IFA this week got confirmation from the EU Commission that reduced penalties for over-claims, a yellow card system and preliminary checks on area aid applications will apply for 2016 Direct Payment applications.
What changes will apply?
All farmers will start with a clean sheet in 2016 with regard to new regime on tolerances.
Under preventative preliminary cross checks of area aid applications, problems with applications will be identified early and farmers will have up to 35 days after the final date of submission to make corrections without any penalties
Yellow card system
As part of a yellow card system, a farmer who makes a first time mistake on an application will have the penalty applied reduced by 50% (if the over-claim is 10% or less). Their application will be checked in the following year and if everything is in order, there will be no further sanctions. This check will be mainly by remote sensing.
Reduced penalties for direct payment schemes
Where an over claim is greater than 3% and less than 10%, the sanction will be 1.5 times the over claim. In addition, a 50% reduction in the administrative penalty (to .75%) will apply for ‘yellow card’ first time over-claims that are between 3% and 10%.
In the case of farmers where the over claim is greater than 10%, the 1.5 times the percentage over claim will apply – previously where the over claim was over 20%, farmers lost all of their payment.
Small over-declarations that are up to 3% of the area declared or 2 hectares will not be penalised.
Example 1 (overclaim between 3% – 10%)
A farmer declares 33ha but only 30ha found
Under the current system:
Payment is on 30ha found, reduced by twice the difference = 3ha x 2 = 6ha
Farmer is therefore paid on 24ha
Under the new system:
Payment is on 30ha found, reduced by 1.5 times difference = 3ha x 1.5 = 4.5ha
Farmer is therefore paid on 25.5ha
If over-claim is found for first time, payment is on 30ha, reduced by .75 times difference = 3ha x .75 = 2.25 – the farmer is therefore paid on 27.75ha
Example 2 (overclaim greater than 10%)
Farmer declares 50ha but only 40ha found
Under the current system
A 100% penalty is applied and farmer receives no payment
Under the new system
The Farmer is paid on the 40ha found, reduced by 1.5 times difference = 10ha x 1.5 = 15ha
The farmer is therefore paid on 25ha