Dr. Al Grogan:

I am delighted to have this opportunity to go through the document. It was suggested to me to prepare a presentation and there is a copy of that available. A photograph is a good way of trying to explain rather than a thousand words, so if the members are happy to proceed in this way, I will take them through the presentation. Unfortunately, the transmission system to send the presentation to committee members electronically failed but we have printed a copy for everyone here.

Ireland is a diverse country in terms of landscape. The first image in the presentation suggests all the diversity we try to address when we are coming to an inspection. We have mountain, scrub, good land, hedges and forestry. In like manner, the diversity of farming ranges from dairying to beef through to sheep - sheep lowland and sheep mountain - right through to cereal and cultivation. As regards land eligibility, today's focus is on the marginal areas rather than the green fields and wheat fields. This is the focus we have taken in the document we have prepared for issue to farmers and we hope we have covered everything with full clarity.

Moving on to features that would give concern or need clarification, to make it easy to understand, I will use the general term "ineligible features" when discussing these. We will cover the various features a farmer might meet when completing his application. From the Department's point of view, we will focus on operating controls in harmony with the EU regulations that underpin this. We have a series of ineligible features depicted in the presentation. There are lakes and ponds and, in one case, a turlough. A turlough is, in the main, eligible as the water disappears and for most of the year the ground is open, available and in a suitable condition for grazing. Permanent lakes and water as well as access roadways to houses and the like are excluded from areas eligible for payment.

The next main area is hard features which are there permanently - for example, rock. Rock is common in many parts but mainly in the more mountainous and marginal areas. Again, there is some guidance on how to deal with that and I will take the committee through that later, but we have addressed the issue of rock.

I have highlighted roads and have given two examples of farm roadways. The first example is a photograph from a dairy farm. The roadway has a fence and a hedge on either side. In that case, it is an ineligible feature and must be excluded under the current arrangements. We are in discussions with our EU colleagues and have put a case to them to the effect that, in many cases, inclusion may be justified. We are still working on the possibility of getting internal farm roadways into the system in some way.

The roadway in the second photograph is not fenced off. In that case, the rules allow us to take out the minimum. Therefore, we can allow all the green area and simply take out two strips in the case of the metalled or gravelled roadway. We are addressing the possibilities. There are many arguments to the effect that internal farm roadways are good from a cross-compliance point of view in that they protect the rest of the land and prevent poaching and so on. This is something we are continuing to work on but, as of the publication of this document, we were unable to get clearance to give freedom on that. Obviously, we cannot guarantee anything until we clear it with our Brussels colleagues.

The next area I will focus on includes drains, streams and rivers. In the past, drains and hedges were excluded in the main. We brought in the designation procedure. In essence, this allowed us to make them eligible for payment. The first photograph is of an internal farm drain dug by the farmer. There is a hedge beside it. Both of these features are now included in the area of the parcel and are eligible for payment. The second photograph shows a natural stream or river. That is not eligible. Again, this has been operating for years and farmers are perfectly familiar with it at this stage.

A more difficult area is probably the area of accuracy. Farmers are aware that scrub is an issue. It can be difficult to get some guidance or accuracy in terms of the estimation process for marginal land. I will try to take the committee through a process by which we hope to help farmers in the approach. The committee has two photographs in this regard. I am sure no one has difficulty accepting that there is an issue to be addressed and how it should be addressed in one of the photographs. The second photograph is of an open clear field, but at the back we can see intense scrub and bushes in the lower part. Then, as we go higher up onto the hill, it turns into forest. There is variation but, in essence, it is fully covered in scrub and, therefore, must be excluded.

How do we help farmers to deal with this? I will try to explain this simply without spending too much time on it. There is a yellow outline on the parcel in the photograph. There are three areas where we believe there is a problem and where some reduction is needed. In the case of plot C, for example, we deem the land to be 100% ineligible. This is the traditional redline approach that most applicants and their advisers are familiar with. We are changing nothing here. This procedure is already in place. We deem the area in this example to be 100% ineligible. Plot B is 20% ineligible because of the small area to the right while plot A is 60% ineligible. The area is redlined and we can apply a reduction there.

What has happened under the new regulations? The new regulation has formally adopted a pro rataapproach for reduction. In other words, we apply a reduction coefficient. In this case, which involves three redlined areas, we apply three coefficients of reduction to reflect the position on the ground. We can see from the orthoimage that the rest of the parcel looks to be relatively clear. In that sense, it is clear and 100% eligible. A percentage must be applied except in the case of the plot C, which is intense scrub and is, therefore, fully excluded.

What other advantages have we achieved in the reform under the new CAP? Let us consider the idea of pro ratacalculation as we look at the photograph on the next page. We have had a similar system of applying percentage reductions and farmers are familiar with it. When farmers look at the shoulder or collar of their maps, they will see areas marked with Xs - for example, X01 or X02 - depending on the number of redlined areas within a parcel. Each area has a corresponding percentage reduction applied. In recognition of the difficulty in a farmer applying in that case, the Commission has given us guidance on how to operate. Some people have described the new guidance as tolerance. Anyway, it allows for an area of scrub to be in a parcel without the necessity for the reckonable area to be reduced and thereby reducing the area for which a farmer may claim.

In simple terms, if up to 10% of the parcel or the redlined area in a parcel - we will not redline where it is less than 10% - is ineligible, that parcel will be deemed fully eligible. The coefficient of reduction to be applied to that parcel is, in fact, zero. We have bands, for example, between 10% and 30%, between 30% and 50%, between 50% and 70% and between 70% to 100%.

Under the current guidance given to us, as implementers of the regulation, anything in excess of 50% should be fully excluded. We have difficulties with that. Given the realities of farming in Ireland, there are many cases where there is plenty of grazing activity on plots that may have more than 50% scrub. We have argued - I hope it will be accepted as to date it has been accepted - that we can go a little more than the 50% that the Commission recommends. We have chosen to run with a 50% to 70% block that would still allow a further 40% of the plot to be deemed eligible, as against the guidelines. However, we need to recognise that the Commission has a concern. We believe the Commission has accepted the position on the 70% to 100% block. Obviously, everything depends on the audit process afterwards. However, in terms of discussing this with our policy people, we are happy that it will run. Currently, from 70% up to 100%, the plot would be totally ineligible.

Having explained the process, the next question is how we deal with the conditions we meet on a farm. Scrub is one of the common features that has to be considered. Let us consider the photograph containing a cluster of scrub which is fairly dense. There is not much potential to carry out cultivation or grazing activity. In essence, that is 100% ineligible. Such plots that cover less than 0.01 per hectare come under the tolerance factor that has been in place traditionally.

Let us consider the second photograph. We are into open land, perhaps commonage country. In this case, the redlining comes into its own - for example, where there may be clusters of ineligible land, whether furze or scrub. There is an opportunity here and perhaps a little flexibility. If a farmer has a difficulty with this, the advisory system has been well trained in this regard. Following the issuing of this document, we have invited all farm advisory service advisers to sessions in the coming week to go through this again. We will reaffirm the process and how this works. This is essentially the guidance given to us by the Commission. In the case of the photograph, we can individually outline areas or take a cluster in an area and apply the pro ratareduction to the parcel - essentially redlining it. That can either be done online using the system or on paper by drawing on the map.

The next photograph is a representation of what might happen where there is low intensity of scrub. It is difficult to redline anything in particular in this case. In the case of the scrub, if we were to see the full plot and if the area in question were deemed to be greater than 10%, then we would apply a percentage reduction to the full plot or, if it was more convenient, we would redline a given area and apply the reduction to the redlined area. In this case, we would probably apply the reduction per seto the whole plot. If it is deemed to be less than 10%, there is no need to apply any reduction since it does not break the 10% threshold value.

In the next case, we probably have what looks like a hedge going out of control. We have to recognise there is a problem in this case in that it is 100% ineligible in the scrub area. Again, it is a red line case within the parcel as a 100% reduction is applied to that particular portion, which is all that is necessary from the farmer's point of view.

The third photograph probably reflects the position further up the hills, where things get a little intense in certain areas and there is furze spreading further out. Again, there is an intense portion there. For anything that would be greater than 10% red line, one would apply the percentage reduction, and if the remainder of the parcel is less than the 10%, one could ignore this and there would be no need to apply any reduction. Once it is less than 10%, there is no issue in that parcel.