Simon Coveney (Cork South Central, Fine Gael) | Oireachtas source

The Deputy will be aware of the value of the EU-funded direct payment schemes to Ireland. Each year, farmers in Ireland benefit from funding of more than €1.5 billion under schemes such as the single farm payment scheme, the disadvantaged areas scheme, agri-environment schemes and so on. This comprises the entire net income of many thousands of Irish farmers.

The European Commission has an obligation to ensure that member states manage and use the EU funding granted to them in accordance with the very restrictive provisions governing the schemes and general financial provisions. All of the lands declared by farmers must be eligible if these lands benefit from payment under one of more or these schemes. Under the terms and conditions of the direct aid schemes, which includes the single payment scheme, farmers are obliged to declare only eligible land when making their applications and are to exclude ineligible features such as roads, buildings, farmyards, dense scrub, etc. These claims are then recorded on the Department's land parcel identification system, LPIS. Given the importance of the LPIS database in underpinning direct aid payments worth in excess of €1.5 billion annually, my Department is obliged under EU regulations to ensure its accuracy.

Following consultation with the EU Commission, as part of the normal accounting process, my Department was requested to undertake a complete review of the LPIS database. This ongoing review is of major significance as the Commission is seeking to disallow €181 million of funding to Ireland relating to payments over the past five years. As I have explained to the House on a number of occasions, this is currently the subject of an Irish appeal to the EU conciliation body. This land eligibility review has resulted in the necessity to adjust parcels of a significant number of applicants, where it was established that some ineligible features had been included. In certain circumstances, these adjustments are giving rise to penalties.

As I have said previously when I outlined the numbers involved, the vast majority of farmers in Ireland are not affected by this but some are affected in a minor way - we are trying to deal with those farmers - and a relatively small number of farmers have a big issue in this regard. We will deal with the latter farmers on a case-by-case basis in as practical a way as we can. I assure the Deputy I am not in the business of putting anybody out of business.

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