Michael McCarthy (Cork South West, Labour)
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The issue I raise is the position regarding the claw-back of single farm payments and the ongoing review of land parcels. Approximately 25,000 farmers face penalties ranging from €50 to more than €9,000 following the Department's review of 900,000 land parcels. This amount does not take into account the possibility that fines for some farmers will be multiplied by five if the Department moves to impose the penalties retrospectively. This is the critical issue.

More than 40,000 letters have been sent to farmers notifying them of irregularities. Many farmers will have penalties imposed on the basis of land which they were informed was an excellent habitat when they were in the rural environmental protection scheme. This is a source of serious concern to farmers in west Cork and many parts of west County Kerry. I discussed the issue a moment ago with Deputy Arthur Spring who noted that farmers in parts of County Kerry are experiencing similar difficulties to farmers in County Cork because the types of land in the two counties are not dissimilar.

I draw the attention of the Minister of State, Deputy Tom Hayes, to the severity of the fines being imposed on farmers retrospectively. The fines are based on the eligibility of land for single farm payments. While it is one thing to be fined, it creates considerable difficulty when one is fined retrospectively. Many farmers were shocked to receive a letter and the retrospective nature of the penalties is causing great angst among them.

Most farmers understood they had passed the eligibility test for the years 2008 to 2010, inclusive, only to receive a letter in July this year stating they may have been overpaid for these years. More than 25,000 of them now face penalties of between €50 and €10,000. The Minister of State will be fully aware of the importance to the annual income of farmers of payments made under the single farm payments scheme, disadvantaged areas scheme and other direct payment schemes. The money these payments generates enables farmers to discharge debts to creameries and co-operatives. Local economies very much depend on these payments, especially those at the lower end of the scale. It is reasonable to assume that this money, once recycled in the rural and social economy, has a significant economic benefit. I have no reason to believe this does not also apply in the case of the Minister of State's constituents in parts of County Tipperary.

The problem I describe is particularly acute in upland areas. It should be noted that certain categories of land which are deemed eligible in one scheme are deemed ineligible when one moves to a different scheme. The red lining of land parcels which deems areas with any level of scrub and trees to be ineligible runs against the spirit of the REP scheme as it encourages farmers to eliminate such features. Contradictory approaches are being taken in two different schemes, with one encouraging farmers to be environmentally conscious and preserve these types of features, while a second effectively encourages farmers to tear them down.

Chief among the steps I encourage the Minister to take is to address the retrospective application of fines. This is causing serious difficulty in these straitened times. People are conscious of every euro they spend and cut their cloth to measure when doing their annual accounts. It causes considerable difficulty if they are suddenly landed with an unexpected bill. Many of the individuals concerned receive small payments in any event, which means money is more precious. An annual bill of €500 or €600 is a large sum for many people in the current economic climate.

Inspectors must take a common sense approach to the difficulties faced by farmers on marginal land. I will make a number of further points when the Minister of State has replied.

Tom Hayes (Tipperary South, Fine Gael)
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I thank Deputy Michael McCarthy for raising this important issue. I welcome the opportunity to clarify this issue, which is of significant concern to many people. Deputies are fully aware of the background to this issue and the necessity for the Department to carry out a complete review of the eligibility of the land parcels declared by farmers to benefit from aid payments under the single farm payment scheme and other direct aid schemes.

In total, in excess of €1.5 billion is paid annually to Irish farmers using European Union funds. The European Commission has an obligation to ensure 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. Under the Common Agricultural Policy, this is done by way of a clearance of accounts procedure. This is a formal process and the Commission and member states are obliged to adhere to the requirements laid down in the legislation. In the case of Ireland, the clearance procedure currently covers five financial years, encompassing the years from 2008 to 2012, inclusive, in the scheme. In that regard, I give an assurance that every effort is being made to ensure that Ireland's case and the position of Irish farmers are strenuously defended during the process.

All farmers are fully aware that to draw down payment under the single farm payment scheme, it is necessary to declare an eligible hectare for each payment entitlement held. Farmers who submitted an application will have been fully aware of the need to exclude from the area claimed all ineligible features such as houses, roads, rivers and forests as well as areas of scrub, ineligible bogs, etc., when submitting the annual application. Each year, my Department forwards maps, terms and conditions and covering explanatory letters to all applicants. In all of the documentation forwarded it is made very clear to farmers that they should not claim on any ineligible land or features such as houses, buildings, farmyards, lakes, bogs or scrub, etc. Given the size of farms in Ireland, all applicants who are farming the lands they declare will be fully aware of the features on their lands.

The land parcel identification system review process initiated by the Department consists of a review of all eligible land parcels in the LPIS database which were declared by farmers under the 2013 single payment scheme, disadvantaged areas scheme and other direct payment schemes. The review covers in excess of 132,000 applicants and the land parcels declared by them as eligible for payment under one of more of the above mentioned schemes. This review is now almost complete and details will be given to the Commission. The Department is currently examining the applications for reviews-appeals submitted by farmers. If the outcome of an appeal is successful, the applicant is informed and the relevant adjustment is made to the payment. If unsuccessful, applicants are notified of their right to submit an appeal to the independent appeals committee. Where there is doubt in relation to the area deemed ineligible, such as scrub, which is a particular factor of land in west Cork, the Department arranges for the area to be clarified by a ground verification visit to the holding. I believe that is very important. More than 1,000 of these visits have taken place to date.

I would like to avail of this opportunity to clarify a few matters which will be of interest and benefit farmers who find themselves in this situation. The recent decisions taken by the Minister for Agriculture, Food and the Marine ensure protection of payments to farmers under the new CAP regime. In terms of eligible land, a decision was made to use 2013, or 2015 if lower, for the calculation of a number of new payment entitlements under the regime. This means that the number of entitlements allocated to farmers should correspond to the number of eligible hectares on the holding. In addition, the total value of the new entitlements allocated to farmers in 2015 will be based on the total number of entitlements, rather than payments, owned by farmers in 2014.

Michael McCarthy (Cork South West, Labour)
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I thank the Minister of State for his response. On the issue of inspections, there is an element of cautiousness in this regard. Farmers have enough to do nowadays to earn a living without drawing that type of bureaucracy on themselves. A significant element of the debate on the Common Agricultural Policy and decoupling was bureaucracy and red tape. One would need a secretarial assistant to do all the work involved. Inspectors making the visits will have to display some common sense and flexibility. Also, retrospection is a critical issue.

One of the hallmarks of this Administration has been its ability to restore Ireland's reputation internationally, including among the European institutions, not least the Commission. We have done well in several deals, not least the promissory notes deal and renegotiation of the EU-IMF deal. We need to use the muscle we flexed in our dealings with the Commission on those significant, and often thought insurmountable, issues to negotiate with it an ineligible land amnesty. We are dutiful citizens of the European Union. We perform very well in terms of our obligations and duties. We have brought Ireland back from the economic abyss. We have done that despite many of the predictions to the contrary. We need to make our case on an environmental or tourism basis. We can use the strong connection we have with the Commission to negotiate the aforementioned.

Tom Hayes (Tipperary South, Fine Gael)
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It should be remembered at all times that Ireland receives €1.5 billion in EU aid in respect of direct payments to farmers. Farmers have become dependent on these payments to supplement their income. I accept that, as stated by Deputy McCarthy, they rely on these payments to pay their bills, etc. No farmer should, as a result of the review, be experiencing extreme hardship. It is easy to generalise. I know from my dealings on this issue in the Department and in regard to individual cases that the Department is considerate of people's positions and their payment situations. If, having gone through the formal structures in terms of an appeal, a fine is imposed, the Department should deal with the situation in a caring manner, taking into account that people are now extremely dependent on single farm and REPS payments.

A new REP scheme is currently being drafted in the Department, of which we need to be mindful. As I said earlier, Ireland receives €1.5 billion in EU aid. For this reason, we must ensure that the scheme is properly administered. One of the reasons Ireland was so successful in terms of its negotiations with Europe was that Ireland was seen as one of the countries that ran its business right. Inspection is part of the process. I acknowledge that several complaints have been made to the Department about inspectors. The Minister and I are aware of the upset caused to people by inspections. However, that is not the role of the inspector. In fairness, most of them are mindful of the upset caused by their appearance at people's homes. As in the case of the bag of applies, not everyone is perfect. If there are cases of hardship, they will be taken on board.

I would like the message to go out that we are living in an age where transparency must be part of what all arms of government do. The Department of Agriculture, Food and the Marine is no different. We want to be helpful to people. While I hope that we will become more disciplined into the future in the manner in which we operate all of these projects and schemes, I hope we will also be mindful of people's concerns.