Select Committee on Agriculture Minutes of Evidence

Examination of witness (Questions 140 - 159)



  140. What happens if farm Ministers, all of them having been to their local NFU equivalent's AGM and all of them having had their ears bent about how complicated this thing is, say, "For heaven's sake. This is too complicated. It is terribly difficult to get it right. All these chaps are saying that they are being subject to disallowance for purely innocent mistakes", and they send you away and say, "Come on, we want a much simpler form", and you are told to go away with a cold towel around your head for six months in some inhospitable spot where you have no diversion and come up after six months with proposals as regards producing a more uniform set of forms which are easier to observe and, from your point of view, easier to monitor and see who is doing what. What are the top three things that you would come up with?
  (Mr Slade) We are thinking about that already. As I said before, it is not the Commission's job to lay down what should and should not be in the claim forms, in the documentation. When I talk about disallowance, I talk about disallowance vis-a"-vis the national authorities. It is for the member states to sanction the farmers in accordance with the rules. That said, on the question of simplification, what are we aiming for? In the bovine premium schemes, we are aiming for a paperless system with no claim form. That is what we are going to be proposing. We are drafting legislation at the moment. We are putting together the concepts and the philosophies with colleagues in the member states at the experts group meetings. We are drafting the legislation to provide for paperless claim systems. If I can just briefly explain, in the bovine premium schemes, we have five different measures to take account of. Sometimes it is the same farmer who claims all five premiums. That is five times the paperwork. We also have legislation that provides for an identification and registration system, in particular a database, the bovine identification database. Eight or nine member states have already been approved by the veterinary service of the division. I think seven have actually been approved and two are on the way. Their database is operational. That is on the veterinary side. On my side, I am interested to see that it is operational from the point of the view of the farmers' and inspectors' understanding of the information that is given to them. It is no good having a database in London that looks very good if actually on the ground, things are very, very different. I am more interested in the reality of the information held in the database. As and when this database is set up, we will be able to halve the number of controls, inspections on the farm, because it will be a question of pressing buttons: "Does this man own the animal that he says he has? How long has he had it? What kind of animal is it? Does he qualify for the premium? Pay him". So we can make half the number of inspections. That is already foreseen in the legislation. Also, if you know the man's situation, you can decide, according to the rules, how much premium he should receive without him having to fill in all of the necessary documentation. But that requires a rather high level of assurance vis-a-vis the data in the database. My work takes me to all member states, to farms in member states in all parts of Europe. The reality is not always reflected by what is actually in the database, although several member states are coming very close to that situation. In that situation, we can press buttons and pay the man what he should receive without him having to fill in forms. Could I just say one thing on the question of the UK? I want to compliment, and I have been complimenting for some years, the UK's very thorough scheme instructions to both its controllers and its farmers. I have seen them all; I have read them all; I have had to translate some of them, of course. But I would say that the UK scheme's instructions to the key players who are, for me, the farmers and the inspectors are of a very high calibre indeed and for ever being upgraded and improved. I compliment the authorities on that.

  141. So a lot of that will depend eventually on electronification and moving from applying for support to a sort of automatic entitlement to support?
  (Mr Slade) Already next year, that will be the case in some member states.

Mr Mitchell

  142. You said, "We can halve the number of inspections". Who are you talking about? Are you talking about the Commission?
  (Mr Slade) No, certainly not the Commission. If anything, we are under pressure to increase. I am talking about the national authorities, the control arms of the national authorities. At the moment, the minimum control inspection level is 10 per cent for animal premiums, that is sheep and bovines basically. That is the on-farm inspection rate selected on the basis of risk analysis. For arable crops, it is 5 per cent. For the bovine premium schemes, the legislation already foresees that where a member state has a fully operational database in the audit context, that is where the database reflects pretty well the reality, then member states can already reduce the number of inspections they make from 10 per cent to 5 per cent of farmers per year. At the moment it is per scheme. We can go into other areas of simplification if you like. So it is the national authorities.

  143. You say that for simplification and greater efficiency, the proposal is to make the data electronic. But that does not answer the question, really, on the complexity of the form. You are a Brussels bureaucrat. Your interest is in saving European money and doling less dosh out, detecting failures in the system which have to be penalised by withholding money, is it not?
  (Mr Slade) I would not put it that way.

  144. So it is in your interest to have the form complicated and complete so you have more information because that is what a bureaucracy needs, is it not?
  (Mr Slade) I must stress that that is absolutely wrong. It is wrong. I do not agree. My role is to enforce the rules that all member states have agreed to and have voted for and I do that with vigour. I work in accordance with strict guidelines and procedures which have been built up for more than the 20-odd years that I have actually been doing the job. So I certainly do not agree. The fruits of my work and that of my colleagues, I cannot take all the credit, is clear from recent Court of Auditor's assessments of the situation in agriculture, in particular, where it finds that the error-rate on farms on IACS-managed schemes is about half of that managed in the context of public storage export refunds. They are a higher risk area, of course. But I like to think that we have got things under control. If you talk about my job in the wider context, the veterinary aspects are very important. To get all animals identified and registered on databases and identified on farms has become suddenly very important in the last five years, as opposed to the five years before. So there is an aspect of this in deciding Council Regulation 820/97, the veterinary bovine identification registration, the Council made a declaration that it wanted the Commission to use the premium schemes, and therefore the IACS schemes, as a means of enforcing the achievement of this identification registration. On the subject of forms, we want this easy, simple system of notification by farmers through the database with the minimum of data other than the sex of an animal, its race, its breed, maybe its colours, but that is an optional thing, so that things can be simplified. The data will be held in the national databases. I must stress that these are national databases. This is not a Community database. There is no link up between the databases in the member states. I have access to all of them, of course, when I make my missions but that is to gain information as to the reliability of the systems. So I am not interested at all in very heavy complex schemes. I swear that this is true that if it is one-page claim and it has all the necessary details with the necessary clarity, I am satisfied from a legal point of view. I could say, "Well, you could check what he had last year and what he envisages for next year", but that is not my interest. I am interested in how much he is claiming, whether it is a legitimate claim and whether he should be paid. The simpler the better for me.

  145. In saying that, you are endorsing the very simple, straightforward Irish form, two pages, either side, which is to me very straightforward, over the complex British form and the even more complex French form. The latter provide far more information for control and checking, do they not?
  (Mr Slade) Yes, but not always only in the context of the premium schemes. It depends, you may be interested in your own national programmes. I limit myself to the key parts of the forms that interest me from an audit point of view. It may be that you have national programmes running that are very important also in some way or another, or national census figures for statistical purposes, for economic planning, for veterinary purposes.

  146. But for your purposes, the simpler the form, the better?
  (Mr Slade) Yes, I agree.

Mr Öpik

  147. On that same point, on what time scale do you envisage codification of the process and what does that codification look like to you?
  (Mr Slade) In the context of regulation, I have a colleague, a full-time legal colleague, in our unit who is working on the codification of the 3887 regulation, the Commission regulation. We will be presenting next week, at the first IACS expert group of the year, and there will be three, probably four, we will be putting down our conceptual ideas without a strictly legal text at this stage. Producing a legal text requires us to consult with member states and at least get their first impressions on what they think of our ideas. The ideas that we are now putting forward as our own have already been proposed by member states, in particular the French presidency last year, supported by MAFF, by the UK authorities and a number of other authorities. So we are codifying the regulation. I think that by the end of this year regulation 3887 will not be called 3887 any more. We are trying to make improvements. Over the eight or nine years, pieces have been added on and taken off. It is a little bit of a muddle. We have tried to sort it out two years ago but we were not fully successful in the clarification stakes. So we have taken on board some ideas. The Agenda 2000 has meant that we have had to take on board new concepts. Agenda 2000 introduced, particularly in the bovine premia area, three, if one includes the national envelope, new schemes and some of those schemes had variations. I could say here and now that Mr Fischler already gave his okay on this that we would be simplifying in the area that I have just outlined, in particular with a view to reducing the requirement from an on-farm inspection level per scheme to an on-farm inspection level full stop. That means covering, if possible, all of the schemes.

  148. That would also imply, would it, that you would be working for a single administration?
  (Mr Slade) Yes, indeed. There again, the different premium schemes have different retention periods. The retention periods, the way that is set up and the number of claims a person could lodge is decided by the national authorities. The trick is to integrate them so that one control or farm can cover several schemes, if not all. Our regulation already provides for this. But it is for the national administrations to adapt their traditions, their procedures in accordance. And it is not always easy, of course. Farming practices in Scotland differ from those in Sussex, for example. The timing of claims is seasonal, as you know. So we are moving in that direction—the paperless system, the all-encompassing risk analysis and control regime. The reduction of the number of inspections and controls in abbatoirs for the slaughter premium is a prime objective also. All of this is in the context of a codified scheme. Where we are having problems, and where we always have problems, is the simplification of sanctions because unfortunately, for every market measure involving 1 billion euros in expenditure, we are called upon to create a practical, common-sense control and to gain agreement on those controls from 15 member states and for each control to have suitable, fair, proportionate and staged sanctions in the regulation. We are aiming for at least clarification of the sanction scheme. We are not really in the business of slackening sanction regimes where we do not think that we can do that. We are there to take account of any risk to the fund and any irregularities have to be taken account of in the sanction scheme. You asked about the timetable. We have the experts group next week. Throughout the year, we go onto another two, maybe three, experts groups with a view each time to moving forward so that by the end of the year, we have a new, more streamlined, more efficient, more effective, hopefully, regulation to take into 2002. Some member states, I know, will already be in a position to take advantage of it but not all. The problem we have at the moment is that we are at risk of having a two-tier system—the old-style system, heavy on paperwork, heavy on inspections for those member states that do not have the electronification necessary and in the smaller, less financially important member states, Scandinavia, Austria, that is a problem, going onto the faster track with more efficient systems.

  149. You said that, in a way, it is up to national administrations to decide that but from what you are saying, it is quite clear to me that strategically, you might encourage that to take place?
  (Mr Slade) Yes.

  150. On a related matter, one of the main proposals is the smaller farmers scheme which has not been a run-away success perhaps because the threshold of 1,000 euros was too low. Do you have a view on that?
  (Mr Slade) That is not within the competence of my service. There is another unit which is responsible for that measure. We are consulted as regards control because, once again, we have a simplified scheme, the idea being to reduce the burden and it is to reduce the burden on the farmer, not on the national authorities and do we leave these people with only three cows in their corner? During the present climate, that is possibly not a starter. In fact, I would like that struck off the record. But the small farmers scheme naturally entails a serious consideration in the context of control of the overall package from the veterinary aspect point of view. But it is not for me to say.

  151. Are there any particular control issues that that scheme would raise?
  (Mr Slade) Yes, there are. The question is whether the quota for the animals concerned be blocked; should they be taken out; should small farmers be allowed to buy and sell regardless. As you have probably gathered already, I am more of an expert in the animal field than the arable crops. I think it is designed more with a few member states in mind than global application throughout Europe.

  152. How did it apply specifically to the UK?
  (Mr Slade) The UK is not famous for having so many small farmers and 1,000 euros is very, very low. I cannot imagine that it would be implemented in any but the furthest corners of the UK, generally speaking. I cannot think that it would be of great interest in the UK. There is a need for instructions, for forms to be filled in some way, contracts to be drawn, a payment system to be designed and a monitoring system, albeit at possibly a low level. My colleagues have been giving it thought. Both my legal colleague and my control expert colleague have been in consultation with the unit responsible. We are involved. It is a D-G Agriculture policy and Mr Fischler is keen on it. A lot of discussions are still going on internally and, of course, in Council, in Council working groups last week or two weeks ago. It is ongoing.

  153. Are you discussing the level?
  (Mr Slade) I guess that that is one of the issues that is being considered but I am not privy to whether it would be increased. To some extent, the general feeling is that 1,000 euro is rather low.

Mr Mitchell

  154. The electronic system depends on accurate reporting. In which countries is it more difficult to enforce? I would imagine that where agriculture is on a big scale and farms are highly organised, it is going to be easier to have such a system. For example, one hears about German car workers having three cows in the backyard or there is small-scale peasant agriculture in some of the south European countries. I remember hearing 15 years ago about counting olives in Italy from aerial photos to make sure that people were not claiming for olive trees that were not there. In which countries is it going to be more difficult to enforce and where is it going to be easier?
  (Mr Slade) The olive oil regime is going to be brought into IACS. We have an expert, I do not seem to be an expert in anything but I run the experts, in geographical information systems and he plays quite a big part now in the so-called olive oil regime. Yes, this is for internal use. It is called the diagnostic traffic light. It was an idea of our former director when he was thinking about how we could give our director-general a glimpse. He has got five seconds to see how the controls are going in the member states. We were asked to produce this. It depends on individual evaluation. This is the arable crops and underneath is the animal premia. Arable crops are essentially broken down into administrative controls, field inspections, applications of sanctions, with all the relevant expenditure on the side here. We were asked to give if (1) the system was generally an adequately controlled environment, which is green; orange, weak controls but improving, and there is the orange; and red, poor controls, no improvement or, in fact, retrograde steps. It is a bit of a tease to show you this at a distance but it is a glimpse. Obviously, there is much more behind this other than the one page. But if you want to see a one-page thing, how things are going, the mainly greens here, this is Austria, Sweden, Netherlands, although I would have possibly downgraded them myself.


  155. What is the big red wodge at the top?
  (Mr Slade) It is not a million miles from Greece and there are other red dots around. Yes, there are real problems but as I mentioned in my opening gambit, the job of my service is to assess these systems, and we do not do it reluctantly, and to apply financial consequences to areas where the rules have not been respected, in particular in control areas. Any way that you can get the information would show that Greece is nearing the top of the list relatively in terms of financial consequences.

Mr Mitchell

  156. Some countries have more difficulties, have they not?
  (Mr Slade) Yes, whether it is the UK, whether it is big farming operations, it is still the volumes of ID numbers that have to go into, the digitisation of the land, the surfaces that have to go into the database in the first place and, at a certain level, be controlled or, if it is in Baden-Wu­rttemberg, I was there last year and as you said, every dentist, newsagent and tobacconist has two or three cows and yes, there is a problem getting all of this data into the database. The green shows that countries like Austria, around the rim of the Alps, they are on the plains. They can register. They have traditional systems already in place and they have adapted, as have the Scandinavian countries, of course. But we are talking in terms of fewer animals, fewer variations in crops, fewer surfaces for cropping. One of the complications in the UK, for example, I would not call it a problem, similar to Ireland and France, is that the big beef producers, extensification premia, lots of grass, you have a lot of common areas. I was very surprised in the statistics I received two years ago from the Yorkshire, Northallerton, regional service centre at the time, 24 per cent of the forage area was on common land which has to be divided up between the farmers and controlled and monitored in an administrative type of way. Nevertheless, the movements have to be monitored up and down. And likewise in Ireland. So yes, they are big operations but they may be using half of Dartmoor. Without making things over-burdensome, and I agree it is not easy, but generally we have been satisfied with the way it has been controlled and since then it has been computerised or MAFF was in the process of computerising that information at the time so that the rights to graze a certain hectarage of forage would be already held in the database for future reference because these are historical, traditional rights which have evolved over centuries.

  Chairman: Perhaps I may make an anecdotal intervention. About 25 years ago, when I was in the European Parliament, I complained to the German Finance Minister about the problem of Bavarian car workers who went home to milk three cows to which he said, "David, let me tell you, the German car workers who go home to milk three cows make damned sight better cars".

Mr Mitchell

  157. I think that is an insult to British Leyland workers who maybe went home and tinkered and rebuilt cars in their back yard, which is far more relevant to car manufacturing. Perhaps I should move on. The NFU told us that gathering information on how other member states operate IACS has been of immense difficulty. Despite the system having been in place for almost 10 years, the information available from other member states is scant and shrouded in secrecy. Why is that? Why does the Commission not spread its information about?
  (Mr Slade) I really cannot answer why the Commission does not do that. I can tell you why we are somewhat reluctant. As the Commission service that knows most about what is happening in reality in practice in the member states, the problem is that we have this other function. We do not only monitor and supervise the IACS. We punish member states who do not apply it properly. Of course we have always got cases permanently ongoing so for me to mention Greece here is a little bit risqué because we have cases involved. To be fair and in accordance with our procedures, we have to take account of the stage of the procedure, the cases that are being discussed to make sure that all member states get a fair hearing.

  158. Would you accept that some states are secretive about their business?
  (Mr Slade) It is not in many member states' interests to tell me, "We have not completed this, that or the other yet", because I will say, "Well, here is the bill". It is my job to dig away and get to the bottom of things.

  159. That is to you but not to other member states?
  (Mr Slade) That I can well imagine. There have been some contributions from some member states, I think; Germany, for example. I was in Germany two weeks ago on their latest database. Some member states have much to be proud of. The Germans will be very keen to show you, to tell you about and to invite you over to see their latest what they call the "hit" database for the bovine premium schemes. It is state of the art. Of course, the Germans were a little bit late in implementing but they have taken advantage of the latest technology. The Scandinavians, who were in quite early, because of the low numbers of cattle, and that is the fact of it, their technology is not quite up to taking account of all of the new premium schemes, for example. I am sure that the Germans would be very happy to tell you about it. In some countries, the federalised, regionalised structure of their countries prevents the central authorities getting totally adequate and complete information. That is a fact. In Germany and Spain, it is a problem for the federal authorities. Some do it better than others and in some years they are more successful than others. But I have the problem of harvesting information from 15 member states. They already have 15 paying agencies within the boundaries of their own territories so sometimes their information is rather incomplete. You will see that from the statistics that I am going to give you. In some member states, we have just had to cross them off because we find the information unreliable or they simply have not yet been able to give the information even to us, and we have a right to demand it. Things do not run perfectly, do not run smoothly anywhere. But I am sure if you look around Europe, there are good aspects in all member states. Those are the parts that they would be very happy to talk about.

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