Mr. Aidan O'Driscoll:

We are required to carry out a certain percentage of inspections every year. For example, in terms of eligibility for the single farm payment, we are obliged to have a 5% inspection rate. Some inspections are made randomly, while others are carried out on a risk basis, which is an EU requirement. Risk based assessments include issues such as whether farmers had previously incurred penalties and so forth. Tolerance levels and levels of penalties are entirely laid down in EU legislation and we have no discretion in that regard. All of this is fully rendered in the farmers' charter which we recently renegotiated with the farming organisations. We completed the negotiations last week on a new charter which sets out tolerance levels and so on.

The percentage rate requirement for the basic payment is 5%; for disadvantaged areas, 5%; for greening, 5%; for cross-compliance, 1%; bovine identification, 3% and so on. Obviously inspections can be doubled in some cases. I will not go through all of the figures, but for the REPS, the rate is 5%, which rate also applies to GLAS and the Burren scheme. For TAMs it is 5% or up to 20% in the case of pre-approval inspections. These percentages are in EU legislation, but they are discussed with the farm organisations and built into the farmers' charter. Also built into the charter are the details on how inspections are actually carried out; in other words, the level of notice we give and so forth. All of the provisions included in the farmers' charter must be within the terms of EU regulations which are detailed in this space. They set out the tolerance levels that apply in different circumstances, including tagging, for example. If we carry out an inspection and find that X% of animals on a farm only have one tag, what happens? In such a scenario the tolerance level is set out clearly in the regulations and the farmer's charter, as is the tolerance level in a scenario where tags are missing from a significant number of animals but the farmer has ordered them, for example.

While farmers, admittedly, will see it differently, we try to be as reasonable as we can within the terms of EU regulations. It is only fair to say that on the issue of land eligibility which has proved to be the trickiest issue for us, in comparison with other countries, we have a much lower disallowance rate. We have consistently been in the bottom four or five countries in the European Union in that regard. Having said that, I am very conscious that there is a very significant disallowance rate hanging over us, with an initial figure from the Commission of €180 million-----