Dáil Éireann díospóireacht -
Wednesday, 25 Oct 1995

Vol. 457 No. 5

Adjournment Debate. - Extensification Premium Scheme.

Mr. M. Kitt

I thank the Chair for allowing me to raise this matter and the Minister of State for coming to reply.

I was disappointed to hear the result of the review carried out in the Department of Agriculture, Food and Forestry some months ago concerning the special beef premium, the suckler cow premium and extensification premium schemes. As a result of that review a number of farmers were told they had been overpaid premiums and that there were demands from the Department for refunds of the 1994 extensification premiums.

I tried to raise the matter in the Dáil by way of question to ascertain how many farmers were asked to refund an overpayment as it appeared a number of farmers in my constituency were requested to make such a refund. The Minister for Agriculture, Food and Forestry does not appear to have figures for the whole country, but on 17 October I was told that 73 farmers in County Galway had received a letter requesting a refund. My colleague, Deputy Leonard, informed me that 73 farmers in County Cavan and 50 in County Monaghan received a similar letter. Perhaps the Minister of State will indicate how many farmers are involved and how many are being asked to pay a refund.

A rule governing the extensification scheme states that to qualify for the scheme one must be under the limit of 1.4 livestock units per hectare. Why were farmers paid such premia when it clearly stated on their cheques that they were under the limit? I have a cheque which states that the stocking density was 1.38, which is under the 1.4 limit. It is disappointing and frustrating for farmers to be told that they will receive a cheque and then to be asked to make a refund. A farmer wrote to me inquiring why he was paid if he was not entitled to it and why he must pay it back. That reflects the frustration experienced by farmers in dealing with the Department of Agriculture, Food and Forestry. The letter from the Department states clearly that the recipient must pay a refund to the accountant in the Department of Agriculture, Food and Forestry and that failure to do so will mean the grant will be deducted with interest from any moneys due under the 1995 schemes. I have seen letters requesting refunds of £500, £600 and one constituent has been asked to pay a refund of £1,586.23.

If a genuine mistake was made and a grant for a cow too many was paid which might amount to £100, is it fair that a farmer would be penalised to the tune of £1,500 as a result of giving him or her an extra grant of £100? If a genuine mistake was made, it is obvious that the £100 could be refunded by the farmer in question who could retain the £1,500. That is natural justice. If the Minister dealt with the scheme in a fair and impartial manner, the farmers concerned would not experience hardship.

The Minister is a fair man and I hope he will be able to give me news that will gladden the hearts of the large number of farmers who have received letters requesting that they pay back the extensification premium.

Minister of State at the Department of Agriculture, Food and Forestry (Mr. Deenihan)

Under EU regulations a farmer may qualify for payment of extensification premium if his stocking density is less than 1.4 livestock units per hectare when, inter alia account is taken of: the number of animals on which applications were made under the suckler cow premium scheme and under the special beef premium scheme; the number of cows required to fill the milk quota; the number of animals on which applications were made under the ewe premium scheme and the total forage area declared on the area aid application.

In Ireland a total of 97,731 farmers were initially deemed to have qualified for payments totalling almost £58 million under the 1994 extensification premium scheme. Of this amount some £750,000 was subsequently found to have been overpaid to 930 farmers. When overpayments occur the normal practice has been to arrange for deduction of the amounts from future entitlements or request a refund directly from the farmer concerned. On this occasion, my Department decided that farmers who were overpaid amounts in excess of £100 should be made aware of the position by letter at the earliest possible date. Refunds were requested in these cases or alternatively the letters stated that arrangements would be made to recoup the amounts due from 1995 schemes entitlements. Unfortunately, some of the letters referred, inadvertently, to the question of charging interest on the overpaid sum.

Mr. M. Kitt

All of the letters.

Mr. Deenihan

I can assure the Deputy that in these cases there is no question of charging such interest.

The main problem which gave rise to these overpayments was the difficulty experienced by my Department in obtaining certified details of milk quotas held by farmers at 1 April 1994. The position in 1994 was that farmers who indicated on their area aid application that they had a milk quota were requested to approach their co-op or milk purchaser to have the individual quota formally certified. The certificate, when received from the co-op was to be furnished to my Department. A number of farmers did not furnish quota certificates in good time with the result that some payments of extensification premium were made without taking into account the number of cows required to fill the milk quota.

Because of these difficulties, my Department put new arrangements in place for obtaining milk quota details in 1995. For the 1995 schemes, each farmer was required to indicate on the area aid application whether he or she had a milk quota at 1 April 1995. Following agreement with my Department, ICOS asked the co-ops to issue individual certificates of quotas as at 1 April 1995 to each of their quotaholders. Quotaholders were expected to forward the certificates to my Department's area aid unit. While these new arrangements were an attempt to improve on the 1994 position, we are continuing to experience difficulty and delays in obtaining the certificates from some farmers. We are now arranging to obtain details of milk quotas electronically from co-ops and other milk purchasers and this should also contribute to ensuring that the 1994 extensification premium overpayment problem is not repeated.

Over payments also arose in a small number of cases where farmers were allocated additional quota rights from the 1994 suckler cow and ewe premium national reserves having been already paid extensification premium based on their existing quota or number of animals on which they applied whichever was the lesser. The additional allocations from the national reserves had the effect of increasing the number of animals which attracted the premium, thus increasing the stocking density in those cases. Most member states, including Ireland, experienced difficulties and delays in allocating quota from the ewe premium suckler cow national reserves in 1993 and 1994 mainly because individual quotas were initially agreed by the Council of Ministers in June 1992 and introduced with effect from January 1993. The timeframe involved for all member states was simply too tight to enable allocation of automatic quotas and to put in place national reserve arrangements. The difficulties have now been resolved, and I am satisfied that allocations from the 1995 and future years' reserves will be made in good time so as to avoid a repeat of extensification premium overpayments in future.