EU `fine' could reach »100m

By Tristen Kelso

'Serious questions to answer'

The EU 'fine' in relation to the administration of Single Farm Payments in Northern Ireland could increase to £100m, it was claimed this week. This includes the 'disallowance' that could be applied to the 2009 scheme year, following a recent audit.

The news emerged after Northern Ireland MEPs Diane Dodds and Jim Nicholson met with senior EU Commission officials in Strasbourg last week.

The Irish Farmers Journal understands that the disallowance of €33.7m relating to the 2004-2006 scheme years has been agreed in committee and is expected to be formally adopted this month. A financial correction of €34.5m is being proposed for the 2007-08 scheme years.

These disallowances, in the region of £60m, follow the outcome of two earlier EU audits, carried out in 2006 and 2008. It has now emerged that a further audit was carried out by the Commission in November 2009, for the 2009 scheme year.

The findings of the 2009 audit, according to the MEPs, revealed many of the same deficiencies which gave rise to the disallowance penalties following the earlier audits. While no correction for 2009 has yet been proposed, it is 'likely', say the MEPs.

The Department of Agriculture and Rural Development is involved in discussions with the Commission on these audit issues.

In a joint statement, Jim Nicholson and Diane Dodds said that the Department had failed to seek their assistance on this matter. They warned that, 'DARD have serious questions to answer'.

''The DARD Minister must explain why, while the Department was under her watch, no action was taken to remedy deficiencies earlier,'' the statement added.

The prospect of up to £100m being deducted from the Northern Ireland budget at a time of serious government cuts comes as a major blow to the local economy. Questions will be asked why the Department failed to put its house in order sooner.

A Freedom of Information request by the Irish Farmers Journal reveals that DARD became aware of the first audit outcome in October 2006.

In its initial audit, Commission concerns centred around weaknesses in the Department's control process relating to:

The accuracy of the mapping system.

Ineligible land being accepted at on-farm inspections.

Farmers not reporting changes to fields or ineligible areas.

The application of penalties being 'too lenient'.

Since the initial audit, DARD has taken a number of actions to try to satisfy Commission concerns, including improving training for DARD inspectors, recovering money if any overpayment was made, the use of new photography technology to support inspections and actively encouraging farmers to notify DARD of map changes.

However, it now appears that these measures have not had the desired effect.

The Irish Farmers Journal recently reported major corrective steps that the Department proposes to take this autumn.

These include a review of all 740,000 fields for ineligible areas, followed by issuing new maps to farmers early in 2012. These steps form a key part of the Department's efforts to comply with EU Commission standards.

The Commission has acknowledged that a major improvement of DARD's mapping system is set to begin in September 2010. However, what isn't clear is when the meter will actually stop running, including the likelihood of disallowance applying to the 2010 scheme year or beyond.

In respect of the prospect of further disallowance being applied for the 2009 year, a DARD spokesman said it was 'too early' for the Department to comment.

The prospect of a record number of SFP recipients having to hand back any payments incorrectly received is likely, as the Department gets ready to scrutinise all fields for ineligible items, beginning in the autumn.

Diane Dodds and Jim Nicholson said they will continue to use their influence to fight against the disallowance, which they say is disproportionate. The MEPs say they will be requesting an urgent meeting with Agriculture Commissioner Dacian Ciolos on this issue.

In response to the joint statement from the two MEPs, DARD Minister Michelle Gildernew said: ''I welcome the MEPs' support and believe that, because of the potential impact of this disallowance on the North, we all need to work together to sort this issue out. I again want to appeal to farmers to make sure their maps are accurate and up to date''.