Pat Deering (Carlow-Kilkenny, Fine Gael)
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Before we begin, I remind members, witnesses and those in the Public Gallery to make sure their mobile phones are completely switched off.

We are here today to discuss the special reports of the European Court of Auditors on EU support to young farmers and on the rural affairs programmes. I welcome from the European Court of Auditors, Mr. Kevin Cardiff, Mr. Janusz Wojciechowski, members, Mr. Peter Welch, director, and Mr. Tony Murphy, director and member-designate. I thank them for appearing before the committee today to brief us on two of their special reports, on the EU support to young farmers and on the EU rural development programmes. They will address the Oireachtas Joint Committee on European Affairs later today and we appreciate their giving of their time to address this committee.

I understand Mr. Cardiff will complete his term of office soon. I wish him well on whatever path he takes in the future. I also welcome to the meeting members of the newly-formed Oireachtas Joint Committee on Rural and Community Development, including its Chairman, Deputy Joe Carey.

I draw the attention of witnesses to the fact that by virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of their evidence to the committee. However, if they are directed by the committee to cease giving evidence on a particular matter and they continue to so do, they are entitled thereafter only to a qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given and they are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person, persons or entity by name or in such a way as to make him, her or it identifiable.

Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the House or an official either by name or in such a way as to make him or her identifiable.

I invite Mr. Cardiff to make his opening remarks.

Mr. Kevin Cardiff:

The job of the European Court of Auditors is to audit the spending of EU institutions and agencies and the performance of those institutions, that is, we look not just at the legality and regularity of their expenditure but also their effectiveness. The two reports the committee has asked us to talk about are special reports on the effectiveness of programmes rather than whether each amount of money was given to the right person at the right time.

In my time on the court this is the first invitation we have received to this committee but some of its predecessors came to us in Luxembourg and were able to see the European Court of Justice and some other European institutions. I would guess that Mr. Murphy, who will take over from me, will be happy to extend the same invitation if the committee would like that. I am taking advantage of this being my last session and of the committee's invitation to us to introduce my successor, Mr. Murphy. He is a former auditor in the Comptroller and Auditor General's office who has worked in the European Commission and the European Court of Auditors. When the Government was looking for my successor it advertised through an open competition and Mr. Murphy was the successful candidate.

Mr. Welch is the director in the Court of Auditors who manages the staff and the operation of the area of the court that deals mostly with agriculture. The specialist on this topic is Mr. Wojciechowski, the Polish member. He rushed here from Brussels today to allow us take advantage of his expertise. He is not just the member who carried out these audits, he is a member of the division of the court which looks after agricultural and natural resources issues and is a former Member of the European Parliament, who sat on the agriculture committee of the European Parliament. He is quite expert and has a sense of what parliamentarians are interested in, as well as what auditors are interested in. I will leave it to him to introduce the two reports and then we will answer the questions between us.

Mr. Janusz Wojciechowski:

I thank the committee for the invitation to present our main conclusions. Our two reports are interesting and important for the debate about the future of the Common Agricultural Policy, CAP, in the European Union. The first report is about the rural development programmes published last November. Good programming is key to the success and effectiveness of expenditure of the rural development fund. The fund comprises €100 billion for seven years or almost €15 billion per year. The direct payment aspect of the CAP accounts for approximately €40 billion per year while the market intervention fund accounts for approximately €4 billion. The rural development fund is approximately €14 billion. Altogether that is €58 billion per year.

The main beneficiaries of the rural development fund are France, Italy, Germany and Poland. Ireland receives approximately 2% of the total amount of approximately €2 billion over seven years.

The programming process is organised on a national level in the majority of member states but, in some member states, such as France, Germany, Spain and Italy, it is organised on a regional level. We examined 12 rural development programmes, RDPs, as shown on the map we have presented. The countries or regions audited included Poland, Romania, Greece, Austria, Campagna in Italy, La Rioja in Spain, and Ireland.

Our main audit questions were: is the programme focused on performance and reflected in the legislative framework? Do RDPs have potential contribution to better results? How was the programming process managed by the European Commission? The conclusions were that the programmes were too general, too long and complex with the programming process being too lengthy, and they were insufficiently focused on results. The data relating to the size of the programmes we audited are interesting and members can compare the size of the RDPs during the previous financial period of 2007-13 and the current period of 2014-20. The average size of the programme in the previous financial period was 459 pages, whereas it is 781 pages for the new financial period. Ireland is the only member state in which the RDP is not bigger than previously; it was one page shorter. Our opinion is that the Commission requires too much data and information. One of our conclusions is that RDPs are interesting for academic debates but they are not useful for farmers. The process of approval for programmes was lengthy, taking almost one year from the first draft being sent to the Commission to the final approval. In the Irish case, it was a little shorter but the process lasted almost two years in some member states.

The next slide outlines the problem we have legislating too late for the RDP. In the period 2007-13, everything was finished before the first year of the new financial perspective whereas for the period 2014-20, the regulations were adopted by the Commission in 2014. That was too late and the consequence was the lack of expenditure from the rural development fund, RDF. In 2010, after four years of the previous financial period, spending was 29%, whereas in the current financial period, it has only reached 21%. It was good for Ireland because in the previous financial perspective, Ireland was the leader. RDP spending in Ireland and Luxembourg was higher than 50% and no country or region had spending of less than 15% in 2010. Currently, we do not have a member state where the spending is higher than 50%. The two leaders in spending are Finland in first place and Ireland in second place. I offer congratulations because that is good information. However, in six member states, the absorption is less than 15%. This is the consequence of the programming process being too lengthy and being approved too late.

The next question is concerned with the report which I would like to present relating to the programming of the RDF.

Mr. Kevin Cardiff:

Would members like to stop for questions on the first report?

Pat Deering (Carlow-Kilkenny, Fine Gael)
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We will take questions on that. I call Deputy Carey.

Joe Carey (Clare, Fine Gael)
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I am Chairman of the Joint Committee on Rural and Community Development. On behalf of the committee members, I thank the Chairman for extending an invitation to us to attend to consider the audit reports on rural development programming. I welcome the witnesses from the ECA. I wish Mr. Cardiff all the best as his term in office draws to a close. I congratulate Mr. Tony Murphy on his nomination to the court. I thank Mr. Janusz Wojciechowski, who has a challenging name, for his presentation.

My committee is new and we had our first meeting on 29 November 2017. Rural development support is the second pillar of the CAP and my committee is interested in several elements of this policy. The EU plans to spend almost €100 billion on rural development in the period 2014-20 through the European agricultural fund for rural development. Ireland plans to spend €4 billion of public money on the RDP during this period. Given the expenditure involved and its importance in supporting a vital part of our economy, I welcome the report's conclusions and recommendations and the focus on performance and results. However, no one can foresee the future. There are plenty of potential shocks such as Brexit and the recent threats to international trade and the effects of climate change. How would the witnesses evaluate Ireland's performance when compared with that of other member states? What were the main lessons learned in terms of performance and the process for Pillar 2 of the CAP? Overall, how satisfied are they with the RDP?

Mr. Janusz Wojciechowski:

I thank the Deputy for this questions. In this report, our evaluation of the Irish RDP is positive. We have a big problem with the delay in the RDPs but in Ireland the progress of absorption is among the best in the EU. Perhaps more information about our evaluation of Ireland will be found in the next report about young farmers. We have two big problems in the EU - one is the reduction in the number of farms and the second is the reduction in the land available for farming.

In Ireland, fortunately, the situation is better; it is not the same as in the rest of Europe. We can observe positive results of the Common Agricultural Policy in Ireland. The country has good arguments for the spending of money and it is generally okay. There was no objection to the Irish rural development programme which had been designed especially for Irish farmers. Perhaps there might be more about it in the next report.

Seán Canney (Galway East, Independent)
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I, too, welcome Mr. Wojciechowski. I am from east Galway, an area that has seen an increase in the number of people leaving agriculture. There is also the fact that young farmers are not coming into it. That has been verified by the Western Development Commission and gives cause for concern. The number working in agriculture in the west has dropped by 41% in the past 20 years, which is a stark reminder of where the industry is going in the west. For young farmers-----

Pat Deering (Carlow-Kilkenny, Fine Gael)
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Will the Deputy, please, stick to the issue? We can come back to the issue of young farmers.

Seán Canney (Galway East, Independent)
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I will leave my question until then.

Charlie McConalogue (Donegal, Fianna Fail)
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I join the Chairman and previous speakers in welcoming the delegates whom I thank for their presentations. I come from County Donegal in the north west and I am Fianna Fáil spokesperson on agriculture. It is very useful that the delegates have taken the time to come before the committee to make a presentation on their reports and offer us the opportunity to engage with them in that regard.

Into how much detail did the delegates go while examining spending under the rural development programme in individual countries, in particular Ireland, under the various schemes in place? They may have done so, but if they did not, will they comment on the effectiveness of the schemes? I am interested in hearing about that matter.

The overall point made in the report is that in the previous CAP programme delivery period the schemes became more bureaucratic and more difficult to deliver. That is also our experience domestically. The feedback on changes to the Leader programme which has been a strong driver of rural development is that it is now more bureaucratic, which makes it more difficult to deliver. The experience of those applying under it and the ability of those at local level to direct it are reduced as there is more red tape. This has contributed to it being much slower in getting off the ground and it has also impacted on its effectiveness.

I am interested in hearing the views of the delegates from the European Court of Auditors on agricultural schemes. In this country we are much better at making payments than many of our European colleagues, but there has been an ongoing problem in making payments following on from farmers taking action on various schemes and as a result of funding often being withheld pending the resolution of issues. For example, if an issue arises on a particular scheme, for example, the GLAS environmental scheme, farmers will not be paid until everything is resolved. That goes back to the requirements to be met at European level in making payments, rightly so, as I accept that the money must be accounted for. However, there is a view that there could be more flexibility because of the fact that in many cases the programmes are of five years duration. The funding could be paid because in the unfortunate event that money has to be recouped there are the means to so do. Because of the approach taken many farmers who have spent money, made an impact and delivered the programme are left waiting unnecessarily for funds at the end of the process. I am interested in hearing the view of the delegates on the issue and whether providing for more flexibility is possible in how the schemes are administered.

I am also interested in hearing feedback on the communiqué published by Commissioner Hogan on the next CAP programme and his proposals. There are discussions on providing for more subsidiarity. Do the delegates believe the communiqué takes into account the findings they have made in their report on rural development?

Mr. Janusz Wojciechowski:

I thank the Deputy very much for his question. Yes, he is correct that there is too much bureaucracy, but we did not use that formula. Before my appointment to the European Court of Auditors, I was, as Mr. Cardiff said, a Member of the European Parliament. We discussed the issue of simplification at length, but, ultimately we did not reach it. We have a more bureaucratic Common Agricultural Policy. We counted the number of pages involved in the 118 rural development programmes and for the Commission there were approximately 100,000. That involves a lot of bureaucratic work, but it is not useful for the purpose of monitoring expenditure. In the audit we only covered the programming process, not individual programmes, but there was an audit of the young farmers' scheme, the results of which were very interesting. We observed that the problems of young farmers were a consequence of a policy that had not been sufficiently oriented towards results. Money is being spent, but nobody knows what is expected or what should be achieved with it.

We are preparing a briefing paper on Commissioner Hogan's proposals. Perhaps Mr. Welch might say more about it. At the end of March we expect to present our position paper based on our reports and the conclusions and recommendations made in previous reports. The document is being prepared by us.

Yesterday I presented the report on the rural development programme to the agriculture committee of the European Parliament and there was much interest in it. Everybody knows that simplification of the policy is necessary. Perhaps the Irish RDP might be a good example. One could ask that if it was possible to prepare a shorter RDP in Ireland, why was it not possible to do so in Italy, Greece or other member states? Perhaps there might be good practice in Ireland from which we can learn.

Pat Deering (Carlow-Kilkenny, Fine Gael)
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What about the Leader programme and the detail within various countries?

Mr. Janusz Wojciechowski:

The Leader programme was audited several years before my appointment. Perhaps Mr. Murphy or Mr. Cardiff might know more.

Mr. Kevin Cardiff:

There was an audit of the Leader programme before the Irish reforms. Some Irish MEPs saw it as supporting the Leader programme structure that applied at the time, but as we have never looked at the structure since, we are not in a position to talk about the Irish experience of the Leader programme, in particular. What we did find at the time was that an important element of the success of the Leader programme was keeping important decision-making functions close to the people who were receiving the funds. That was not the case for every element, but for some elements local decision-making was better than highly centralised decision-making.

Pat Deering (Carlow-Kilkenny, Fine Gael)
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Does Mr. Cardiff mean from the bottom-up, rather than from the top-down?

Mr. Kevin Cardiff:

Yes, but as we are auditors, we were saying at the same time that there was a need to control it and make sure the programme was effective. The problem is always one of balance.

We have not examined Leader since then, so I cannot really comment on the current Irish situation, but it was certainly considered for the work programme for the next two years. We are not planning to go back to it but we can-----

Pat Deering (Carlow-Kilkenny, Fine Gael)
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It is therefore basically the farm programmes that the ECA has dealt with so far.

Mr. Kevin Cardiff:

We carry out many audits that relate to natural resources and farming in general, including environmental matters. One of my earlier audits was on water policies and the CAP and the ways in which they interacted. We have looked at the effectiveness of the spend, the reimbursement systems, procurement - pretty much every element. One aspect of the rural development programmes we find is that one can have too many objectives. We find this in many different audits. If one has a single objective for a particular programme, it will probably have some impact. However, if one says that money may be received by a beneficiary and then one provides a list of several different things, that becomes more of a transfer of money than something that has particular purpose. At a political level, one might think that the transfer of funds from urban to rural areas or from Europe in general to outlying areas is perfectly correct. However, from an auditor's point of view, if one examines the effectiveness of the programme, one examines in particular the objectives of that programme and one may say a particular objective was not met.

Regarding RDP issues in general, we often find that things need to be simpler but we often also find, frankly, that the programmes do not deliver on the particular purpose for which they were set up. I ask the committee to forget the current young farmer's scheme and consider the old young farmer's scheme, for example - the RDP element of it rather than the scheme in general. One might say that a large number of young farmers receive some funding, but was there a real change in the transfer of farm holdings from older to younger farmers? We look at the objective that was assigned to the programme. Other elements, such as the impact on a rural area of the overall amount of funds transferred, can be very important too, but that is not typically what we look at. Compliance with the RDP is problematic. It tends to have a higher error rate. We will talk about this a little later in the day at the other committee. However, Ireland has no special problems. When we carry out our overall audit, in a given year there will typically be eight or ten cases in Ireland, sometimes fewer, sometimes more. We have no special pattern of problems in the Irish cases. If anything, not in this audit but in the 2015 audit we examined four or five Irish cases and found no errors at all. These are all positives. These were probably single payment cases. There were no particular issues or problems for Ireland. Generally speaking, the Irish system seems to be well administered. There were problems a number of years ago with the land parcel identification system, which I know caused trouble then. We talked about recoupment. Some problems with recoupment arose, but we have not found those problems more recently.

Pat Deering (Carlow-Kilkenny, Fine Gael)
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The next questioner is Senator Mac Lochlainn.

Pádraig Mac Lochlainn (Sinn Fein)
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I apologise for having missed the presentation earlier. I have seen a copy of it.

Deputy McConalogue touched on the issue of Leader funding. We were very proud of the previous model we had in Ireland in that it was rooted in communities, which is a big issue, as the witnesses know, in that it is desirable that European programmes be bottom-up rather than top-down and that the community genuinely feel a sense of ownership. It was a very good model and it has been changed. Communities have sought to soften the initial proposals for change, but it is not the same system it was across the board.

The other issue we hear repeatedly from Leader companies across the State is that there are serious delays in getting the funding out. It is much more bureaucratic than it was. We had a Leader system which was at the forefront of rural regeneration in Ireland, which was a template, which was the system that would be held up as the poster boy at European level and which was offered to other European states as the way to do things. What are the witnesses' views on the way we unravelled that and the problems there are with delays in getting the funding into communities? We now hear of profound delays across the State. Did this arise in the witnesses' research?

Mr. Kevin Cardiff:

As I said, we have not looked at Leader in Ireland in six years so we are not in a position to talk about the current situation.

Pádraig Mac Lochlainn (Sinn Fein)
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If Mr. Cardiff does not mind my asking, why not? This is the rural development programme. That is one of the core programmes in rural Ireland. Is it because it was lost in the wider European research the ECA was doing?

Mr. Kevin Cardiff:

The reason is simple enough. We are supposed to audit approximately €140 billion of European funding each year. We have increased considerably the number of special reports we carry out but we cannot handle more than approximately 30 a year. The more recent output is something between 25 and 35. Six years ago, it was closer to 15 or 20. Each audit takes about 13 months from inception to finalisation. There are so many different European spending programmes that coming back to them, even the larger ones, more than once every ten years is quite difficult. In recent times we have considered trying to look a little more strategically at the overall systems. This is precisely the report about which Mr. Wojciechowski spoke. We have stepped back a little and looked at the way in which this RDP, as a whole, is managed. The messages from that apply then pretty much to all the programmes, not just to certain specific ones. In truth, too, although the Leader programme has changed a lot in Ireland, it probably has not changed as much Europe-wide because there was a pretty basic reform more or less in the year or so after that report was published. We typically try to find a European-wide perspective rather than a specifically national perspective. We do not have the resources to go to every country and do that, but-----

Pádraig Mac Lochlainn (Sinn Fein)
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I ask that someone in the European Commission look at what the Leader programme in Ireland was and what has happened to it. Mr. Cardiff has a long history of public service in this State so he will be familiar with the previous Leader programme. I ask that someone in the European Commission in some way examine what was in place in Ireland and what is there now. It was held up as the poster boy.

Mr. Kevin Cardiff:

I am sure that can be done. We are the auditors, however, not the Commission.

Pádraig Mac Lochlainn (Sinn Fein)
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That is fair enough.

Mr. Kevin Cardiff:

Similarly, the Comptroller and Auditor General here cannot do everything so he samples. The managers of the programme are the Commission. I know, from the work of people such as Senator Mac Lochlainn, that the Commission is very well aware that the Irish system is asking these questions. There is no doubt about that in the Commission.

Pat Deering (Carlow-Kilkenny, Fine Gael)
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I will be helpful to the Senator. We will have Commissioner Hogan before the committee on 1 March. The Senator's question would perhaps be appropriate for the Commissioner to answer when he comes here.

Pádraig Mac Lochlainn (Sinn Fein)
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It is a fair point.

Pat Deering (Carlow-Kilkenny, Fine Gael)
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Senator Paul Daly is next, followed by Senator Grace O'Sullivan.

Paul Daly (Fianna Fail)
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I welcome the witnesses and the opportunity to engage with them. What I have to say is very brief and a little ironic. I welcome the fact Senator Mac Lochlainn has highlighted the overemphasis on bureaucracy down through the entire system. It brought back to my mind a conversation I had with a public official who was dealing with an application with which I was involved. I queried the amount of bureaucracy involved and how far-fetched some of it was, and the answer and the reason I was given was, "We can be audited by Europe at any time." He was overemphasising his need to cross the t's and dot the i's. It seems to me, having heard the ECA's report this morning, that there is something of a vicious circle in this regard. While the ECA does not want that overemphasis on the bureaucracy, the paperwork, etc., its perceived iron fist may be causing it to an extent with people on the ground. It is something of a vicious circle and a contradiction.

Mr. Kevin Cardiff:

It is a contradiction. An auditor comes along and finds a problem and then the natural reaction is to have additional control.

We do not typically argue for less control of spending. We suggest making this spending programme simpler so that it is harder to make a mistake. If there are 20 different potential objectives for a particular piece of spending, it is harder to say that any one of those is effective because the money is spread out. It is not focused on something in particular. A simple example, which we are going to talk about in the Committee on European Union Affairs, is reimbursement programmes where a beneficiary receives money with a bunch of conditions attached to it, spends it and then applies back for the money. Those programmes are more difficult and more complex. Therefore they have a higher rate of error than the single farm payment where there is an entitlement and the payment is based on that entitlement.

When the Commission is designing programmes, we encourage it to make them simpler so that control should be less of an issue. However, if Ireland makes mistakes and pays out money where it was not due to be paid out, the Commission will say it needs some of that back. It happened a couple of years ago. That means that the Irish Department of Agriculture, Food and the Marine is always anxious to have controls. It is important. However, we never say, for example on the area-based entitlement, that a country must be 100% right. If a European auditor, whether from the Commission or from the Court of Auditors, asks if a figure is right, I think the number is plus or minus 3% on the area. No one is expected to be 100% correct. However, they are expected to follow the rules that are there. We advocate not giving people an excuse for not following the rules. The rules should be made simpler in the first place. Maybe that is where the balance can be found. People need to follow the rules but the rules can be simpler. I estimate that in 50% of RDP reports, we say this could have been simpler.

Pat Deering (Carlow-Kilkenny, Fine Gael)
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I call Mr. Wojciechowski.

Mr. Janusz Wojciechowski:

Maybe after the next short presentation it will be easier to answer this question because there is a problem of logic of intervention in the RDP. The report on young farmers is a good example of the problem. The policy is not results-orientated enough. There is expenditure without results.

Grace O'Sullivan (Green Party)
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Senator O'Sullivan indicated. Would she like to hear the other report first, or does she want to ask her question?

Grace O'Sullivan (Green Party)
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Mr. Wojciechowski said there is a lot of bureaucracy. We know from farmers that they feel the burden of bureaucracy when they have to fill out reports. What steps is the Court of Auditors taking to try to minimise that? The witnesses talked about making the processes simpler. However, there is a general concern that the European Commission is overly bureaucratic in many ways. Given that, what concrete steps are being pursued to ensure the process can be cut down so members are not obliged to hear it has been six years since Ireland has had a review in respect of the Leader programme? That is not progressive. We need to know a timeframe. Targets were mentioned and we need to know when Leader will be reviewed. I would like to hear that it will be reviewed on a two or three-year basis. Then we can take action in Ireland, based on the conclusions of the reports of the European Court of Auditors. If we must wait for six years, loads of time will have moved on and we will have lost the opportunity. To me, there is a burden of bureaucracy. That is what I am hearing with regard to reporting on the RDP and Leader. What concrete steps is the court taking to reduce that burden both for itself and for applicants looking for funding?

Pat Deering (Carlow-Kilkenny, Fine Gael)
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There is a phone interfering somewhere.

Mr. Peter Welch:

We have been working hard in recent years to identify, generically, which schemes pose real obstacles for smooth implementation and which schemes are working well, more or less, in the sense of leading to legal and regular payments. We have an analysis of which sort of programmes lead to those results. That has featured heavily in our annual report over the past couple of years.

One of the key things we are doing in the report that Mr. Wojciechowski has presented is to look at the complexity of the programming documentation the Commission requires. Some of that complexity is bureaucratic but does not particularly affect the farmer as it is between Ireland and the Commission. We hope the farmer is not too affected by that. One element of that complexity is the wide range of schemes eligible for support under rural development programmes. There are 118 rural development programmes across Europe. Each one could be financing about 50 different schemes.

We are looking at an enormously complex universe of schemes. That is why we have to make some big choices about where we are going to focus our attention. Is there a way we can do some work which will cover more than one scheme at the same time? The key things we have been looking at over the past year, aside from these important reports, are the greening scheme which accounts for about 30% of direct payments to farmers and, emerging shortly, a report on the basic payment scheme that accounts for another 70%. We are focusing on those big schemes which affect every single farmer. We are trying to make sure that we provide a useful input so that it is right. One of the things we have achieved through this report is a much bigger awareness of the complexity involved in the programming. We were asked about the impact on the Commission's proposals. I am pleased the Commission seems to be looking at a slimmer and more strategic programming document in future. It is talking about bringing Pillar 1 and Pillar 2 together. We are seeing some impacts. I cannot promise we will be back in two years' time to look at Leader in Ireland. We have to look at everything else that is happening all across Europe, to see where the risks are and where we can have an impact. However, we are working very hard and providing a lot of useful information, which is helping target spending and industry programmes where they can make a difference.

Pat Deering (Carlow-Kilkenny, Fine Gael)
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I will ask Mr. Wojciechowski to give us the second report please and then we will take questions. Deputy Canney will be first in.

Mr. Janusz Wojciechowski:

This is the second report about our evaluation of the young farmers support scheme. This report was published in June last year. It was presented in the European Parliament before two committees, namely, the Committee on Agriculture and Rural Development and the Committee on Budgetary Control and I will outline the main conclusions. The main target of the young farmers scheme is the generational renewal of European agriculture. However, we did not achieve this goal. There is no generational renewal. This report shows we have very serious problems in European agriculture.

The first problem is the large reduction in the number of farms. In 2005, there were 14.7 million farms in the European Union. In 2013, it was only 10.5 million farms and the number now is approximately 10 million. In the European Union, we lose 1,000 farms each day. This is the tempo of reduction in numbers. Of course, it is possible to say we have bigger, stronger farms. However, there is the question of what should be the end of this process.

How many farms will there be in the long-term future? That was the first observation.

The slide on display shows the results of young farmers support in the period 2005-13. The blue line shows the number of young farmers, statistically defined as under 45 under the EUROSTAT category, in the European Union. The number of such farmers was 3.3 million in 2005 and by 2013, it was 2.3 million. That is 1 million young farmers fewer than before. The red line is the average size of farms. While that has increased a little, the data show that the area of land held by young farmers also was reduced in that they held 57.7 million ha in 2005 and only 51.9 million ha in 2013. There has been a reduction both in the number of young farmers and in the amount of land held by them.

The next slide shows that the number of young farmers fell in a majority of member states, that is, all but two, namely, Romania and Slovenia. The slide on display shows expenditure in the financial period 2007-13, when we spent €3.2 billion. Ireland was not a big beneficiary, as only 800 farmers were supported to the amount of approximately €6 million. In the current programming period, under the first pillar of the new system, for Ireland the amount is roughly €121 million.

The next slide contains very interesting data on the generational situation in European agriculture. The problem is that 80% of European farmers are over 45. They are not young as per the statistical category. One third of farmers are older than 65. There are only two member states in which the percentage of youngest farmers, that is, those under 35, is greater than 10%, namely, Austria and Poland. On the right hand side of the slide, we can see the percentage of farmers older than 65. This figure is under 10% in only three member states, namely, Germany, Austria and Poland. As for the situation in Ireland, the youngest farmer figure is 6.3%, while the oldest is 26.5%. That is better than the average but there is a problem in that there is no improvement in the generational situation in Irish farming, as is the case in the majority of member states. Portugal was a big beneficiary of the young farmers support. It has more than 50% of farmers who are over 65. The slide on display shows that we have different situations in different member states. It is not a good idea to propose the same solution for them when the situations are absolutely different. The slide on display shows that expenditure for 2001-13 was €3.2 billion in Pillar 2. In this programming period, we have €3.8 billion in Pillar 2 and €2.6 billion in Pillar 1 for the young farmers.

The slide on display provides examples from our report that illustrate the lack of logic of intervention. The examples are from my country, Poland, and from Italy. This is not a criticism of the member states but of the logic of intervention. In Poland, for example, a farmer holding more than 500 ha received €100,000 as a direct payment and an additional €3,000 as a young farmers payment. What is the impact for generational renewal? There was no reason for the payment. Was he a new farmer or was he in need of an incentive to stay in agriculture? No. While it was good for that farmer's additional income, there was no link to generational renewal. In Italy, it was the case that a company was supported by the young farmers scheme because one of the shareholders was young, even though he was not an active farmer. This company achieved €8,000 as an additional payment. This is not logical intervention. We criticise this. The target is generational renewal but this is not a good way to achieve it.

As I said yesterday at the Committee on Agriculture and Rural Development of the European Parliament, the main problem of European agriculture is that we plan the Common Agricultural Policy from a seven-year perspective but we need a long-term vision of the development of European agriculture, not over seven years but 27 years. What is our vision of agriculture in 2040 or 2050? We have to start our thinking about this. It is a political question to create this vision. It is not the task of the European Court of Auditors. We can observe, however, that this is the main problem. How many farms should there be in Europe in the long-term future? How big should they be? How many farmers should there be? Should we have industrial farming or organic farming? There should be a clear policy for the future. Maybe Commissioner Hogan will propose something. The lack of a long-term vision for agriculture is the big problem and the big challenge for the European Union.

Pat Deering (Carlow-Kilkenny, Fine Gael)
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That was very interesting. Mr. Wojciechowski gave us some startling statistics, including the point that 1,000 farmers per day are exiting farming in Europe. Europe is a big place but that is still a huge number. Another significant statistic from his presentation is that 80% of farmers are over 45 years of age.

That number has not changed substantially in the last period of time either. The system was changed in the last Common Agricultural Policy review whereby there is a 25% top-up in pillar one. Has that been examined yet and has it made a significant difference for young farmers and generational renewal? Young farmers received a 25% top-up on their basic payment.

Mr. Janusz Wojciechowski:

As I said previously, the progress of absorption is only 21%. It is too early to evaluate the functioning of the young farmers scheme. In the previous system it was only pillar two, now it is pillar one. The examples I presented from Italy and Poland show that this form of support probably will not be effective for generational renewal, but we do not have the full evaluation of the new system. It is a political decision which system will exist in the future. The problem is that this is the consequence of programming proceeding too late. Now we have full knowledge about the functioning of the system in 2007 to 2013, but we do not have an evaluation of the new system yet. We start debate about the system after 2020. This is the big problem. The new policy and new instrument should be based on the evaluation of the previous period but we do not have enough data to evaluate it.

Mr. Peter Welch:

It is early days but we are seeing much dead weight in that measure. That extra 25% goes to many people who would have taken over the farms anyway and there are probably not many who specifically take over a farm simply because of the 25% they will get for a five year period. It is probably not a sufficient incentive for people to do something they were not going to do anyway. That brings us back to one of the dilemmas. We like simple schemes and this is quite a simple scheme. However, just because it is simple does not mean it is necessarily going to have a big impact.

Seán Canney (Galway East, Independent)
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This is something that is exercising my mind. The figure is 1 million young farmers lost from agriculture in the eight years between 2005 and 2013. That is supported by the figures from the Western Development Commission which show that 41% of people left agriculture in the 20 year period up to 2016. The witnesses are the auditors and part of their job is to examine whether the money we are spending is effective, being spent correctly and if there is value for money. I guess that the stark reality here is happening throughout Europe. I think of the west of Ireland and places such as Galway, Donegal, Mayo, Sligo, Leitrim, Clare and Kerry and I wonder what type of country we will have 20 years hence. We will have a country with no people living in rural areas and big farmers who will be farming major portions of land. The same thing appears to be happening in Europe now.

The witnesses have given us the facts from the audit but there is one thing lacking. Have they proffered any solution? As the fall-off is so dramatic and given that there is an ageing population in farming, the Court of Auditors should not leave this for another ten years before it audits it. This is alarming. Year-on-year changes must be made to make sure it becomes effective. We must attract people back into farming. We must ensure that young people would prefer to be farming and making a reasonable living from it, rather than moving to the cities to work in factories, offices or whatever. Otherwise we will end up with rural Europe being devoid of people, services and communities. That is a huge problem. I have not found any comment from the auditors to indicate what they feel should be done. Having looked at the statistics do they think it is something that merits ongoing audit year-on-year rather than waiting for another ten years?

Also, the simplification we talked about earlier regarding Leader and so forth is probably reflected by farmers. Young people will walk away from this industry because there is too much hassle and not enough from it.

Mr. Janusz Wojciechowski:

I agree that it is a huge problem. We show the problem. The reduction in the number of farms has consequences for rural areas. The farmers are leaving the job and going to the cities. It is a big problem. Our report shows the same. There is a problem with synergy between the European policies. Take the example of the young farmers. The results were a little better for the young farmers scheme in Poland. The generational renewal was achieved a little, although not much. The reason, in my view, was not support for young farmers support but for old farmers. It was a pension fund, which was the structural fund for pensions for the old farmers. It was the reason they decided to give their farms to the young generation and it was effective. It should be considered. Perhaps this is a good solution too - good synergy between the policies and the pension policy. They are not easy solutions.

I am not a politician now. If I was a politician my answer would be clearer, but I am an auditor and we are waiting for the clear vision of the European policy. When I presented this report in the European Parliament one Member of the European Parliament said, "Okay. We had 14 million farmers and now we have 10 million farmers, but 10 million farms are better because they are stronger farms. This policy should be continued". That was one political opinion about it. As a former politician it is not okay for me, but not as an auditor. This is the reason I said earlier that we need a long-term vision for European agriculture. That is the situation from my point of view.

Pat Deering (Carlow-Kilkenny, Fine Gael)
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Is Mr. Wojciechowski saying that, rather than encouraging the young farmers, perhaps the emphasis should be on encouraging the older farmers to move out of the system?

Mr. Janusz Wojciechowski:

Yes.

Tim Lombard (Fine Gael)
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I thank the witnesses for the presentation. It is very helpful and informative. I have some questions on the statistics. Is a young farmer defined as 45 years of age in the statistics in the report or what is the age for defining a young farmer? In Ireland it was traditionally defined as 35 years and later it moved to 40 years. A report issued in Ireland several years ago stated that there were more farmers over 80 years of age than under 35 years of age. I do not believe that statistic has changed. That is the imperative in this situation. The two big issues in Irish and European agriculture are age and what we do about carbon and climate issues. I am seeking clarification of the European definition of young farmers. Is it 35, 40 or 45 years of age?

The Chairman stated that the issue is not so much the young farmers coming into farming as the older farmers leaving.

Traditionally, we had a retirement scheme for farmers and it worked very well. It promoted the younger farmer coming in and the older farmer leaving the occupation. It operated between the ages of 55 and 65, if I recall correctly, and at the time there was a very good uptake. Should the Commission be looking at that and incentivising a project of that magnitude so we could have a generational change? As the figures demonstrate, it is the most important element required in European, if not Irish, agriculture.

This is a macro report and it considers the entire topic from a European level. Have the witnesses drilled into the small and minute details such as issues with Irish farming for young farmers, including the matter of "old" young farmers or gentlemen involved in partnership schemes who did not get installation aid or the top-up? Were those cohorts examined in the report and if they were, what were the results? If they were not examined, will those two very important cohorts be considered? They feel they have not been looked at appropriately by the current system. It is all about the age demographic. As the Chairman said, perhaps it is not about getting young people into farming, although that is very important. The infrastructure we have put in place in the past few years and through the agricultural colleges must be acknowledged in that respect. Perhaps we must act on the other end and we need a promotion to help the next generation to let go of the reins.

Mr. Janusz Wojciechowski:

The statistical category of between 40 and 45 under EUROSTAT is used in our report.

Mr. Peter Welch:

There is a sad complication in that the definition of young farmer in terms of the EU schemes is 40, which seems young to me these days. EUROSTAT and DG Agri, which collect some of the numbers on this, tend to collect data for farmers under the age of 35 and farmers between 35 and 45 and so on. One cannot get a set of statistics that quite match the policy we are aiming for. It is quite reasonable to think the figure given is close to the reality, possibly across Europe. What we see across Europe is that only 6% of farmers are under 35. There are many complicated structures around the different member states. In some cases farms are family businesses and many members of the family have a role in the farm. Sometimes they are held by companies. We have not done an exhaustive examination of all the elements. Mr. Wojciechowski indicated in the presentation that it is in the member states where there is a scheme for looking after older farmers that one sees a better performance. It is correct to say that in Germany a farmer cannot claim an old-age pension unless one ceases to be a farmer. Germany has one of the better performances in terms of generational renewal. There is a relationship between all these policies. Sometimes it goes beyond our audit scope and into general social policies.

Mr. Janusz Wojciechowski:

There is a very important question. We have a Common Agricultural Policy and a cohesion policy. A Common Agricultural Policy is not enough to solve all the problems of rural areas. It may be different in Ireland but I have an example from my country, Poland, which is a big beneficiary of cohesion policy and the Common Agricultural Policy. From the Cohesion Fund, only 11% is addressed to rural areas, which is 90% of Poland's territory, with 40% of the population. That is an incorrect proportion in my view. With the Common Agricultural Policy, which takes in food supply safety and the environment, the development of rural areas should be supported. The Common Agricultural Policy and cohesion policy are equally important in this respect. It is necessary to change the political vision. It is absolutely necessary to support rural areas even more now because we have the problem of people leaving such areas. We can see empty villages throughout Europe and my country of Poland is the same.

Tim Lombard (Fine Gael)
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Have the witnesses looked at the "old" young farmers?

Pat Deering (Carlow-Kilkenny, Fine Gael)
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I would imagine it is not the witnesses' area of expertise.

Mr. Kevin Cardiff:

The audit certainly did not get into that kind of detail so we would not comment on it. The basic finding is that although we have had decades of young farmer support, it does not seem to have made much difference to the basic statistics. The implication is that if we want to support young farmers with a transfer of funds, which Europe does, we must transfer them in a way that would incentivise a transfer between generations. There were examples from Mr. Wojciechowski. A money transfer will not make a difference to behaviour and for a future Common Agricultural Policy, we must think about how expenditure would change people's behaviour. That is the core of the report's recommendation.

Jackie Cahill (Tipperary, Fianna Fail)
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I thank the gentlemen for the presentations. The first portion dealt with the rural development plan and the transfer of land to young farmers. If we are to preserve rural Ireland as we have known it, this must be a core policy objective. The train is leaving the station and if policy does not change very quickly, the family farm structure as we know it will disappear. The current policies go against retaining the family farm. There are incentives which do the same and encourage farmers to lease land to non-family members. The ownership and working of land need to be separated. If the family farm structure is to continue to the next generation and the one after, the young farmer must farm the land. It is not enough to own it as that will last for a generation and the family will then disappear over the horizon.

We have incentives, especially in this country, that have EU approval but they encourage large commercial farmers to take over tracts of land. It will destroy the family farm structure and unless we change those policy objectives soon, it will be too late. If I want to transfer my farm to my son, there is no tax incentive to do so. If I lease the land to a stranger three, four or five miles away, there is a very significant tax incentive. It is destroying the family farm structure. Unless we do something about it very quickly, the entire family farm structure will disappear. That would be very regrettable.

Our dairy herd size has increased dramatically and there is much demand for land. With the incentives, the price of leased land is getting very high. If a young farmer wants to work on the family farm and expand a bit, he would not be able to compete with the larger units in the area. He would be squeezed and feel he would not have a viable unit. There are problems with policy objectives and if we are serious about preserving rural Ireland, we must examine them quickly.

There is the question of how the schemes have been implemented. We have heard an amount of hard luck stories from young farmers who failed to qualify for the existing aid.

Everyone sitting at this table can provide a list of such stories. A fellow who kept a few cattle when he was in college would fall outside the five-year rule when he takes over the farm. If he had animals in his name at 20 and takes over the farm at 26, he is not eligible for young farmer aid. There are other instances of this. For example, if a young farmer took over the farm for health or family reasons after the age of 35, he would be left on a very low payment and would likely see no future in it going forward. This scheme has not worked well in practice.

Our family farm structure is crumbling. It is a structure which has served rural Ireland very well but the policies in place are undermining it. If one looks at the amount of mountain land being farmed by individuals - not owned, but farmed - one will see that it is increasing rapidly. The policy coming from and approved by the Commission is all geared towards large commercial units, which might be more effective for food production but which are certainly not conducive to good rural communities. If that family farm structure disappears, rural Ireland as I know it will be dead and gone.

Before I became a Member of the Oireachtas, I was the leader of a farming organisation. The family farm structure, to me, is sacrosanct, but as it stands we are losing it very quickly.

Pat Deering (Carlow-Kilkenny, Fine Gael)
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I am not sure if there was a question for the witnesses. Perhaps Mr. Cardiff can make a comment, or indeed any of his delegation.

Mr. Kevin Cardiff:

I do not believe it affects what we have said, but there is a big mix of issues here. We have to consider the layers of policy making that are involved. We have looked at a particular European programme and we have provided the results. When talking about the CAP, we should remember that it is not actually a common policy. There are many common elements and a common pot of money, which is then distributed. However, each country has a national envelope. There is quite a bit of national level adjustment, and the interaction of European policies with national policies must be considered. What the Deputy is saying is very interesting to us because it affects our consideration of the next set of audits we might do. In terms of policy prescriptions, we are focusing on the European level and what the Commission, as the main actor, should do, because that is what we audit. That does not invalidate what the Deputy is saying, but it must be remembered that the policy-making takes place at several different levels.

Jackie Cahill (Tipperary, Fianna Fail)
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Is it the Commission's policy to preserve the family farm unit? That is the key question. In my view, that is not happening at present.

Pat Deering (Carlow-Kilkenny, Fine Gael)
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That is probably a question for the Commissioner. Everyone accepts the points.

Mr. Janusz Wojciechowski:

The situation of the family farm is one of the key points for debate on the future of agriculture in the European Union. I fully agree with the witness. However, we now have a situation were 20%, that is, the largest farms, received 80% of European subsidies for agriculture, and the other 80% received only 20% of those subsidies. This is the political choice we face in deciding the future CAP. We show a picture of what the situation is. It should be very seriously considered why four million farms have been lost in such a short period of time. Why have we lost 20 million ha that were previously declared farmland? This is a very big process. It should be considered.

For our next audit plan, I propose to investigate the reduction in land used for farming. This is a big problem. There was debate about this issue in the European Parliament too; it is a very important problem. The situation faced by family farms is a key issue for the future. We have to decide what the policy will be for this type of agriculture.

Pat Deering (Carlow-Kilkenny, Fine Gael)
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What kind of interaction did the witnesses have with the Commission in advance of the current negotiations on the reform of the CAP? That feeds into the many of the questions we have had today. Did the recommendations of the witnesses feed into the process?

Mr. Peter Welch:

The Commission certainly takes account of our recommendations. Sometimes it takes account of our recommendations by saying that it rejects them and it does not want to implement them. We are not always pushing at an open door with our recommendations. In the lead-up to producing the communication that we have at the moment, it spoke to us again. It wanted to run through some of the things we had been recommending and to make sure that it properly understood those recommendations. We have a constructive relationship with the Commission from that point of view. We will also be producing a document of our own, commenting on that communication, over the next couple of months. It will be a briefing paper, not a report, which will look at it in the light of the things that we have been looking at and what we have been saying over the last few years. We will try to maintain that constructive process going forward, which will make it easy for people to take account of the things that we have discovered and said about it.

Michael Fitzmaurice (Roscommon-Galway, Independent)
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I thank the witnesses for their presentation. It contained charts from 2007 to 2013 showing that there has been a decline in the numbers of farmers. There were 300,000 farmers in Ireland when we joined the EU. We now have 120,000 farmers. It should not come as a shock to any body or group that farmer numbers have been in decline across Europe over the last 20 years. If I run a company and am losing money, I have to solve the problem straight away. I do not look at it for 15, 17 or 20 years. The witnesses can compile reports but if a political decision is taken by the Directorate-General for Agriculture and Rural Development, do they have any say in it? They have correctly pointed out that 80% of European grants go to 20% of farmers.

Deputy Cahill raised the issue of the family farm in Ireland. It has been decimated. The EU has brought in regulations which farmers have to adhere to, especially in the west, that mountains had to be destocked. Farmers cannot farm as they did before because of designations. The witnesses are wondering why we have lost such a large number of people - 41% in 20 years, as Deputy Martin Kenny pointed out. The reason is that people cannot farm their land. There has been no subsidy brought in for designated land. There has been a flight from the land, and that will continue unless the situation is addressed.

Ireland and ten other countries have to have a green certificate while the rest of the countries in the EU do not. I agree with the green certificate and believe that it is good for young farmers, but why is it not a requirement for the 27 member states? In Ireland, there are a group of young farmers who we call the forgotten farmers. The European Court of Auditors have looked over this and seen it going on for years. If one did not have a quota in 2000, 2001 and 2002, then it is their tough luck. Even if the farmer is still under 40, he or she cannot get the single farm payment because he or she has fallen through the cracks. I went to Europe to explain this, and I now know that the European Parliament voted on something before Christmas. However, we have lost young farmers because of that.

Do the witnesses agree that we are moving towards more industrialised farms? If a west of Ireland farmer is getting €4,000 through the single farm payment and another guy in another part of the country is getting €140,000 and a piece of land comes up for sale - we all know that farms have to increase a bit - then we know that the other guy is going to get the land.

The EU has watched over this - so has the Court of Auditors - and allowed it to happen, with report after report. That is the reason for the demise. We need not conduct a big operation of examination on it. What I ask is how much influence can the Court of Auditors bring so that the family farm will be protected. As Deputy Cahill pointed out, how much influence can they bring to bear to ensure that the farmer with 20, 30 or 40 hectares will be looked after? We can have all the reports we want in the world.

The other side of it is, how much has the Court of Auditors done where the likes of the big food joints as wells as the meat factories are dictating the price to the farmer? The farmer in Ireland, and in Europe, is a price taker, not a price maker. This has been watched over by courts of auditors and by the Department of Agriculture, Food and the Marine and nothing has been done. The single farm payment was brought in to ensure that people could afford food right throughout Europe. No one has a problem with that. In 1980, if a farmer sold three cattle, he could buy a car. One would need 30 cattle now to buy the same car. That shows the devaluation. We should not scratch our heads and wonder why we have lost the numbers of farmers we have in Ireland but also in Europe. There is a flight from the land. With all the statistics we have looked at there, I ask the members of the Court of Auditors when will someone shout stop. They stated these are political decisions. The buck is passed once again to the political people. While I know it, I did not have to do up a report. I know in my area what went on down through the years. We all know the number of farmers we have lost. What I ask the Court of Auditors is how it, as a body, will rectify this so that the forgotten farmer, including young farmers, will be looked after. How will it ensure that the family farm will be protected, that the EU gives a certain amount of payment and that, as was rightly pointed out earlier on, someone with seven donkeys does not get the payments? We are paying farmers to not farm right around Europe because to get the single farm payment one does not need stock of any type. I believe what we have done is generate hobby farmers who can go and work in America or any part of Europe and still draw the single farm payment. Will that continue to be allowed?

When one talks about young farmers, there was a system brought out - in fairness, by the previous Government - where one could go into farming and do the green certificate at the same time. On the new scheme that has come out now, the Department has stated that Europe said no, one cannot do that and one must have one's green certificate in one's hand. As a result, only 970 young farmers have gone into that scheme.

I agree fully that one needs to make sure young farmers are doing a certain amount of farming. I am not asking them to work morning, noon and night. It is also necessary to provide an incentive for elderly farmers. However, in saying that, and returning to the family farm, where a farmer who was in organics wanted to go into GLAS, which is Pillar 2 funding, the EU ruled that it was double payment it could not give it. At the same time, we can give an 80 or 90 year old farmer the single farm payment as well as plant his land, which will not bring any young farmer in. The Court of Auditors needs to look at all the scenarios. In my opinion, Europe, as well as the Court of Auditors, has failed to ensure that the family farm is protected.

The significant demise in farming is not news for the simple reason that a farmer might say - one should think of what I said about designations - "if my land cannot be farmed to its potential, why would I be getting nothing more?" That is the scenario that has come to pass. Right around Europe the big are getting bigger and the small farmers are being pushed out. I always thought that Europe was not for that but that is what it has done.

Pat Deering (Carlow-Kilkenny, Fine Gael)
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Following those statements, the witnesses may want to respond in general.

Mr. Janusz Wojciechowski:

In general, as to what is and can be the influence of the court for the future agricultural policy, the competence of the court, like all of the external audit institutions of the European Union, is like a doctor who gives a diagnosis and recommends medicines; whether the patient uses the medicines is a decision of the patient where the patient is generally the European Union.

This is my point of view. For the first time, before the start of the debate about the future of the Common Agricultural Policy, the court has interesting dialogue and reports and we discuss them. I again thank the committee for the invitation; it is a good example that we discuss seriously this data which show the dramatic conclusions of our audit. This is very important. In the Polish Parliament, and in the European Parliament, there was a similar debate. This is the first time the court is well prepared for this debate about the future. However, we are not politicians. It is not our decision which of our recommendations will be adopted and which of them will not be.

About the family farming, as I recall, this is not from the audit. As a former Member of the European Parliament, I am aware there was a long discussion of what was first a proposal of the European Commission to cut the payment for the big farms and to give more to the family farming. Finally, it was not accepted because the lobby of the big industrial farming was very strong there. These are politicians' decisions.

Our satisfaction, as a court, is that now we have an interesting report which is a good basis for the discussion. As Mr. Welch stated, we will prepare the briefing paper - our opinion based on the results of audit. I hope that our observation for the first time will be seriously considered during the debate about the future of the Common Agricultural Policy. I again thank the committee for its interest in us.

Pat Deering (Carlow-Kilkenny, Fine Gael)
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We are running tight on time. There are another couple of questioners. If Deputy McConalogue can be as brief as possible, maybe we can take two questions together.

Charlie McConalogue (Donegal, Fianna Fail)
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At the outset, I should have wished Mr. Cardiff well. I thank him for his service as the country's nominee after the past six years. I also wish Mr. Murphy well on his appointment.

On the report, I note the auditors' report finds that the objectives are not working and that the funding is not achieving its objective. Did they go into any detail to establish why that is? It may not be in their remit. I do not think they did but I seek to ascertain whether they did in any way try to establish that.

Also, in terms of those who are leaving, I note that there are almost 4 million farmers who have left overall in eight years. What is the dynamic behind that? What categories do those farmers fall into? Did they delve into that and can they enlighten us in that regard?

I echo what a couple of previous speakers stated on the importance of trying to sustain the family farm model here in the country. I reiterate the forgotten farmer issue that has been well made here, and how that is something we need to address and ensure that the Commission addresses in the next round, where a farmer, regardless of age, but who could be 25, who has been farming for more than five years is excluded and is not regarded as a young farmer. Although it is clear that there is consolidation of farming units, it is crucial that we do not have a CAP policy that unfairly accentuates that and does not allow farmers the choice to stay in agriculture because the young farmers' scheme, for example, excludes them even though they may only be in their late 20s but have been farming for more than five years.

They are left in a position where farming is not an option. The Common Agricultural Policy, CAP, leaves them in that position. Incentivising older farmers to transfer, whether to their own family or to neighbouring small farmers, is crucial. There is an emphasis on that too. There needs to be an appetite to ensure that they are passing the land on and that policy facilitates them to do that rather than retaining it. Older farmers will generally have small farms because if one has 30 acres and is 70 years of age, one might be able to manage it, but if one has 150 acres and is 70 years of age, one will not be holding on to it because it simply would not be possible. Holding on to those units may mean that somebody next door who has 50 acres and needs 30 more cannot make his or her farm more sustainable because policy does not facilitate the transfer in timely fashion. The graph of those under 30, under 45 and up to 65 shows that 20% of farmers are under the age of 45. Taking a starting working age of 20, that represents 25 years of working life. Only 20% of farmers are in that category. The largest category is those who are of pension age. It is inverted. There are fewer younger people and more older people in the industry to the extent that pensioners are the biggest sector. Policy needs to try to turn that around.

Pat Deering (Carlow-Kilkenny, Fine Gael)
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Unless Deputy Eugene Murphy or Senator Michelle Mulherin want to contribute, I ask the witnesses to sum up.

Mr. Peter Welch:

A point was made about the dynamic of people leaving farming. The Deputy highlighted an issue. The Commission's communication on The Future of Food and Farming draws attention to the number of smallholdings among the beneficiaries of the CAP. I cannot find the exact numbers but a very large percentage have less than 5 ha. As the Deputy points out, many older farmers are concentrated in that area. In our work, we are sometimes in different parts of Europe, visiting some of those very small farms - much smaller than 30 ha - run by older people. In those circumstances, those people will carry on farming for as long as they are there. When they go on, their farm will be almost systematically consolidated into a neighbouring holding because no young person will take over a small farm in a mountainous area and have a subsistence living starting in his or her 20s or 30s. No one will do that. That is a big reason for which people move out of farming. That degree of consolidation will always be there.

Another thing we see around Europe is that economic circumstances are very different in different places. There are places where people move out of farming because there are good jobs to be had in other sectors. One cannot stop them. That will also happen. There are also farmers who are losing their markets. That is a much more painful process. We are looking at income stabilisation mechanisms which are a means to stop a person from being forced to give up farming after just one or two bad years. We will look at that shortly to see if those mechanisms are working.

One of the many issues in this sector which constrains what we can do is that we look at European policies and how European spending works but we do not look at the whole range of factors which apply to farmers, such as inheritance tax, inheritance laws and so on. All of these things are national competencies. It is true of our recommendations and of the limits within which the Commission works that only a certain number of levers can be pulled from Brussels. Many levers remain in national hands and it is not really our job to tell different member states how to organise their internal affairs. We leave it to politicians to take political decisions and we also try to respect the rights of member states to take their own decisions in their areas of competence.

Mr. Kevin Cardiff:

We appreciate the discussion. We have been trying to get more time with national parliaments around Europe, not less, so the invitation is much appreciated. If it interests the committee, we can host it or a delegation from it in Luxembourg, as big or as small as members like, and we can spend more time both explaining what we do and exploring some of the detailed issues discussed. Some pertain to Europe and some are national issues but we are trying to have more to say that is relevant to decision-making. That is our direction. I thank the committee and, while I will not be there, I hope we will see members at the court or back here in a year or two.

Mr. Janusz Wojciechowski:

I thank the committee for the invitation and the interesting, inspiring discussion. It was a very good example of how co-operation with national parliaments is important for our work. I have one final reflection. There is discussion in the European Union about the idea of renationalisation of the common agricultural policy. It is not our responsibility to present opinion about this but our report shows that we need a more flexible European agricultural policy because we have a different situation in different member states and the future Common Agricultural Policy should be better targeted for the specific situations in member states. I am sure that it is absolutely necessary. We should not just discuss this with the European Parliament; debate with national parliaments is also very important. I thank the Chairman and distinguished Members of Parliament for this invitation.

Pat Deering (Carlow-Kilkenny, Fine Gael)
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I thank Mr. Cardiff and his delegation for coming here today. We have had a wide-ranging discussion on the whole CAP. One can see how important it is going into the future and important points have been made regarding generational change. I think Mr. Wojciechowski's idea about a longer-term view for agriculture and the CAP going forward should be considered, rather than the seven-year process. I thank Mr. Cardiff for his invitation. Hopefully we can take him up on it at some stage. I wish him success in the future. I wish Mr. Tony Murphy every success in his position for the coming period.