Paul Connaughton (Galway East, Fine Gael)
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I thank the Ceann Comhairle for selecting this matter. I understand that before the vote there was a discussion on Dáil reform. One of the issues was that a Topical Issue could be deferred so the Minister is present to reply. I am grateful that the Minister of State, Deputy Tom Hayes, can attend as I know he was unavoidably absent last Thursday.

In recent weeks I have been contacted by a large number of farmers in County Galway and throughout the country who received letters from the Department of Agriculture, Food and the Marine concerning so-called over-claims on their area aid applications. They are incensed that they may be retrospectively billed for past years. These farmers applied on the area of land that appeared on maps supplied by the Department and in some cases on the area of land as measured by the Department's own inspectors following farm inspections. I was contacted by one farmer who had an area aid inspection about five years ago and when he received the new altered maps he believed he had his duty done. However, he found that the new aerial photograph has resulted in him being penalised by another 0.5 of a hectare for the smallest of deductions ranging from 0.01 to 0.2 of a hectare spread out over the farm, including the lawn in front of his house. This farmer is under the 3% penalty clause, or two hectares, but is now dreading another letter in the post in a few weeks demanding payment of whatever the so-called recovery of the single farm payment might be.

All the farmers who spoke to me said they only wished to claim on eligible land and if there were some adjustments to be made following the aerial surveillance, they would accept this. However, there should be no retrospection for past years, given that it was the Department's maps which were used in this process. It is important that this message is conveyed to Europe. A strong message should be sent that this is an unfair penalty on farmers who, at all times, were only supplying the information that was supplied to them by the Department. Much of this problem is emanating from Europe and it is at European level that it must be tackled. Individual farmers cannot effect massive change within the system and for that reason I believe the Government must take this issue up at the highest levels in Europe and press for a fair resolution for Irish farmers. Penalising farmers retrospectively for something that is beyond their control, because they placed their faith in the figures supplied by the Department, will simply crush all credibility in the current system and will have a severely negative impact on the attitude of farmers to farm schemes in the future.

Another issue which is related to the issue under discussion is the length of time that the review process is taking. For a start, many farmers will not appeal the over-claim as they should, believing they are taking on the might of the Department of Agriculture, Food and the Marine. I will be urging all farmers to appeal all aspects of the over-claim that they feel are unfair. Second, for those who do appeal, the process is taking far too long. The timeframe for decisions must be made clearer and every effort must be made to ensure that the appeals are processed without delay.

In conclusion, I urge the Minister to take up this issue at the highest level in Europe and to make the strongest case possible for the farmers of Ireland, who are being treated in a most unfair way and who fear incurring penalties for something that is beyond their control at a time when they, like all people in the community, are under huge financial pressure.

Tom Hayes (Tipperary South, Fine Gael)
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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.

Paul Connaughton (Galway East, Fine Gael)
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I thank the Minister of State for his reply. I have no issue with farm inspections. They play a role in the Irish brand and we want to maintain current levels, which farmers understand. More than any other issue, I wish to raise that of payments being sought in respect of 2008 to 2011, inclusive. I understand that a new mapping service is being used, one that is extremely detailed and only became available to the Department this year. Any farmer with whom I have spoken or dealt wants to apply for the eligible land only. That is not an issue. Rather, those farmers have an issue with the retrospective fines that are being applied, given the fact that they used the maps that were available at the time. The information was also supplied by the Department.

In terms of audits, I understand that Europe wants to ensure that the money is spent exactly as it is supposed to be and that fines and penalties can arise. However, Europe is being slightly unfair, in that backdating these payments now is difficult when farmers used all of the information available to them at the time to submit their applications for the rural environment protection scheme, REPS, or the single farm payment. Will the Minister of State or the Minister, Deputy Coveney, have an opportunity within the coming weeks to take a message to Europe to the effect that every Irish farmer wants to stay within the law and only get paid for what he or she is able to do? It is unfair that backdating is being applied to payments when farmers had no hand, act or part in the making of this situation, given that they were only using the Department's information.

Tom Hayes (Tipperary South, Fine Gael)
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The last thing that the Department or anyone wants to do is be unfair to people. A process is in place whereby, if people are unhappy with the letters being sent by the Department, they can appeal. No one should experience hardship as regards this matter. This is the first point that needs to be clarified. An entire appeals section is available. If cases are causing hardship, either the Minister or I will deal with them individually.

It is important to stress the reason for these checks. When we fought a hard battle some months ago in Brussels to protect the single farm payment schemes, Ireland benefited. We should be the first to stand up and assert that we will run the schemes well and efficiently, but we do not want there to be hardships. I guarantee the Deputy that we will do everything we can to be fair to people, but we must live within the rules and regulations if we are to protect the scheme as we go forward.