Tom Hayes (Tipperary South, Fine Gael) | Oireachtas source

I thank Deputy Connaughton for raising this issue. It might help to bring clarification to it. Last Thursday, when this was due to be discussed, I was attending another function and could not be present, so my apologies for that.

As the House will be aware, my Department carries out a range of inspections on farms under the single payment scheme and other area-related schemes, covering such issues as the eligibility of land and cross compliance. This inspection activity relates to delivery of the significant supports paid to farmers under various EU and nationally funded schemes, as well as ensuring that requirements relating to public and animal health are being met. In carrying out these responsibilities, which must be done to a standard which meets EU audit requirements to protect the draw-down of the significant funding involved, every effort is made to take account of the realities of farming and particularly of the effects of the bad weather experienced in recent years.

By way of context, I will restate for the House the significance of the direct payment schemes to the farmers who receive these payments and also to the wider rural and national economy. In annual terms, these payments amount to some €1.7 billion. Under the single farm payment scheme alone, total payments since 2005 have reached almost €10 billion. In terms of the 2013 single payment scheme, over €582 million has already been paid to more than 115,000 farmers. These payments have provided farmers, and will continue to provide them under the reformed Common Agricultural Policy, CAP, with a stable guaranteed level of income during very challenging economic times and, as such, they underpin the future development of our farming sector, particularly in the context of the ambitious Food Harvest 2020 programme.

I will now give the House an overview of the nature of the cross compliance regime. All applicants under the single payment scheme and other area-based schemes are obliged to comply with the requirements of the cross compliance regime. Cross compliance involves two key elements: a requirement for farmers to comply with 18 statutory management requirements, SMRs, set down in EU legislation in the areas of public, animal and plant health, environment and animal welfare; a requirement to maintain land in good agricultural and environmental condition. My Department is required to carry out annual inspections to ensure compliance with the EU regulatory requirements of cross compliance. These inspections are mandatory and there are certain minimum numbers and types of inspections that must take place annually.

The rate of inspections for cross-compliance is 1% of applicants to whom the SMRs and good agricultural environmental condition, GAEC, apply. However, 3% of farmers must be inspected under the bovine identification and registration requirements, while 3% of sheep and/or goat farmers must be inspected covering 5% of the flock. It is a recognised principle of the direct aid regime that it serves broader public good objectives and contributes to the maintenance of the rural environment. These inspections are thus necessary to verify that these objectives are being met.

In addition, EU regulations governing the cross-compliance regime require relevant competent authorities to cross-report to my Department details of cases where non-compliance with the regulatory requirements is identified as a result of an inspection undertaken by that authority to establish if a penalty should be applied under the single farm payment scheme and other area-based schemes.

EU regulations governing the cross-compliance regime prescribe a range of penalties to be applied where non-compliance with the relevant legislative provisions has been identified. Where the non-compliance is due to negligence, the penalty is 3%, which can be reduced to 1% or increased to 5% depending on the extent, severity and permanence of the non-compliance. Where the non-compliance is determined as intentional, the standard reduction is 20%, but this can be reduced to 15% or increased to 100% depending on extent, severity and permanence. Where a non-compliance is deemed to be minor in nature, tolerance may be applied with the applicant advised to remedy the problem. Where the minor non-compliance is not remedied within a certain period, a penalty of at least 1% is applied. There are also penalty provisions where repeated non-compliance is determined.

Inspections under the 2013 single payment scheme are ongoing. Therefore, I am not in a position to identify penalty levels for this scheme year. However, under the 2012 scheme, a total of 2,472 cross-compliance penalties were applied in respect of non-compliances identified as a result of all categories of inspections undertaken by my Department and from cross-reports received therein. The value of these penalties was €2.4 million, equating to 0.2% of the total €1.2 billion paid under the 2012 scheme.

Additional information not given on the floor of the House

Appropriate appeal mechanisms are in place to protect the interests of farmers who have difficulties with decisions made in respect of their single farm payment applications. Under this process, a farmer may initially seek to have a cross-compliance penalty decision reviewed internally by a more senior officer. Where the farmer remains dissatisfied, the decision can then be appealed to the independent agriculture appeal office and, ultimately, to the Office of the Ombudsman, which brings an entirely external and visibly independent dimension to the process.

My Department has also established a farm advisory service operated by Teagasc under the single payment scheme and I recommend that any applicant with cross-compliance inspection or penalty concerns should avail of this service to allay any such concern.

In closing, let me emphasise that, in implementing the requirements of the cross-compliance regime, including the required inspection programme, my Department takes the maximum possible account of the realities of farming. Inspecting officers are regularly trained on how to conduct these inspections. Each inspected case will, therefore, have all factors, including poor weather, taken into account when any decision on the outcome of an inspection is reached.

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