Official Report: Minutes of Evidence

The Chairperson (Mr Irwin): I welcome from the Department of Agriculture and Rural Development Pauline Rooney, director of the EU area-based schemes division; Ken Laverty, deputy principal in the operations and policy branch of the EU area-based schemes division; Julian Henderson, senior principal veterinary officer; and John McConnell, deputy principal in the animal identification, legislation and welfare branch. You are all very welcome. I ask you to give a presentation of up to 10 minutes, and we will then ask some questions.

Ms Pauline Rooney (Department of Agriculture and Rural Development): Thank you, Chair. The previous time that I spoke to the Committee on cross-compliance was on 26 May. At that time, I committed to come back to the Committee to report on the outcome of an EU cross-compliance conformity audit that was to happen the following week. I also committed to undertake a review of the thresholds for tag loss in cattle once the audit had been completed. I want to brief you on both those issues today.

The purpose of the audit was to check DARD procedures and processes for compliance with the requirements that are laid out in European legislation governing cross-compliance across the years 2013, 2014 and 2015. For the most part, the auditors were satisfied with what they found, describing the systems as robust and trustworthy. However, they did identify six areas in which they perceived compliance to be weak. Those were confirmed in their letter of observation and are set out in annex A to the papers that have been provided to you.

The first three issues that were raised have already been addressed. The non-compliances identified relate only to the periods before we introduced changes, and the auditors were satisfied that the controls that are in place now are in line with regulation requirements.

One of those, the thresholds for tag loss in cattle, is the issue that you asked me to review. During the audit, we specifically raised it with the auditors and sought their views on our interpretation of the guidance and the potential for easing from the current position while maintaining compliance with regulatory requirements. The auditors indicated that a relaxation might be acceptable. We considered that and developed a proposed revised approach, details of which are set out in annex B to the papers provided. The revised approach proposes to replace the existing thresholds from 1 January 2015 with a threshold of 15% of animals in the herd. That means that, for the 2015 year and from this point forward, we would apply a cross-compliance penalty only for animals with one tag missing if the percentage number of animals in the herd with one ear tag missing were above 15%. For herds that fall below that threshold, we would issue a warning letter under the cross-compliance early warning system provisions. That would not result in the application of a penalty unless the claimant failed to replace the missing tags within 28 days of inspection. The issuing of a warning letter in those circumstances is supported by the EU Commission guidance document on the issue and is consistent with the approach being taken in the Republic of Ireland and Scotland.

The Commission has notified us of its intention to apply disallowance penalties for the six issues identified in annex A. However, it will be some time before the full financial implications of the proposed disallowance are known. If we fail to act on the audit findings, the Commission will continue to apply disallowance to future years, with the potential for that to escalate if there is inaction. Therefore, to avoid further disallowance, it is essential that we take action to address the issues that have been identified and bring procedures into line with Commission regulations and guidance governing cross-compliance. We want to implement changes from 1 January 2016.

We are considering how we might address the outstanding issues. For statutory management requirement 7 (SMR 7) late notifications, we need to look at how we build in checks to inspections to take into account late bovine notifications in the animal and public health information system (APHIS) back to the start of the scheme year.

For SMR 8, we need to look at how we check for compliance with sheep and goat identification requirements. In doing that, we will be taking into account the approaches adopted to address those issues in neighbouring regions. We have drawn up detailed proposals and recently engaged with industry stakeholders to get their views on them. We will take their feedback into account when finalising the proposals. We will need to inform the EU Commission of our proposed changes and await its views on them ahead of implementation on 1 January. Ahead of the introduction of any of the changes, we will undertake a publicity campaign to make farmers aware of them and their implications.

Audit finding 6 relates to the Commission's view that a requirement to report sheep and goat movements should fall under the scope of cross-compliance. We do not consider that as being covered by the cross-compliance regulations, and that is the position held across the UK. The UK has already referred the matter for review to the European Court of Justice. Until there is an outcome, we do not propose to take action to address the issue. We will revisit our position in due course.

I know that the Committee also had an interest in the Agri-Food and Biosciences Institute (AFBI) cattle tag study, and I will give you a brief update on it. The cattle study is one part of a broader project, which also includes a field trial of several types of sheep tag and a study on whether tissue sampling tags could be useful for the purposes of genetic monitoring of livestock. The cattle tag element is exploring whether APHIS data on the number of replacement tags issued to keepers could be of value in allowing action to be taken to reduce tag loss. The project is nearing completion. However, AFBI is considering whether some further work could be useful in providing further clarity around some of the findings so that they will be as helpful as possible to DARD and the industry. When DARD has the final report, we will work with the industry to consider how best information can be made publicly available to help keepers improve tag performance on their farms. DARD also intends to respond to the findings by taking steps to improve tag performance; for example, by recording on the database the model of the tag that is supplied in future, rather than just the supplier.

We know that the findings will come with some caveats attached. That will restrict the way in which they can be applied. For example, it is unlikely that the study will support the removal of a particular tag's approval. That is because the study is using APHIS data about tag suppliers rather than tag models, as the model of tag is not recorded on the database at present. It is also because the study relates to tags applied to calves in 2007, and the models of tag and the suppliers may both have changed in the interim. We do, however, envisage that the research may allow the industry and DARD to work together to improve tag retention by supporting a better approach to identifying and addressing poor tag performance when it occurs.

In conclusion, I thank you for your attention, and I am happy to answer any questions that you have on the briefing that I have provided.

The Chairperson (Mr Irwin): Thank you very much for your presentation. As someone who has had big concerns with the previous allowance for tags for cross-compliance, I can say that this is a big improvement and should address most of the concerns that I had.

One main concern that I do have is this: you propose to backdate that to 1 January 2015. What about the farmers from the previous year who were fined for not meeting cross-compliance? In effect, under the guidelines, they should not have been fined.

Ms Rooney: You are right, Chair. When we were drafting the papers and getting them ready, we were concentrating on this year and future years, but we can do that and will do that. That will be one year back, to 2014, when it was introduced.

The Chairperson (Mr Irwin): You will address that.

Ms Rooney: Yes.

The Chairperson (Mr Irwin): That is certainly a big improvement, and I welcome that. [Laughter.]

It is not often that I say that.

Mr Poots: The Chair is happy. You are all right.

The Chairperson (Mr Irwin): It certainly is a big improvement, and I do not think that we cannot do anything but welcome that.

Mr Swann: Pauline, you said that you were going to start recording the model of the tag as well as the manufacturer but that you did not see at any stage the type of tag being delisted —

Ms Rooney: At the minute on the database, I think that it is only the supplier that is recorded. Therefore, it is not the manufacturer as well. It is something that we probably will record, because it is much more valuable information than just having the supplier.

Mr Swann: Why would you be doing that if you were not looking, at some stage, to delist a type of tag?

Mr John McConnell (Department of Agriculture and Rural Development): One of the things that we learned from the AFBI research that was done about the quality of tags is that we need to record the model. We need to know, if a tag falls out, which model of tag fell out so that, over the long-term future, we can monitor the quality of tags and their replacement rate. We will then be in a position to have evidence that we can use to take action if we need to do something as drastic as delisting tags.

Mr Swann: If it gets to a stage at which the Department is listing the model and manufacturer of a tag, are we looking at the possibility of a farmer being penalised for having the wrong model of tag?

Mr McConnell: No, you will be able to buy only the tags that are approved by DARD in future. Tag suppliers —

Mr Swann: I am talking about when you put them on to the database. If a farmer puts on the wrong model and the DARD inspector comes out to the farm and says, "That's a different model from what you registered", will a penalty be applied?

Mr McConnell: No, tag suppliers will not be capable of supplying tags that are not approved, so —

Mr Swann: Yes, but I am talking about the database. If a farmer inputs the wrong type of tag —

Mr McConnell: Sorry. The tag supplier rather than the farmer will upload that to APHIS.

Mr Swann: Is the farmer liable for the penalty if the supplier inputs it wrong?

Mr McConnell: It would not be wrong. That is something that —

Mr Swann: Why would it not be wrong?

Mr McConnell: That is something that will be taken care of by the software.

Mr Swann: That is now in Hansard.

Mr McConnell: It is not a risk to the farmer. That will be fine, because that aspect of the records is kept. Anyway, it is not a cross-compliance element, so it is fine.

The Chairperson (Mr Irwin): OK. No other members have indicated that they wish to ask a question. That is a good sign. Common sense has certainly prevailed. Thank you very much.