Select Committee on Public Accounts Third Report

2 Raising the standard of flock records and flock markings

12. Flock records and flock markings are key controls required by the EU for the identification and verification of claimants' sheep. The disallowance of sheep premium imposed on the UK between 1993 and 1996, by the European Commission, was due in part to poor flock records and markings. The Department has issued guidance to farmers in recent years setting out the requirements on flock records, including a warning that, "if you fail to keep records or do not allow officials to inspect your records… you will lose all of the premium".[13]

Improving flock records

13. On a farm visit, inspectors are required to verify that proper flock records are kept. The C&AG's report noted that, while accompanying the Department's inspectors on 26 farm visits, his staff found a high proportion of cases where flock records were either poor or non-existent. We asked why, seven years after the European Court of Auditors reported that flock records were in a lamentable state, there appeared to have been little improvement. We were told that the Department had been acting under a misunderstanding that, if an inspection was unannounced and carried out during the retention period, flock records were not that important.[14]

14. It is difficult to see how such a straightforward requirement could be open to misinterpretation, especially as the EU had told the Department in 1994 that its records were not up to scratch. We are left with the impression that this is one more example of tardiness on the part of the Department in its administration of the Scheme. It is utterly pointless to instruct farmers to maintain proper flock records and threaten to penalise them for non-compliance, but then fail to check and enforce the requirement. It is clear that the Department needs to get a grip on flock records and demonstrate to farmers that any failure to comply with the regulations will no longer be tolerated. Ignoring EU requirements is not an option.

15. The Department's view of flock records was that they do not give a high level of assurance as to the existence of sheep and that a headcount is therefore a better check. However, a headcount only provides a snapshot, with no assurance as to the position throughout the rest of the retention period or, indeed, the date when the claim for premium was submitted. We regard flock records as an important control, with benefits over and above sheep annual premium—for example, they are a key source of information during disease outbreaks, as was demonstrated during Foot and Mouth in 2001. Because of these wider benefits, checks on flock records should not be confined solely to the retention period, but should take place throughout the year.[15]

16. Where a farmer is unable to produce his flock records at inspection, the Department gives him a further 10 days in which to submit them for checking. We pointed out that this provides an unscrupulous farmer with the opportunity to falsify his records and obtain bogus back-up documentation. The Department responded that there was little more it can do in these circumstances. It seems to us that the Department's system of checking flock records is rendered completely useless by allowing a delay of up to 10 days to complete the check.[16]

17. The Department did tell us that it was taking legal advice to establish what is reasonable in terms of giving people time to produce records. If necessary, the legislation would be amended to enforce this. We find it hard to envisage many circumstances where the flock records would, legitimately, not be available at inspection. If the situation did arise, it should be very much the exception. In our view, the Department should make clear that it is up to farmers to ensure that their flock records are held on the farm and are available at all times for inspection. Failure to comply should result in some form of sanction.[17]

Improving flock markings

18. Flock markings is another control measure where the Department appears to have paid scant regard to the findings of the EU auditors in 1994. The C&AG's staff noted, while accompanying the Department's inspectors on the 26 farm visits, that sheep had not been properly marked in 50% of the cases examined. The Department told the Audit Office that it did not regard flock markings as a key control because they were not unique and simply provided supplementary information. We recognise that the system of flock marking is not foolproof, but it can provide added assurance at inspection, as a counter to the fraudulent 'borrowing' of sheep. As with flock records, the Department needs to send a clear message to farmers that flock marking is obligatory and failure to comply with the regulations will no longer be tolerated.[18]

Introducing sheep tagging

19. The Department intends to introduce the individual tagging of sheep. This follows the recognition, in the wake of Foot and Mouth, that it needs to be aware of all animal movements. We welcome the Department's decision, although the timetable for implementation appears to be open-ended. The Department explained that there has been a delay while it waits for the EU to come up with proposals on how tagging should be handled throughout the Community. While we recognise that there could be some advantage in waiting for EU guidance, we are concerned that the resulting delay means that it may be some time before a system of tagging is fully developed and operational.[19]

13   C&AG's Report, paras 2.16-2.20 and Appendix 2 Back

14   Qq 43-51; C&AG's Report, paras 2.21-2.24 Back

15   Q 77; C&AG's Report, para 2.24 Back

16   Qq 117-125 Back

17   Qq 125-126 Back

18   C&AG's Report, paras 2.23, 2.29 Back

19   Q 78; C&AG's Report, para 2.30 Back

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