EU Commission officials are currently in Ireland to assess and audit ongoing land eligibility issues among other items.
According to an update from the Department of Agriculture this afternoon, officials from the European Commission are currently in Dublin completing a detailed examination stage of the Clearance of Accounts of the direct payments area-based schemes operated in Ireland.
This European audit process was outlined at a recent meeting of the Joint Oireachtas Committee on Agriculture.
“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,” said Kevin Smyth, assistant secretary at the Department of Agriculture, who was speaking at the committee.
He explained further: “Under the Common Agricultural Policy, this is done by way of a Clearance of Accounts procedure. This is a formal process and both 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 is currently covering five financial years involving the 2008 to 2012 scheme-years.
“In that regard, I can assure the committee that every effort is being made to ensure that Ireland’s case and the position of Irish farmers is strenuously argued during the process. This is vital as over €1.5bn of EU money is paid to Irish farmers each year and these payments are vital to farming and the rural economy,” he stressed.
During the years 2002 to 2012, the commission imposed financial corrections amounting to almost €6bn on member states.
Ireland’s share of this total amounted to €26m (or 0.5 per cent of the total amount corrected – one of the lowest percentages among member states).
According to the department official, under the EU Regulations, the commission has a right to impose a flat-rate correction of two per cent, five per cent, 10 per cent or greater depending of its assessment of the risk to the EU Fund involved.
He cautioned: “A mere two per cent correction on the 2008-2012 scheme years would mean a loss of €160m in funding to Ireland, with further losses in prospect on an ongoing basis. Member States such as France, the Netherlands, Sweden, Denmark, Austria and the UK have received major financial disallowances, amounting to hundreds of millions, for weaknesses identified in their LPIS systems.”
The LPIS review process initiated by the department last year consisted on a review of all of the eligible land parcels in the LPIS database, which was declared by farmers under the 2013 Single Payment Scheme, the Disadvantaged Areas Scheme and other Direct Payment Schemes.
Symth outlined in total, the review covered in excess of 132,000 applicants and the land parcels declared by them as eligible for payment.
“That review is now almost complete and details have been given to the Commission. The department is currently examining the applications for reviews/appeals submitted by farmers.”
He continued: “If the outcome of the review is successful the applicants are informed and the relevant adjustment made in the payments. If they are unsuccessful, the applicants are notified of their right to submit an appeal to the independent LPIS appeals committee. Where there is a doubt in relation to the area deemed ineligible, the department arranges for the area to be clarified by a ground verification visit to the holding.”
More than 500 of these visits have taken place to date.
He stressed that the undertaking of LPIS reviews is not a new development in Ireland. “In particular, the department carried out a significant review in 2007 and 2008 when ortho-imagery relating to 2004 to 2006 was reviewed.”
The department official explained further: “Ineligible features were identified and the appropriate reductions and penalties were applied in accordance with the governing EU regulations. The only significant difference with the 2013 LPIS Review is that with developments in technology achieved by the department it was possible to carry out a review of all of the eligible parcels in the LPIS database.”
He also said clarity was required regarding imagery technology.
“While my department was able to source new imagery in 2012, this does not mean that the identification of ineligible areas and features arose because of the quality and resolution of the new imagery. The new imagery was used simply to identify ineligible features and areas. All land parcels, which were identified as having these ineligible areas, were re-digitised to make the appropriate exclusions.”
Smyth said the applicant, who submitted his or her application, would have been fully aware of all of the features (such as houses, roads, rivers, forests and so on) and areas (scrub, ineligible bogs and so on) when submitting the annual application.
“The committee will also be aware that 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 I think that all applicants, who are farming the lands they declare, are fully aware of the features on their lands,” he said.
In terms of the retrospection process, the department said this involved the confirmation that the ineligible feature identified in 2013 existed in the previous years.
“This is done by reviewing the ortho-imagery for earlier years. If the existence of the feature cannot be confirmed then no retrospection can apply. To date, approximately 2,500 farmers were informed of the application of deductions for the period 2009 to 2012. The amount involved was €1m or an average of €100 per annum,” the department official concluded.
The EU audit is currently ongoing.