Dr. Kevin Smyth:

I thank the Chairman for the invitation to discuss two important issues with the joint committee. The presentation I would like to make to it is about ten minutes in length, following which my colleagues and I will be happy to take questions.

I acknowledge that the recent stormy weather has had a significant bearing on farming and fishing communities and on others living and working in the areas badly impacted on. The Minister for Agriculture, Food and the Marine has visited a number of these areas to see the effects the severe weather has had on farmers. He has said he fully recognises the difficulties and the hardship being experienced as a result of land being extremely wet and slurry tanks being full or nearly full. He has reassured farmers that both he and the Department will do everything possible to assist them.

With regard to inspections, in particular, an issue in which I know the committee is interested, the Department will take a common-sense approach and farmers need not be worried or concerned on this front.

For example, where there has been severe storm damage, including damage to fences and grazing or large deposits of stones or debris, farmers will not be penalised under direct payment schemes. I will say more about this later.

The Department and the Minister have advised farmers who find themselves unable to feed their animals that help can be provided. He reminded farmers that the animal welfare helpline continues to operate for those with animal welfare concerns. Teagasc is already engaging with those clients who have been affected by bad weather. In addition, the Minister has asked Teagasc to make practical advice available to all farmers on steps that can be taken to deal with their particular problems and I understand it continues to do so. While the majority of livestock are still housed and the supply of fodder is not an issue, there may be cases in which farmers are faced with slurry tanks that are almost full and ground conditions that are not suitable for spreading. The Minister, Deputy Coveney, has said there are ways of addressing this and he advised farmers to seek advice from Teagasc.

To say that rainfall everywhere for January was above average would be a massive understatement. Percentage long-term average, LTA, values ranged from 122% at Finner in County Donegal to 183% at Oakpark in County Carlow, its wettest January since 2007, with almost double its average rainfall. Belmullet reported its wettest January since 1993 while Dublin Airport and Mullingar reported 162% and 159% of LTA respectively, with both having their wettest January since 1995. Knock Airport had its wettest January on record while Johnstown Castle had its wettest January in 16 years, with 140% of LTA. This weather is unprecedented and I remind the committee that this does not include the February rainfall figures.

As a result of this rainfall most lowland areas have experienced some flooding. However, with the majority of cattle housed at present, difficulties are localised to areas adjacent to rivers where flooding is above that normally experienced. There have been individual reports of storm damage to coastal lands and loss of fodder on a small number of farms. There are no indications of pressure on fodder at the moment. The quality of fodder conserved is generally excellent on farms and, subject to a normal spring turnout, the overall quantity should be sufficient.

A small area of winter cereals is flooded but has not yet suffered any ill effects. Crops were well established last autumn and would have to be flooded for nearly two weeks before major harm could be caused. No spring planting has taken place. The period for cutting hedges ends at the end of February. The current poor weather is preventing access to carry out this work. However, the dry autumn meant that the work was well progressed before the latest period of adverse weather conditions.

With regard to the major issue concerning this committee - that is, the effects of the weather on farming and possible penalties - I reiterate my central point. The Department's staff have been reminded of the need to adopt a commonsense approach and to be mindful of the recent weather. By way of example, a similar approach was taken when dealing with the proliferation of rushes due to the wet summer of 2012. In addition, as I have stated, storm damage such as loss of fences and boundaries, large deposits of stone and damage to grazing will be dealt with as force majeurecases and farmers will not lose their entitlement to payment or be penalised in such cases under the various direct payment schemes.

In regard to the second issue of the LPIS review, the committee will be fully aware of the background to this problem. The European Commission has an obligation to ensure that member states manage and use the EU funding granted to them in accordance with the very restrictive provisions governing the schemes and general financial provisions. Under the Common Agricultural Policy this is done by way of a clearance of accounts procedure. This is a formal process and both the Commission and the member states are obliged to adhere to the requirements laid down in the legislation. In the case of Ireland, the clearance procedure is currently covering five financial years, 2008 to 2012. In this regard I can assure the committee that every effort is being made to ensure that Ireland's case and the position of Irish farmers are strenuously argued during the process. It is vital that the payment to farmers of more than €1.5 billion of EU money every year continues, as these payments are vital both to farming and to the rural economy.

During the years from 2002 to 2012, the Commission imposed financial corrections amounting to almost €6 billion - that is, €6,000 million - on member states. To date, Ireland's share has amounted to about €26 million, or less than half of 1% of the total amount corrected. Ireland has one of the lowest rates among member states; I believe we are number 21 out of 27 member states. However, under the EU regulations, the Commission has the right to impose a flat-rate correction of 2%, 5%, 10%, or greater, depending on its assessment of the risk to the EU fund involved. A mere 2% correction to the money spent between 2008 and 2012 would mean a loss of €160 million in funding to Ireland, with further losses in prospect on an ongoing basis. Member states such as France, the Netherlands, Sweden, Denmark, Austria and the United Kingdom have received major financial disallowances amounting to hundreds of millions of euro for weaknesses identified in their land parcel identification systems.

The LPIS review process initiated by the Department consists of a review of all eligible land parcels in the LPIS database which were declared by farmers under the 2013 single payment scheme, the disadvantaged areas scheme and other direct payment schemes. In total, the review covered more than 132,000 applicants and more than 900,000 land parcels declared by them as eligible for payment under one or more of the above-mentioned schemes. That review is almost complete and some details have been given to the Commission. The Department is currently examining the applications for reviews and appeals submitted by farmers. If the outcome of a review is successful the applicant is informed and the relevant adjustment made in the payments. If it is unsuccessful, the applicant is notified of his or her right to submit an appeal to the independent LPIS appeals committee, chaired by Mr. Pádraig Gibbons. Where there is doubt in relation to the area deemed ineligible, the Department arranges for the area to be clarified by ground verification - that is, a visit to the holding. More than 500 of these visits have taken place.

I would like to clarify the impression that this is something new. The undertaking of LPIS reviews is not a new development in Ireland. In particular, the Department carried out a significant review in 2007 and 2008 when ortho-imagery relating to 2004 to 2006 was reviewed. Ineligible features were identified and the appropriate reductions and penalties were applied in accordance with the governing EU regulations. The only significant difference with the 2013 LPIS review is that developments in technology achieved by the Department make it possible to carry out a review of all eligible parcels in the LPIS database.

In addition, while the Department was able to source new imagery in 2012, this does not mean the identification of ineligible features and areas arose because of the quality and resolution of the new imagery. The new imagery was used simply to identify ineligible features in areas. All land parcels which were identified as having these ineligible areas were redigitised to make appropriate exclusions.

What is the responsibility of the applicant? The applicant must be fully aware of all features such as houses, roads, rivers, forests, areas of scrub and ineligible bogs when submitting the annual application. The committee will also be aware that each year the Department forwards maps, a copy of the terms and conditions, and a covering explanatory letter to all applicants. In all of the documentation forwarded, it is made clear to farmers that they should not claim for any ineligible land or in respect of features such as houses, buildings, farmyards, lakes, bogs, or, most importantly, scrub. Given the size of farms in Ireland, I believe all applicants who are farming the lands they declare are fully aware of the features on their lands.

The retrospection process involved confirmation that ineligible features identified in 2013 existed in previous years. This was done by examining previous ortho-images for earlier years. If the existence of the feature cannot be confirmed then no retrospection will apply. To date, approximately 2,500 farmers have been informed of the application of deductions for the period 2009 to 2012. The amount involved was €1 million, or an average of €100 per annum on an average payment of €11,000.

The applicants involved have the right to appeal under the robust review and appeals mechanism that the Minister has introduced. The process is ongoing and the European Commission has been informed that more verification checks on the work undertaken to date will take place next month.

Let me reassure the committee on one important point – no farmer will be penalised in his or her direct payments for temporary difficulties that he or she has experienced during the current spell of unprecedented stormy weather. Through a combination of a common-sense approach by inspectors, force majeureprovisions for temporary losses and a robust review and appeals system, no farmer will lose in his or her payments or be penalised where eligible land is temporarily rendered ineligible.