Tom Hayes (Tipperary South, Fine Gael)
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Question 8: To ask the Minister for Agriculture and Food her plans to implement the recommendations of the Joint Committee on Agriculture and Food report on the ERS; and if she will make a statement on the matter. [18806/06]

Mary Coughlan (Donegal South West, Fianna Fail)
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The report of the joint committee covered a range of issues and I responded to it in detail. A number of the committee's recommendations are precluded by the EU regulations under which the current scheme and its predecessor operate. I saw some merit in certain other aspects of the committee's report, specifically those relating to income limits and the maximum age of transferees in the current scheme. However, this scheme will close to new applications in December and the practical effect of any such changes would now be very small.

The committee paid particular attention to two issues. One was the implications of decoupling for retired farmers who had leased out quota as well as land to transferees during the single payment reference period. We have secured the best deal we could for people in this situation, in spite of the fact that the Commission was unsympathetic at the outset. In family cases, where a farm reverted to the retired farmer at the end of a lease without any entitlements, a family member taking it over will have access to the national reserve. Retired farmers in the current scheme who farmed during the reference period can activate entitlements and lease them to their transferees. At the end of the lease they can either sell the entitlements with or without land or lease the entitlements with land.

The other issue the joint committee focused on was the levels of payment under the two schemes. The European Commission has repeatedly ruled out the idea of indexation in the current scheme and has pointed out that the rate in the earlier scheme was set at the maximum amount for co-funding that the regulation allowed.

Denis Naughten (Longford-Roscommon, Fine Gael)
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The huge frustration that exists is mainly due to the fact that it has not been index linked. It has not kept pace with inflation or with the social welfare increases in recent years. The differential at present is quite marginal. Is it possible to ensure any future scheme will be linked to social welfare payment increases? Is there a mechanism that can increase the rate of pension available to people under the farm retirement scheme?

The clawback is causing much frustration for farmers. Those in receipt of the early retirement scheme pension were subsequently deemed eligible for a State pension. However, in some cases the farmer did not inform the Department of Agriculture and Food and the payments had to be clawbacked. In one instance in the Cavan-Monaghan constituency, an individual has received a bill for €35,000. Will the Minister address the issue?

There are several tax-related anomalies in the system regarding the long-term lease of stamp duty, the agricultural relief for the retired person, once the ten years are over, tax affairs and forestry grants. Will some of the anomalies be addressed to encourage participation in the scheme or any future scheme?

Mary Coughlan (Donegal South West, Fianna Fail)
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As I indicated, the issue of indexation is a principle that is not accepted by the Commission. However, a new scheme will be introduced. The decision on the scheme's emphasis will be based on the outcome of the partnership negotiations and overall funding for the rural development package. There are concerns about the issue of the clawback. There were cases where some farmers may not have advised the Department that they had an entitlement to a State pension. That is now being dealt with in that the two Departments communicate with each other on the matter. There was an issue with the data protection officer who indicated that direct access between the two Departments' computer systems was not allowed. On the basis of the application, we are in a position to ensure the administrative difficulty is addressed.

Several years ago when the scheme was introduced, the State pension was much lower. Now, thanks to this good Government, the State pension is at a high level. The difference between the two pensions has been reduced and there is no enticement to enter the scheme.

Denis Naughten (Longford-Roscommon, Fine Gael)
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Should there not be a mechanism to increase it incrementally?

Mary Coughlan (Donegal South West, Fianna Fail)
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Under the EU regulation, there is a ceiling at which a payment is allowed to be made. That ceiling will be considered for the new rural development package. The Commission does not believe in indexation. I agree the anomaly can cause some serious issues.

The other issue of concern is that once the Commission's auditors and the Comptroller and Auditor General examine the schemes, they put pressure on the Departments to ensure the clawback is paid. There are people who are old and vulnerable and through no fault of their own find themselves in these difficulties. We try to consider each case individually to see what can be done. Unfortunately, often we are so precluded by these regulations that we do not have the flexibility that we would have ourselves. It is an ongoing issue and we will continue to evaluate the recommendations of the report from the Oireachtas committee.