Due to Commission findings that some aspects of Irish control systems are "insufficiently robust at excluding ineligible land from payments to farmers in EU funded schemes", the Commission's Committee on Agricultural Funds has chosen to exclude a total of €68.9m from EU funding of various agricultural schemes for Ireland in the seven year period 2008 to 2014.

The Department of Agriculture managed to gain a reduction of over 60% on the original figure of €181m following negotiations with the Commission.

The negotiations followed the Commission's original proposal of a 2% flat rate financial correction of €181 million on Ireland due to inaccuracies detected on the LPIS (Land Parcel Identification System) database.

Opposition to flat-rate correction

At the outset, the Department opposed the application of the proposed flat-rate correction and sought a hearing with the EU Conciliation Body. The Department then reviewed over 900,000 LPIS parcels to identify and exclude ineligible areas in order to calculate the risk to the fund.

The Department also undertook considerable additional work at the request of the Commission to give assurance to the calculated risk which was subject to a further verification audit by Commission officials in May of this year. The Commission finally accepted the Irish approach.

Other member states have also had significant corrections imposed on them. Other significant exclusions include the Netherlands (€53m), Italy (€51.4m) and the UK (€37.9m). Overall, a fine of €278m has been imposed on 18 member states.

As of September 2015, the Department of Agriculture received some 10,932 appeals on penalties issued to farmers under the LPIS reviews.

Most of the appeals relate to clawback penalties imposed on farmers between 2013 and 2014. Approximately 400 farmers face a full 100% fine due to breaches of more than 20% and their penalties are not being absorbed by the Department of Agriculture.

Why is the Commission imposing this correction?

In order to fully benefit from payment under the Single Farm Payment farmers must declare an eligible hectare of land for each payment entitlement they hold. The EU Commission requires that the LPIS maintained by each member state be completely accurate (i.e. that all ineligible features such as farm houses, roadways, scrub, etc are removed) in order that payments to farmers are comprehensively verified prior to payment. If the Commission finds inaccuracies during its scrutiny of LPIS databases in member states, such as it found in Ireland, it imposes financial corrections.