I thank the committee for the invitation to appear here today on the very important topic of land eligibility and the challenges faced by farmers on marginal land. When we talk about marginal land we include upland areas, but also all kinds of lowland disadvantaged areas, including limestone crags, heavy soils, including bog, corcas, other lands close to rivers and lakes, and areas which are designated under Natura 2000.
Land eligibility is a key concern for all farmers looking at their applications for the new basic payment scheme. However, it had already emerged as a key problem under the single payment scheme, particularly with the LPIS review instigated in 2013. The farmers in marginal areas such as we have outlined are bearing the brunt of the assault on the land eligibility question.
The LPIS review of 2013 saw some 33,000 parcels becoming the subject of over-claim letters from the Department. Some of these farmers were able to offset the over-claim by having some excess land; some farmers accepted the penalty but some 10,000 appeals were lodged against the decision. When 10,000 people appeal the outcome of any regulatory or legislative process, it is clear that something is badly wrong. It is likely that many more would have appealed only for fear of what a ground inspection might entail.
Over-claim penalties have been applied for a variety of reasons. Unless the eye in the sky shows blanket coverage of rye grass or wall-to-wall cereals, the parcel will be subject to close scrutiny. Trees, farm roads, bushes, scrub, rock and marginal land with a variety of herbaceous material all attract examination. The satellite images were examined on a computer screen and the assessment of the computer operator formed the basis for penalties. In some cases the assessment was that land was 85% ineligible or some other percentage. In many more cases it was deemed 100% ineligible. This is a subjective process at best. Even when ground inspectors come out to walk the land, there can be a discrepancy in views. We have seen cases where experienced Teagasc advisers have given one assessment which is completely at odds with the eye in the sky and then an inspector comes out and gives a view which differs from both.
Stranger still, we have heard of cases where EU auditors have given a different assessment of the percentage eligibility of land compared with the Department's view, and this is not always to the disadvantage of the farmer. Of course, this is not that surprising. When one looks at rough grazing, marginal land or land with trees or bushes, it is a very subjective process to say how much is grazed or not. Can anyone really claim any level of precision by saying an area is 85% eligible? For example, the ground under a clump of trees may show up as brown if cattle are lying there. Should this be ineligible? This must also be examined in light of the rules regarding level of penalties for over-claims. The level of over-claim is determined by whether the over-claim represents more than 3%, 20%, or 50% of the found area. In our view, this rule was originally accepted for deliberate fraudulent declaration and it should not be used for this subjective assessment of the quality of a farm.
It is all too common for a farmer to get over 3% and, in fact, it is not all that unlikely to be over 20%. A 20% over-claim leads to an automatic 100% penalty. For many farmers, whose only crime is that they have a significant amount of marginal land, which is often hill ground, 20% is not unlikely.
The ICSA does not have any brief for farmers who have no stock and who are not actively farming. However, we do not accept that every hectare in the country is the same and can be farmed to the same level of productivity. Farmers who produce stock and who maintain the landscape that they have inherited should not be scapegoats. In practice, the entitlements to single payment reflect the productivity of the land in most cases. We now have a process which disproportionately hits those on marginal ground, even though their payments are likely to be lower anyway because they would have had lower stock numbers in the reference years. This is a double penalty.
The only way to avoid penalties is to aggressively reduce the declared eligible area, but that is like asking an employee to volunteer to do without pay for several weeks or months. The whole process is totally unjust in our view. Why should farmers on marginal land be subject to a mechanism that penalises them while, evidently, farmers on the best ground have much less chance of being penalised? It is also absurd that area covered by farm roads is being made ineligible. Farm roads are an integral part of an agricultural activity and should not be excluded.
A number of key points need to be made regarding this process. Is it fair that the Department should use different aerial images to penalise farmers in the autumn than the images with which it supplied the farmers at application time? Is it fair that penalties were imposed when it is clear that many of these applications were made by Teagasc and other professionals who seemed to underestimate the threat of penalties? Were farmers or professionals properly briefed as to what was coming down the tracks? Is it fair that the whole appeals process has been dragged out?
Justice delayed is justice denied. Many of the farmers who appealed penalties applied to their 2013 single payment have only had ground inspections carried out in the first three months of 2015 and, even yet, there are outstanding cases. In addition, farmers who have been fully or partially successful in appealing over claims are still waiting to receive the money wrongly withheld. Threats of retrospection only add to the sense of grievance on this issue and there is a real sense that the Government has washed its hands of the issue. We have repeatedly heard of a potential fine of €180 million, but this should have been sorted out by now.
An important issue in this debate is the contradiction between agricultural and environmental objectives. One arm of the EU is insisting that CAP policy favours biodiversity and is being shaped to contribute to climate change targets. Another arm insists that trees, bushes, scrub and less productive herbaceous material is unlikely to be eligible for CAP support under Pillar 1. Many farmers were sent in one direction under environmental schemes such as REPS by being contracted to keep habitats in as biodiverse a state as possible. These habitats are now routinely the subject of penalties under LPIS reviews.
There is a complete contradiction where, under the new CAP greening requirement, cereal farmers are being forced to devote at least 5% of their land to ecological focus area yet cattle and sheep farmers are being penalised severely for having more than 3% ecological focus areas. It gets worse when one factors in land designations such as SAC, SPA, etc., which are a response to EU directives. For example, farmers with a hen harrier designation are faced with severe restrictions on mowing, topping and spraying, yet are at risk of penalties when, inevitably, scrub starts to win the battle with grass. Some of the penalties imposed relate to ground which was designated as habitat under REPS. It cannot be acceptable that a farmer is given two conflicting objectives by two instruments of the CAP.
The logical response to the increasing risks of Pillar 1 penalties is to bulldoze or burn, but this is not the appropriate response to environmental objectives. In fact, it is the case that reputable ecological advocates, such as BirdWatch Ireland, share our dismay at the penalties imposed on farmers on marginal ground. We need to get certainty on what is and is not eligible. It is not acceptable that a farmer cannot get a definite handle on where he or she stands before he or she submits an application for Pillar 1 supports.
There may be a case for a minimum stocking rate appropriate to land type, but we cannot proceed where farmers are losing substantial tracts of ground even though they continue to farm and look after the environment.
It is our view that the new CAP provides considerable flexibility to member states to ensure that we do not have a repeat of the debacle caused by the land parcel identification system, LPIS, review. However, if we are to ensure that this happens we need clear guidelines for planners and farmers regarding eligibility. Significantly, we refer to the delegated Regulation No. 637/2014 which supplements Regulation No. 1307/2013, in particular articles 4(l) and (h). The new regulations provide that grasses and other herbaceous material shall be deemed to remain predominant when they cover more than 50% of the eligible area at the level of the agricultural parcel. Moreover, there is an additional flexibility for member states to allow for established local practices, traditional in character, which involve grazing livestock or which are important for the conservation of habitats. Given the experience of farmers in the last few years, it is essential that we have clear, readily understood definitions at the national level so that farmers cannot be penalised due to lack of clarity at application time.
Regarding GLAS, the ICSFA fully shares the concerns about how the scheme has been set out for commonages. There is also a very unsatisfactory problem in GLAS for farmers wishing to opt for traditional hay meadows or low-input pasture. This concerns the requirement to re-digitise a separate land parcel for the area concerned. In practice, it means that many farmers who do not have a separate land parcel that can be devoted to these measures are effectively barred from GLAS entry in 2015. This seems rather unsatisfactory and we do not see why it could not be facilitated after the closing date. I thank the members for their attention and look forward to answering any questions.