, which in general must be effective, proportionate and dissuasive. Where intentional violations of the provisions of the regulation are discovered, financial penalties must at least offset the economic advantage sought by the operator through the violation. This is an attempt to address food fraud.

The proposal was developed by the Commission through a series of working group meetings with experts from member states during the course of 2012. In the early part of 2013, all of the internal discussions took place within the Commission's services. They were quite protracted. It was not until 6 May of this year that the proposal was published. That left very little time for the Irish Presidency to make any progress on it. On 7 and 8 May, the days following publication, a two-day seminar was held in Brussels under the auspices of the Irish Presidency and COPA-COGECA, the umbrella body for industry stakeholders, to discuss the proposals. We had one meeting of a Council working group during the Irish Presidency, which I chaired. Two subsequent meetings were held during the summer and in September. Two further meetings will take place during the Lithuanian Presidency and then we will have to see how we get on when the Greek Presidency begins.

The Department of Agriculture, Food and the Marine is representing Ireland at these meetings. I generally speak at the meetings. We work in consultation with the Department of Health and the Food Safety Authority of Ireland. We have pre-meetings with both agencies. In addition, there was a period of public consultation and we received a number of submissions from stakeholders. The public consultation period ended on 27 September and we received four submissions on the proposal. The proposal is a long one. There are 162 articles and to date we have only reached Article 24. Progress is difficult because of the widened scope of the regulation and there are many stakeholders even among the competent authorities that are affected by it. Discussions are slow and it will be some years before finality is reached. That is as far as we have got. If I may, I will hand over to my colleague who will discuss fees.

Mr. Tom Loftus

Thank you, Chairman. The opportunity to discuss the European Commission proposals relating to official controls along the agrifood chain, and particularly the proposals relating to fees for such controls, is welcome. I will cover the current cost recovery regime, proposals for change, and the Department's current position on the proposals.

Current EU rules under Regulation (EC) No. 882/2004 require charging of mandatory inspection fees only for a limited range of official control activities; principally, controls in the meat and milk sectors and controls at borders. Historically, these were the areas in which methods of control by various member states were first harmonised at EU level. External research, carried out in 2009 for the EU, concluded that the overall objective of ensuring that adequate financial resources are provided to perform official controls is not being met throughout the EU. It also pointed out the unfairness of a system to which only certain sectors contribute and which does not discriminate effectively between compliant and non-compliant behaviour. A further study in 2011 highlighted the difficulty in quantifying overall control costs, and a diverse spread in cost recovery between member states.

The Commission proposal is designed to ensure full cost recovery by extending mandatory fees to cover all controls performed on businesses operating under food and feed hygiene regulations, as well as operators defined in plant health and plant reproductive material, PRM, law. Microenterprises would be exempt in order to fulfil a commitment to lower the burden on very small businesses.

The rationale behind the Commission proposal is as follows: to generate a reliable flow of funding to maintain controls at a level justified by the risks; to ensure that business activities that benefit from efficient controls participate in financing them; to minimise dependency on funding from public finances; and to prevent discriminatory treatment between operators located in a member state where the user-pays rule applies and those located in a member state where that is not the case. It is proposed that fees may either be calculated at a flat rate, on the basis of the overall costs being spread across all operators in a particular category, or on the basis of direct application of the actual costs of each individual official control.

The two main areas where cost is recovered in Ireland at present are the meat and milk sectors. The amount recovered from the milk sector, through a levy of 0.1 cent per litre of processed milk, was €5.2 million in 2012. These receipts are sufficient to fully recover the cost of the Department's food safety inspection service in the sector. Fees paid in the meat sector are mainly based on the level of throughput - for example, unit fees for animals slaughtered, ranging from €5 for cattle to €0.01 for small poultry. The amount recovered by the Department from the meat sector in 2012 was €15.2 million. There has been a significant change in the Department's meat inspection service in recent years, both in how the service is delivered and in the associated costs. The cost of the service has been reduced from €41.9 million in 2008 to €29.5 million in 2012. Cost recovery consequently increased from 35% to 52% over the same period.

As indicated in the information note for the committee, Ireland welcomes the broad thrust of the draft proposal, subject to consideration of the detail of each proposal, which is now under way. Ireland welcomes the focus on improving the link between fees and compliance but, in common with other member states, has some concerns about the proposals relating to the introduction of new fee arrangements. Specific concerns of the Department relate to the proposed extension of full mandatory fee collection within the food and feed sectors and on to the plant sectors; the prescriptive nature of the proposed new collection system - flexibility should be provided to retain existing systems, which work well, have industry acceptance and can deliver equivalent results; the consequence of a diverse spread of cost recovery between member states persisting under the new regime, which will be that industries in member states which most thoroughly implement the new regulation will be at a competitive disadvantage; and the difficulty of achieving full cost recovery across the board, which, for practical reasons, might be better phased in over a period of years.

In addition to detailed discussions now under way in Brussels, the Department is liaising with the FSAI and the Department of Health on this matter and is also engaging with industry representatives. It is to be expected that the Department's and Ireland's position will evolve as discussions progress.

Chairman

Are members happy for us to take the other two general statements? If members are agreed then I will invite Mr. Coleman to address COM (2013)262.

Mr. Donal Coleman

My remit is to deal specifically with the crop and plant spectrum of the proposal, including not only agricultural crops but also horticulture crops, ornamentals, fruit and other species. We are seeking to consolidate existing legislation in the area, particularly in terms of the technical aspect of the work. At the moment the relevant areas are covered by 12 specific directives.

The current proposal aims to consolidate these into one overarching Council regulation with enabling provisions. It should fit in very much with the terms of the overall package on healthier animals and plants in a safer food chain. The Commission is aiming for a certain amount of coherence in what it does rather than fundamental change. It is a more evolutionary process in the plant area.

I will go through the technical changes, or substantive changes, that are being proposed in the plants area. A register of professional operators, largely processors and propagators, is to be put in place. To avoid duplication or excessive bureaucracy, it will be the same register my colleagues will use for plant health matters in respect of traceability. We will have a one-stop-shop in terms of the registration of professional processors.

I am very conscious that small growers, private growers and those who exchange materials, including amateur gardeners, will not be excessively controlled in that they will not be required to register material. They will be able to buy, sell, trade and exchange material very much as they can at present. There is a specific feeling that we should not be overly bureaucratic or regulatory in that manner.

Forestry is coming under the broad remit for the first time. There will be no specific or fundamental change to the forestry regulations. Forestry will be covered under plant reproductive material purely because, as with other plants, materials in this sector are the first part of the chain, be it for food or industrial production. There is coherence in the approach.

It is proposed that there should be a lesser burden on professional operators such as processors and assemblers by making it possible to devolve certain activities and tasks, currently being carried out largely by the Department and regulatory bodies, if the industry wants this under the supervision of the competent authority. It would allow a little more flexibility and efficiency within the industry, if the industry so requires it.

We want to enhance availability and promote biodiversity in terms of so-called niche or local small-scale production. I refer to small-scale locally adapted varieties. I refer to heterogeneous material, which is another term for local populations of plants adapted to local use. We want conservation varieties to be marketed with a very low level of interference or control so there will be a balance between the overall approach to control of commercial production and the allowance of local small-scale production.

There will be a new EU register of new varieties. This is more a technical development than a substantive one. We will allow for the sustained testing of new varieties. The ministry currently tests for value for cultivation and use. I refer to largely commercial evaluation of new crop varieties. The new regulation will also provide for widening the scope of evaluation to take into account sustainability factors, such as pest resistance and ability to thrive in low-input systems, such that a more comprehensive range of material can be offered by us, certainly in the coming environment.

With regard to specific provisions, the Community Plant Variety Office has a limited range of functions in this area. They mainly concern plant breeders’ rights. The scope of its work will now be extended to provide some supports, training and administration in this area to member state authorities.

I will not deal specifically with the mandatory fees and controls, which comprise a horizontal issue across all the four areas. Progress on the regulation is very much analogous to the position outlined by my colleagues. Bearing in mind the Irish Presidency's open discussion on it, it will take a long time, or some years, before the overarching regulation and detailed implementing rules are all agreed. The European Parliament agriculture committee has had at least two short views of the regulation and is beginning to prepare its response.

Chairman

I invite Ms Hazel Sheridan to address COM (2013) 260, a proposal for an animal health regulation.

Ms Hazel Sheridan

I will read a short statement to deal with the background and core components of the regulation and the timescale envisaged.

The text in relation to the proposed animal health regulation was first presented to the European Council in May of this year. The background and aims of the proposal are described in the earlier information note for the committee. The proposed animal health regulation, when it comes into force, will be the main legislative instrument implementing the goals and objectives of the EU animal health strategy. The regulation will not be implemented for three years after the date of its adoption. It is envisaged that it will take two years to work its way through the various committees. We are now in year one of that process. The period of three years after the regulation is published is to allow the Commission time to draw up and agree the many delegated and implementing Acts mentioned in the regulation.

The regulation seeks to consolidate and simplify existing rules by creating a single regulatory framework that will replace more than 40 existing directives and regulations. As well as taking account of existing rules, the regulation seeks to provide for the future and for differences between member states by laying down a set of general principles for the prevention and control of animal diseases. These general principles will be fleshed out in a series of delegated and implementing Acts. In the words of the European Commission, the regulation represents evolution, not revolution.

The regulation will apply not just to production animals; it will also apply to fish, wild animals and pet animals. The regulation contains increased emphasis on prevention rather than cure, which is consistent with the overall vision of the EU animal health strategy. Prevention measures focus on increased bio-security at farms during transport and at the borders of the European Union; enhanced surveillance; requirements for disease notification and reporting; and a clearer policy on the use of vaccines and other veterinary medicinal products for disease control and prevention.

The regulation focuses on preparedness, laying down requirements in relation to contingency planning, simulation exercises and prescribed disease-eradication programmes. The regulation contains a suite of emergency measures that can be implemented at member state or EU level when the need arises. It provides for an enhanced response to emerging diseases, beginning with surveillance and contingency planning, and disease control measures in the event of the outbreak of an emerging disease.

The regulation uses a risk-based approach to deal with animal diseases. At the centre of the regulation will be a list of diseases of EU significance. The list is currently being drawn up by the Commission as part of a joint exercise with the OIE, the international body for animal health in the context of the WTO arrangement. This list will be contained in an implementing Act. The regulation provides for a hierarchy of control measures and each disease will be attached to one or more sets of control measures, depending on its significance within the Union.

At the core of the regulation is the principle that primary responsibility for animal health lies with animal owners and industry. In that context, the regulation lays down responsibilities not just for competent authorities but also for operators, animal professionals, pet keepers, veterinarians and aquatic animal health professionals.

The regulation is designed to facilitate trade by providing for enhanced convergence with international standards, principally those laid down in the OIE code. This convergence extends to terrestrial animals the use of compartments, a concept that has been used in the fish and poultry sectors to facilitate the continuation of trade during outbreaks of an exotic disease, most recently avian influenza.

The regulation is part of a package and, as such, it is very closely allied to the proposed official controls regulation in that the latter will require the competent authority - in this case, staff - to carry out official controls on all operators to ensure compliance with the provisions of the animal health regulation. In addition, the official controls regulation will regulate activities that fall under the definition of other official activities carried out by the Department, as provided for in the animal health regulation.

The first reading of the draft animal health regulation began with a meeting held in June under the Irish Presidency and has continued with two further meetings, one held in July and one held in September.

Three further meetings are planned for this year, in October, November and December, by which time it is expected the first read-through of the legislation will have been completed. Once the first read-through has been completed, it is expected the Presidency and the Council will produce a revised text incorporating the comments of member states.

A number of member states have expressed concern about the number of delegated and implementing Acts mentioned in the regulation, commenting that it is very difficult to assess the implications of the legislation without knowing what will be included in the delegated and implementing Acts. In response, the Commission has suggested that drafting the delegated and implementing Acts ahead of agreeing the general principles is to put the cart before the horse. However, it has agreed to produce a draft of the implementing Acts that will list the diseases considered to be of EU significance and decide what control measures will apply to each disease. It intends to present this document to the chief veterinary officers before year end. In the context of the delegated and implementing Acts, Ireland has commented on the need to provide for flexibility at member state level with regard to certain provisions.

In summary, we are in the very early stages of the process. The regulation will have to be adopted by co-decision procedure and, as I said, the timeframe for adoption is two years, followed by three further years of delay to give the Commission time to draw up the various implementing and delegated regulations.

Chairman

I thank Ms Sheridan. It is obvious that this is a complex area, which is why we asked for clarification. If the delegates have clarified anything, it is that this process is only in the early stages, that opinion on it is diverse and that it will be some time before it is actually agreed by way of co-decision. Ms Sheridan used the phrase "co-decision" which definitely means it will take a while. In essence, what we are trying to do is condense a lot of existing legislation into four regulations. Condensing 70 into four is going to take some time. I wish the witnesses well in that regard.

Flexibility is the order of the day. I intend to ask some questions at the end but will open the floor to committee members now.

Deputy Martin Ferris

I thank the four delegates for their presentations. The principle of intent would be shared by most people, but the questions of implementation and unforeseen consequences must be examined closely. The big concern of farming bodies is unannounced compulsory farm inspections. That is causing a lot of problems. Is this written in stone?

Another issue of concern is the standards applied to imports into the European Union, as distinct from what is produced within the Union. Will the same standards apply across the board and will they be enforced? There is also a worry about the consequences of the new regulations in terms of costs. How will the regulations affect producers, in particular? Is there any compensation mechanism to help them to overcome additional costs incurred?

If inspections allow for replacement animals or slaughter, will the compensation payments be based on the full market value? If crops and plants are destroyed during the course of an inspection, for example, will compensation be paid? The delegates said the Government had argued for flexibility. Can I take it that such flexibility relates to implementation? What degree of flexibility is the Government seeking?

Deputy Thomas Pringle

My main concern relates to cost recovery and what this will actually mean for farmers. I see that, in the context of meat inspections, only 52% of the cost is recovered currently. Is it intended that cost recovery will extend down onto farms rather than meat factories, as is the current position? Could a farm be described as a micro-enterprise and be exempt from inspection?

Senator Pat O'Neill

As the Chairman said, this is a complex issue. Ms Sheridan has said it will be another two years before this is finalised and a further three years before it is implemented. Do the delegates believe this is too long? If the regulation is brought back here in five years, there will be a new Government in office, as well as a new Seanad. The delegates will, in all likelihood, be dealing with totally different people.

Mr. Loftus dealt with the issue of costs and said the milk industry gave €5.2 million. The cattle industry gave €5 per head, while the poultry industry gave 1 cent per head of small poultry. In other words, farmers are paying for this. On the other hand, micro-businesses or SMEs employing fewer than ten people with a turnover of less than €2 million do not have to pay. Who is paying their costs? Are these costs being met by farmers, too?

Had the regulations already been in place, what difference would they have made to plant controls, particularly in the context of ash dieback? Will Mr. Coleman outline whether they would have made any difference in that regard?

Ms Sheridan has said the rules relating to animal health and welfare, when agreed, will include rules relating to the residue from veterinary medicines. What changes will we have to make in Ireland in that regard? Do the 27 countries of the European Union all have different rules on residues from veterinary medicines? It was stated the regulations would apply common rules to all animals and goods of animal and plant origin entering and leaving the European Union. What changes will be required in the context of live exports?

Senator Susan O'Keeffe

I apologise for not being here for the entire presentation. Ms Sheridan has referred to the fact that the regulations will not just apply to production animals but also to fish, wild animals and pets. I am confused about how we can have regulations for wild animals. Whose responsibility are wild animals? Ms Sheridan went on to say that at the core of the regulations was the principle that the primary responsibility for animal health lay with animal owners and industry. As a complete non-specialist and not having spent the time studying this issue that the delegates have spent studying it, I ask them to clarify something for me. It seems to me as if there will be a whole set of regulations that will force farmers to become more aware of health and safety in terms of produce at farm gate level. That will obviously involve additional costs. I am sure there is not a farmer in the country who would not wish to have a healthier product, but this seems heavy handed to the extent that responsibility is being laid, disproportionately, at the door of farmers.

A significant amount of training and information would need to be given to farmers to get them to a point where they would be able to keep to these requirements. While the reliance on technology might be positive, it could also lead to another set of challenges and dilemmas, as was seen with the difficulties with the mapping system. Just because one has technology does not mean one has solved the problem.

Deputy Michael McNamara

On COM (2013) 262, on the production of and making available on the market of plant reproductive material, I understand there is an obligation on member states to maintain a database of all native floral species. Will this regulation change this? How is the database funded and maintained in Ireland?

Chairman

In Germany and the Netherlands there is a mandatory programme to reduce antibiotics in animal food production, particularly in dairying and beef production. Will this have implications for these regulations at EU level?

In the past in south Leinster and Munster we had several claims that the health of a herd on a farm was affected by a nearby industry but nothing was ever proved. What can the Department do in such cases? Is there provision for it to investigate such cases further?

Mr. Coleman has stated there will be a threshold to accommodate small operations under COM (2013) 262. There are concerns about the level at which that will be set. Will it apply to a company with ten employees and a €2 million turnover? How will this affect the traditional seed producers who trade on a small scale?

Mr. David Lynch

Each of these proposals is an overarching regulation, designed to lay down principles but not to go into detail on what is to happen. The articles often contain phrases such as “the Commission shall be empowered to introduce delegated or implementing Acts”. That is where the detail will be described. To some extent, we do not quite know exactly how these details will work out. We are agreeing on how the principles will be included in new legislation. We have a long way to go with 28 member states involved. Progress is, accordingly, quite slow.

The area of veterinary medicines is governed by a directive. To comply with the Lisbon treaty, it is necessary to bring all of these rules into a delegated Act. There will be no significant change, just allowing the member states and the Commission to clarify or simplify the rules on it. Again, we will have to wait to see what the details of these proposals will be.

We have a two-tiered control regime in the importation of products of animal origin and plant origin. The Commission is proposing to standardise these rules. There will be a new entry point into the Community called a border control post. Again, the detail of the controls that will be put in place will be fleshed out in the coming years. There are concerns in the Community about the importation of plant products because of recent outbreaks of illness from imported bean sprouts in Germany and frozen fruits causing hepatitis. To some extent, the big food safety scares are outside the meat area. Again, we will have to look at the details as they are worked out.

Ms Hazel Sheridan

On compulsory farm inspections, within the remit of the official controls regulation, there will be a responsibility on us as the competent authority to carry out checks to ensure compliance with the regulation. The animal health regulation lays down the rules on the identification of animals and so forth. Farmers are used to having these inspections and this will continue to be provided for under the official controls regulation.

One of the new provisions in the animal health regulation is the requirement for animal health visits, which is causing concern among some member states. The visit will involve a veterinarian advising a farmer on biosecurity and how to protect his or her animals from disease. Most of the livestock farms in this country already have regular inspections by veterinarians for welfare, TB testing and other matters. It is not envisaged that these animal health visits will be something extra on top of existing visits. It will just be an expansion of existing visits to cover the important aspects of biosecurity and disease prevention and control.

As I stated, the focus of this regulation is that prevention is better than cure. It is more cost effective to stop a disease coming in rather than dealing with it once it is here. It is about getting farmers to be more aware of what they need to do to protect their herds and flocks. Most professional farmers would be very clear on the need for this already.

This relates to Senator O'Keeffe's point that it sounds like a heavy burden. It is not a heavy burden. It is formalising what already exists because most professional farmers will understand that to buy in animals from unregulated sources is a substantial risk in terms of disease transmission. It is accepted in the regulation that professional farmers know this. There is a requirement for training but it is accepted that farmers who have been farming for generations have that knowledge and it is not envisaged that there would be something extra imposed on them. It is saying that there is a responsibility on operators to understand how disease is transmitted and how they can protect their herds and flocks from it. The regulation attempts to do that.

In terms of the same standards applying within the EU and to products coming into the EU, the animal health regulation lays down rules on imports of live animals and products of animal origin, which can also transmit animal diseases. The principle is that products or animals coming in will have to meet EU standards. Those rules are built on four pillars: the listing of countries; the listing and approval of establishments; laying down animal health requirements that animals or products will have to meet; and the requirement for certificates to accompany imports of animals and products. The final component will be official checks that would be carried out at border inspection posts of the EU.

Deputy Martin Ferris asked about compensation. None of the regulations we are dealing with today deal with financial compensation, which is dealt with solely under the financial regulation. There is a fundamental linkage between animal health regulation and financial regulation in that there will be a veterinary fund to provide for the control and prevention of the diseases listed in the animal health regulation. The financial regulation is the same as the rest of the regulations and its details are still being worked out.

Senator O'Neill asked whether the five-year timescale is too long. It seems a long timescale. On the plant health regulation the Commission is adopting a slightly different approach where it is doing the general principles and the delegated and implementing acts in parallel. That is a huge workload and the Commission has only a certain number of staff working on these. It is logical to first agree the principles and then examine the details. It is such a very large task, for example in animal health alone it is 40 directives and regulations, bringing in all the requirements, having discussions and agreeing them. It would be hard to get that done in less than five years.

On the animal health regulation provisions as they relate to veterinary medicines and other veterinary medicinal products, it does not relate to residues. The provisions in the regulation relate to the use of these products for disease prevention and control. For example, every time there is an outbreak of foot and mouth disease in the UK there is a discussion on whether emergency vaccination should be used to control the disease rather than slaughtering herds. The regulation is providing in a very general principle sense for the use of emergency vaccination or antibiotics.

Animal health regulation has no involvement in the regulation of animal remedies. That is a separate regulation which is not part of this package. The same applies to animal welfare, which is dealt with in a separate legislation and is not part of this package. The animal health regulation is about the control of animal diseases only.

Senator O'Keeffe asked a good question about the application to pet and wild animals. It regulates for this in the context of controlling diseases of EU significance. We had a recent outbreak of bluetongue disease on the European Continent, which is transmitted by a vector, a biting insect. The suite of controls for bluetongue includes measures such as using products to try to kill off the vectors. The regulation provides for these controls. It is not trying to suddenly legislate for all the diseases in pet animals, but provides a mechanism to deal with pet animals which are involved in a disease being transmitted to farm animal or to humans. That is related to my initial statement that this is preparing for the future. It is setting down a set of principles that, hopefully, will last the community for ten to 30 years and deal with all possible future eventualities.

I have dealt with the responsibility of farmers. It is not envisaged that this is anything new. We understand how technology can be a challenge, particularly for small farmers. At the same time at the heart of this regulation is a need for rapid transfer of information on where animal diseases are. The only way to do that is through electronic means. It is at a very early stage. There is mention of the transfer of information but the details are very broad. Only in the next five years, when we see how those broad principles are translated into detailed rules, will we be able to work out the implications for individual operators.

The Chairman raised mandatory reduction in antibiotic usage. None of the regulations under this deals with that issue. It is dealt with under the animal remedies regulations. On high profile cases where there have been incidents relating to herd health, the focus of this regulation is on transmissible diseases, caused by viruses, bacteria or whatever, that are of international significance. Its focus is primarily on transmissible diseases. It provides emergency measures for other types of hazards for animal health in a general context, so there are some general rules.

Deputy Martin Ferris

Do the standards applied to imports in the regulations include traceability outside the EU as well as environmental controls in jurisdictions outside the EU? I refer to the conditions in which animals imported into the EU are held outside the EU, the environmental situation prevailing and traceability. Many of the problems we have had here relate to the fact that while we might have herd traceability we do not have individual traceability, which we would have within the EU. Are those regulations and measures applicable in similar circumstances outside the EU as they are within the EU?

Mr. David Lynch

The general principle under which the Commissioner operates is that anything imported into the EU should meet equivalent standards to those that exist within the EU.

Deputy Martin Ferris

It is not quite the same thing.

Mr. David Lynch

It is not quite the same thing.

Deputy Martin Ferris

It is not the case.

Mr. David Lynch

We rely on the Commission to carry out inspections in third countries outside the EU. It carries out inspections on both food and live animals. Few live animals are imported into the EU. The inspections relate mainly to food producers. The Commission tries to arrive at the conclusion that equivalent standards apply. It has taken action against countries where it felt those standards did not apply. A good effort is made to try to ensure there is a level playing field for operators in the EU regarding competition from third countries.

Deputy Ferris asked whether farmers are considered micro-enterprises in the context of the official controls. They are, because micro-enterprises are defined as employing fewer than ten people and having a turnover of less than €2 million. Perhaps huge feed lots might be different, but in most cases farmers will be exempt from the fees structure.

I will hand over to my colleague to answer the other questions about fees.

Chairman

Mr. Lynch mentioned a general tightening of standards on animals, and we all know why. Do equivalent standards apply to plants? Perhaps the focus has moved a little. We had high-profile cases with regard to South American beef and now a minimum standard is needed for a period of time. Polo ponies are major live imports and standards of application apply with regard to slaughter as do various disease controls. Deputy Ferris's question was whether we are satisfied an equivalent standard is demanded. Mr. Lynch referenced the fact some fruit and berries have caused problems recently.

Mr. David Lynch

I take it Deputy Ferris was thinking more about some of the standards with which the IFA was unhappy which might apply in certain South American countries which supply beef to the community, or south-east Asian countries supplying poultry meat.

Deputy Martin Ferris

Nobody here or involved in production would have any issue if we had equivalence across the board, but we do not. It is all very well to have very progressive regulations on animal health and safety and produce within the EU, but the difficultly is that ingredients come from outside which do not have the stringent traceability or environmental controls. I do not believe the EU regulations are even examining this. I might be wrong and I hope I am.

Mr. David Lynch

The Food and Veterinary Office, which is an arm of the Commission, is headquartered in Grange, County Meath. Approximately two thirds of its inspections now take place outside the community. Its personnel spend a certain amount of time in each member state, and they are in Ireland at present and we must meet them tomorrow on a particular issue, but they also carry out a huge number of missions in those countries which want to send their produce into the community. Its remit is to be satisfied there are equivalent standards, not necessarily the same word for word but at least equivalent so people in the community are not put at risk by products coming in. Much effort is put into trying to ensure this is the case. People will argue whether it is or not.

Deputy Martin Ferris

Was this not the case prior to the IFA highlighting the Argentinian beef scandal? Inspections were taking place but it took the IFA to expose it.

Chairman

Regulations have significantly tightened.

Mr. David Lynch

There has been significant-----

Chairman

There is a concern about health issues in the general public arising from some products, and not only animal products but also plant and fruit products.

Mr. David Lynch

This is an issue with regard to produce from within and outside the community. Some of the frozen berries were produced in the community as well as coming from countries outside the community. There is now an awareness with regard to fruit and vegetables which are traded significantly and we must be careful with regard to standards, for example the quality of water used. Many of the regulations previously written with foods of animal origin in mind are being adapted for other food sources.

Mr. Tom Loftus

Deputies Ferris and Pringle and Senator O'Neill asked about costs and cost recovery. As has been stated, even though the relevant articles have not been discussed in detail our expectation is the micro-enterprise exemption will apply to the vast bulk of farmers in this country. With regard to the implications for cost recovery, because we already have 100% cost recovery with regard to the milk processing sector there will be no net impact. This is not to say the way in which the charge is applied will not cause a change, but there will be no net overall impact. With regard to meat processing, which is our biggest single contributor paying 52% of costs and amounting to €15.2 million out of the €29.5 million cost, full cost recovery would lead to an implication of approximately €14 million additional cost recovery. This is a big issue to be considered as we go through the process.

Senator O'Neill asked specifically about whether costs are passed back because at present the costs are charged to the processing sectors. It is not a matter for the Department as to whether they are, but reputedly it is the case in some instances, particularly in the meat sector, that costs are passed back to farmers.

The general point to make on costs and cost recovery, which is one of the bigger issues to be considered, is that these are early days and we and other member states have significant reservations about what is being proposed. It will be subject to much discussion and many issues must be worked out. A key issue will be what official activities and controls are chargeable and how these charges will be applied. All of this remains to be worked out.

Mr. Donal Coleman

With regard to Deputy Ferris's question on standards, it is not just animals which pose a threat as plants also do. The plant propagation material legislation expressly provides for exact equivalence, in other words that EU standards on quality, disease, freedom and plant material would be exactly the same for any third country as for EU countries. Imports must be analogous. The Food and Veterinary Office in Grange will be the competent authority to decide where a third country wants to have a commercial arrangement with the EU with regard to plants, and it will carry out some of the external audits and controls. As Ms Sheridan stated earlier with regard to compensation for outbreaks of diseases in plants, it is covered by a different regulation and the person who deals with it is not here today. The Chairman may invite our colleague in this area to come before the committee on another occasion to deal with it. This ties into the question from Senator O'Neill on ash dieback disease, or chalara, which is a related area. I do not work in the area of plant health but the register kept by my section and that kept by the section dealing with plant health are integrated, which enhances our ability to react to an issue.

With regard to producer costs, plant reproduction is a slightly different area and is not normally covered by unannounced farm inspections. The primary cost is with regard to controlling seed assembly, seed houses and plant reproductive garden centres. This is where the cost element is.

To confirm the plant reproductive aspect for Deputy Pringle, it is not anticipated within that regulation that farmers and other seed producers would be regarded as microenterprises but would rather be regarded as farmer growers of seed. That is clear enough.

Deputy McNamara asked about our obligations concerning the database of species and its cost. There is a national obligation to maintain the national catalogue of agricultural species of plants and the vegetable species of plants, and that will not change. The cost of that catalogue is currently borne by the State. While it is early days in terms of the new regulation, the element of cost that might or might not be incurred by commercial applicants would be at a very low level. It is anticipated for those producing - let us say - small-scale local indigenous material that there would not be any charge if they wished to bring forward a new variety and register it, or in some cases there might be an extremely low charge. Certainly, the cost of regulation would be extremely low as well. While these are early days, this is not anticipated to be an issue of concern.

Chairman

I had a question about the register.

Mr. Donal Coleman

Leaving aside microenterprises, the Chairman was concerned about potential difficulties for small-scale local producers - for example, in regard to small-scale production of local varieties of potato. From our perspective the control level will be minimal, and in no sense do we feel it would exceed the levels and requirements we have at the moment for the production of seed. While there would be some low-level controls, I hasten to add that our approach is very specifically two-pronged. First, it would be to give just enough information to protect the consumer at all times, so consumers would know what they were getting, which would strike a balance. Second, we want to ensure traceability in such a way that we, as the competent authority, are not heavily involved. There should be enough requirement for the grower to be able to show what they are producing, whether it is part of a chain and where the product came from, in the unlikely event of a health or phytosanitary problem. Those are the areas and that is the balance.

Deputy Thomas Pringle

Mr. Loftus said there was a lot of debate about what costs would be chargeable under the regulation. What is the Department's view with regard to, for example, the costs within the Department of administering the scheme? I would imagine these are not currently chargeable. Is it the view of the Department that they should be and is that the view among other member states? What stance will the Department take?

Mr. Tom Loftus

This has yet to be discussed in detail. Article 78 of the regulation would provide for fees to recover costs, including salaries of staff and support staff. Essentially, the answer is "Yes". The Deputy is correct to suggest that a lot of the detail remains to be worked out. At present we tend to recover the costs of the people engaged directly in the official controls. We also have a range of other fees which would not currently come under the Regulation 882 banner - the official control banner. We would see potential for some of those fees to be adaptable, as this EU review goes on, in order to fit in with the new architecture and perhaps get us some of the way towards what will be required there.

Senator Pat O'Neill

I have a question for Mr. Coleman but I will first make a comment to Mr. Loftus. He said it was not the Department's business whether the costs were taken from farmers. If over €20 million is being taken from the dairy industry or the meat industry, I can assure him the processors are passing these costs on to the farmers.

I forgot to ask Mr. Coleman one question. What implications will these new regulations have for genetically modified plants and seeds coming into the country and into the EU?

Mr. Donal Coleman

At the moment they do not deal in any way with the possibility of GM plants or varieties coming into the country. These are regulations in regard to conventional plant material. They are not attempting to regulate or to change the legislation in regard to GM crops. To give a more complete answer on that, at the moment there are no GM crops or varieties available or cultivated in the EU and there is currently a moratorium, or certainly a logjam, and that is not going to change. However, that is a separate policy or set of regulations. These regulations on plant reproductive material do not have any implication for genetically modified crops.

Deputy Michael McNamara

What is the existing cost of maintaining that database and how will it change? That was my specific question.

Mr. Donal Coleman

At the moment the Department of Agriculture, Food and the Marine maintains the database within my own division, so we do not apportion an explicit cost to it; it is merely an intrinsic administrative procedure. In real terms, if one were to calculate it, the cost is quite low. It is not an onerous task and it is electronically transmitted to the European Commission. There are no major issues in the maintenance of it. There are costs, though, in regard to the evaluation of varieties and all of the work we do to decide whether varieties of new crops have sufficient agronomic potential for the country, although that is a slightly different question. The maintenance of the register is an administrative function. While it is early days yet, any change is unlikely to have any significant bearing. That is my view for the moment.

Senator Susan O'Keeffe

I am trying to clarify this in my head. Have I understood correctly that this deals entirely and solely with everything produced within the EU? I cannot see where it deals with what is coming in. The EU cannot regulate for food production in other countries outside the EU - I accept that. I am sorry if I am having a stupid day.

Mr. David Lynch

In regard to the official controls that are carried out, Article 1 lays down the scope. Article 1.3 states that it shall apply to official controls performed to verify compliance with the requirements for goods and animals entering the Union from third countries. Therefore, it will and it can lay down whatever controls it feels should be applied on checks that are carried out on materials and animals coming in from outside the Community. Again, it does not go into the details. When we go through it, the Senator will see that it states that the Commission shall be empowered to lay down delegated acts which will go into the details. We have to wait for the details to appear later.

Senator Susan O'Keeffe

To go back a little, what I am asking is whether there is going to be an improvement, a tightening, an escalation or a further investment in controlling goods coming from outside. Is that what we are saying here? Is it too early to know what the regulation is saying?

Mr. David Lynch

It is too early to be absolutely certain. The current border inspection posts are mainly to do with checks that take place on food of animal origin. These posts will be changed to border control posts and the rules will be broadened to apply to both goods of animal origin and goods of non-animal origin. From that point of view, there will be a greater emphasis on broadening the scope of checks that are carried out on goods and materials coming into the Community.

Senator Susan O'Keeffe

So all countries will, effectively, have to invest in better border control.

Is it correct to say they will be obliged to do so - they will not have a choice?

Mr. David Lynch

That is the case. There will be some increase in activity at border control posts relating to goods of non-animal origin. There are very prescribed controls that are supposed to take place with regard to meat and meat products coming in. Inspections must take place. That is not the case, as far as I know, for plant products. There are fewer controls. There will be a greater emphasis on the checks that are carried out on such products.

Deputy Thomas Pringle

With regard to Article 82 and the potential for additional costs to be recoverable, I take it from the explanation given that there is potential for the Department to make the administrative costs recoverable in the future. I wonder what Ireland's view is on that.

Mr. Tom Loftus

Is the Deputy asking our view on whether that should happen?

Deputy Thomas Pringle

Whether it is a good thing or a bad thing.

Mr. Tom Loftus

As I outlined in my opening statement, we have reservations about the impact of the extension of full mandatory fee collection. That includes the type of thing we are speaking about - how far we go in terms of levying additional costs on the productive sector.

I may have misunderstood the Deputy's earlier question. The regulation as written provides that administration costs will be included and they can be attributed. We could do that now if we so wished. That said, the level of administration cost as an additional charge on the total would be a very small percentage, less than 5% of the total cost.

Deputy Thomas Pringle

In the case of beef?

Mr. Tom Loftus

In the case of the meat or dairy sector.

Deputy Thomas Pringle

Could it amount to €3 million to €4 million a year?

Mr. Tom Loftus

No; I do not think it would be of that order. It would be significantly lower than that.

Deputy Thomas Pringle

Is that something that Ireland will oppose, or is Ireland in favour of the measure?

Mr. Tom Loftus

As with many of the proposals before us, we are in a process of consultation with industry and engaging with the other agencies that are involved, including the FSAI and the Department of Health. They in turn are engaging with the HSE and local authorities. This is not just an issue for the Department. There will be discussions with the other member states. The details remains to be fleshed out. Whatever is done, it is important that the same thing is done in every member state so that we do not have a repeat of the current scenario in which some member states levy full or near-full costs and others do not levy much at all. This gives rise to competitive disadvantage.

Mr. David Lynch

With regard to fees, I suppose the Commission is coming from a particular point of view. The Commission states that all member states are suffering from difficult financial circumstances and is afraid, as Mr. Loftus said, that there are reductions in the quality and quantity of official controls, which is creating less than a level playing field. Perhaps it would be better if all of those people on whom official controls are exercised actually paid the cost of it. It allows for exceptions in the case of micro-industries. We are at the very early stage of discussions - we are only at Article 24 - and we are talking here about Article 76 or 77, so we have a bit to go before we have an initial discussion on it. In some of the early conversations, I did not get the feeling that member states were against what the Commission is proposing. Some member states have said that we should not exempt micro-industries - that everybody should be levied, and that would be a fairer system, with a small levy on small sectors and a larger levy on bigger sectors. There is a long way to go and a spectrum of opinions in the Community on how to look at this initiative. We will have to wait for a consensus to arise from the discussions before we decide how to handle the negotiations as we go on.

Chairman

We are a little less confused.

Senator Susan O'Keeffe

Given that it is so complex, will we have the chance-----

Chairman

A level playing field and flexibility do not actually match up with regard to costs or anything else. It will be difficult. Mr. Loftus said that other member states had concerns with regard to the cost and cost recovery in particular. It will be a while, and every day of the five years may well be needed before this is brought to a conclusion.

I thank the officials for appearing before the joint committee. We sought clarification, and they have been very helpful. The committee will consider today's deliberations with the valued assistance of the policy clerk to draft a synopsis. We will probably reserve the right to make a political contribution or to seek clarification at the very least. It may well be the case that we will ask the official with competency on COM 267 to come before us.

I propose to suspend the meeting and go into private session.

The joint committee went into private session at 3.35 p.m. and adjourned at 4.15 p.m. until 12.30 p.m. on Tuesday, 15 October 2013.