Tom Fleming (Kerry South, Independent)
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6. To ask the Minister for Agriculture, Food and the Marine the position regarding issues that farmers face on the land eligibility penalties; and if he will make a statement on the matter. [35260/14]

Tom Fleming (Kerry South, Independent)
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The question relates to issues in regard to land eligibility. This is a very serious matter. It seems more than 33,000 land parcels are affected. Eligibility or ineligibility is a very grey area and I ask that the Minister makes every effort to minimise the impact on the Irish farmers affected.

Simon Coveney (Cork South Central, Fine Gael)
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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.

Tom Fleming (Kerry South, Independent)
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We are all aware there was no intent on the part of the vast majority of farmers who are affected by these regulations to break any sort of rule. Everything was done in good faith. The new satellite imagery system was introduced mainly to deal with marginal land. Much of this is questionable in terms of what the satellite has ascertained. Farmers consider they have grassland, even though it may be rough grazing. This is one of the aspects that have been ruled ineligible. It is a harsh way to deal with the matter. Some farmers will face massive claims for money drawn down.

Simon Coveney (Cork South Central, Fine Gael)
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The idea that we can just ignore this because farmers think they are being unfairly treated is simply not going to work. Other countries have been fined huge sums of money, amounting to more than €1 billion in a number of cases, because of this issue. We are trying to address the issue with as much accuracy as we can in order that farmers who have over-claimed, either by accident or otherwise, will primarily be the ones who give back money they should not have drawn down in the first place. This is a difficult process because we have to assess every land parcel in the country, of which there are hundreds of thousands, but we cannot ignore it. I recognise that some people will feel unfairly treated. That is why we have an appeals mechanism within the Department and a second appeals mechanism that is separate from the Department if people feel the Department might have it in for them. The latter mechanism is chaired by Mr. Padraig Gibbons, who is a much respected individual in the agrifood sector in Ireland. People are using those appeal systems and they are successful in some cases. The percentage is actually pretty good. We are trying to help people as best we can but we cannot ignore the issue because we will have to pay €181 million if we do so. That money would have to come out of the agrifood budget. I am not willing to accept that when, in my view, the figure should be much lower. That is what we are seeking to negotiate.

Tom Fleming (Kerry South, Independent)
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I acknowledge that the Minister is making his best effort with the European Commission but I ask him to go back to the table, particularly in regard to retrospective payments. A large number of farmers will be forced out of business if they have to go back over five years, as is being threatened. This is not an acceptable situation. It is well known that surveys are being carried out in respect of single farm payments. Many beef suckler and sheep farmers depend on the 100% rate of single farm payment to stay in business. It is practically the sole income for many farmers. In view of the significant detrimental effect this will have if it is pursued in the manner we have been led to expect, the Minister needs to work his weight to advance the position of Irish farmers.

Simon Coveney (Cork South Central, Fine Gael)
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I assure the Deputy we are trying to accommodate farmers as best we can. I have spent many hours speaking to my officials, farming organisations and farmers to figure out how we can do this in a way that satisfies the Commission in terms of returning public moneys that should never have been drawn down in the first place, while also managing any penalties that may be imposed in a way that is fair. We will investigate options for repayment schedules over a number of years in order that we do not target farmers excessively.

We will continue to try to be as flexible as we can. Most people who understand this issue would accept that if we just ignore it or refuse to pay, we will simply be fined a large lump sum of money which would go way beyond the figure we were effectively overpaid on lands where money should not have been drawn down.

We are still around the table; we have never left the table with the Commission representatives. We are now going to a conciliation process and we are preparing a very significant case. We have already sent the conciliation group a very detailed submission and we will give a verbal case to back up that in the not too distant future. We are looking to try to minimise the overall exposure for Irish farming so we can manage it in a way that is as farmer-friendly as possible.