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.