Stephen Farry MLA stated: “This £60m EU fine upon the Department of Agriculture is more than just an issue for the farming community but for all of Northern Ireland.
“It is wrong for the Chair and other members of the Agriculture Committee to argue that it will be the farmers who will bare the brunt of this cost. They have suggested that the cost of the disallowance just comes off single farm payments in the future. Rather, the disallowance is a fine on the Department, and therefore becomes an issue for the Block Grant and for Northern Ireland’s public finances as a whole.
“This point was clearly made by DARD officials at a committee session on 26 January this year, though the level of the disallowance has swamped any contingency steps that the Department was taking. I am somewhat baffled as to why a different impression is being given now by some politicians.
“While the Executive will no doubt seek to reduce the level of the fine, and I would hope they will be able to, it is clear that there will be a financial hit locally. The cost of this disallowance will have to be financed from the same pool that funds public services and is used to invest in economic recovery. At a particularly challenging time for public expenditure, it is a particular body blow.
“There is nothing to be gained from trying to downplay the financial impact of this fine or simply launching an attack on the European Union. Instead, it would be best if the Minister and the Committee recognised the fundamental problems that have occurred and demonstrate that lessons have been learnt for the better.”
Note for Editors:
I refer to point 3(d) in your letter to the Committee:
“There is a risk of disallowance arising from our area based payments”.
That point was referred to earlier. By my calculations, to finance everything that is contained in the letter, you are taking £30 million off the farmers. Am I right in saying that?
I do not know the basis for your calculations.
I will tell you something, Chairperson. It is no wonder that these gentlemen just handed that paper to us today. If I had received it last night, I know where I would have been. I feel very guilty here today about even discussing this paper. That £30 million has been taken off the farmers to finance the Department’s plans. By the way, I want to declare an interest.
The calculations contained in the paper represent money that has been taken away. A few minutes ago you told Willie Clarke that the agriculture industry in Northern Ireland is in dire straits. It is no wonder. I looked at that paper and compared it with the paper containing the spending plans, which outlines another CAP disallowance of £2 million. That is another £2 million that has been taken away, but it is farmers’ money that is being used to finance the Department’s plans. That is totally wrong. As I said last week, it would be far better if there were no grants at all, so that farmers could be on a level footing and get a decent price for their produce. All these papers show that farmers are paying to keep the Department going.
Chairman, if that is the way that we are going to operate, I am wasting my time on this Committee. I will go home tonight and discuss this paper with a good solicitor. I hope that the departmental officials have taken legal advice.
Are you guilty as charged?
Those are my figures. I may be £1 or £2 out, but I am not very far out when I look at the way in which the figure has been calculated. Mr Lavery, you may think that the farmers are a soft touch, but they have had enough of the Department. It needs to start playing ball with the farmers. You can take the horse to water, but you cannot make it drink.
I will make several comments; however, as I said, it will be without knowing the precise basis of Mr Savage’s calculations. In the incoming year, in 2010-11, we expect to disperse €340 million to farmers and rural dwellers. The Department will spend £245 million delivering services and offering national schemes. We have a very large expenditure and investment into the rural community, including farmers.
When we were making cuts, we did not exempt any area. However, we certainly had the Programme for Government commitments and public service agreements at the forefront of our minds. Our 35 PSA targets are primarily outward facing commitments to the public and the farmers; they are not inward facing to us. When we made our cuts, we delayed filling posts, we cut posts, we cut travel and subsistence, and we cut capital expenditure in the Department on areas such as accommodation. Therefore, it is not the case that we are looking to take money from farmers.
I want to make it very clear that the disallowance does not hit the single farm payment that we make to farmers; it hits the Department and the Executive. They get the bill for disallowance. It is not the case that it hits the payment to the farmer: we are obliged by law to pay the farmer his subsidy.
The disallowance of £30 million is farmers’ money.
It does not come out of the single farm payment.
It is coming off the individual farmer.
No; it will not come off the individual farmer. My case remains that the risk to the European fund is very low. The maximum that we believe has been paid wrongly is €1 million to €2 million. The disallowance of £30 million is a fine on the member state Administration; that is, on us, not on the farmer. The farmer gets his subsidy. What he is entitled to is unchanged.
I wanted you to clarify that because I know quite a number of farmers who are not related to me whatsoever and the disallowance that they have this year is unbelievable. It looks like that money was taken from those disenfranchised farmers to pay for the scheme.
I appreciate that, Mr Savage. Some farmers have claimed money to which they are not entitled, and they will be penalised for that. That overpayment will be recovered and will be returned to Brussels .
What percentage is that?
I do not have a figure.
It would be a very small percentage.
Yes. The disallowance that we are discussing today of £31 million, or £60 million, is a fine on the member state Administration. It does not allow one to top-slice that money from farmers’ subsidies. Entitlement to farmers’ subsidies is unchanged.
Gerry is actually saying that the situation is far worse than taking money off the farmers: it is about taking money off the entire population of Northern Ireland and from Northern Ireland ‘s Budget; which, from any perspective, is a far worse position to be in, because the whole Northern Ireland economy will suffer as a result. It could be ring-fenced to one section of the economy, and the impact may not be as great. However, the impact of taking £60 million from the economy is huge.