The financial penalties applied to Welsh farmers for minor mistakes while filling in complicated application forms for single farm payments and other EU schemes have shot up by 175% to over £2m a year, the Farmers' Union of Wales has discovered.
Last year, 1,358 farmers in Wales lost a total of £2,156,237 compared to £783,470 by 1,133 farmers in 2008, £1,035,042 by 1,789 farmers in 2007 and £855,398 by 1,923 farmers in 2006.
"We have significant long standing concerns regarding the proportionality and circumstances in which financial penalties are applied to farmers due to mistakes on paperwork or insignificant breaches of EU regulations relating to the Common Agricultural Policy, and the past twelve months has seen a significant escalation in the level of penalties applied," said FUW president Gareth Vaughan today.
In light of these concerns he recently wrote to the National Assembly for Wales's rural development sub-committee chairman Rhodri Glyn Thomas, urging the committee to look into the issue of penalties applied to farmers.
"Examples include families affected by personal tragedies losing significant sums due to minor errors on paperwork, despite these being the direct result of exceptional circumstances, and farmers losing their entire incomes for periods of more than a year due to inadvertent minor errors being made while filling out complex forms," wrote Mr Vaughan.
The FUW also raised its concerns at a meeting with Welsh Assembly Government officials who made it clear that EU auditors had insisted that the level of penalties should be increased.
"It therefore appears that EU auditors are acting disproportionately by failing to allow the Welsh Assembly Government to act reasonably," said Mr Vaughan.
After receiving Mr Vaughan's letter, Mr Thomas wrote to rural affairs minister Elin Jones seeking an explanation. In her reply, she released the latest figures and confirmed "the total cost of penalties has increased significantly in 2009" due to cross-compliance penalties.
She explained the increase results from changes to the Welsh Assembly Government's system following an EC audit in December 2008 which criticised the level of financial reductions for cross-compliance breaches before and including 2008.
"The penalty system now meets the audit and regulatory requirements that, as a general rule, negligent breaches must be penalised at 3%," she added.
Mr Thomas has now told Mr Vaughan the sub-committee will investigate how the application of the rules in Wales compares with other EU national and regional governments.
"If the research shows that the Welsh Government is applying the rules more strictly than other governments, and that farmers in Wales are receiving bigger and more numerous fines than those in other countries, then the sub-committee will consider whether we need to carry out an inquiry into the matter," Mr Thomas added.
Mr Vaughan said: "We are indebted to Mr Thomas and his committee for having taken up this issue and I now look forward to seeing the results of their further inquiries.
"In the meantime, farmers should be under no illusions regarding the financial consequences of even the most minor mistake.
"Check, double check and triple check everything which relates to Cross Compliance and the Single Payment, and do not assume that commonsense or proportionality applies.
"Even the most minor error, such as a tick in the wrong box or being a day late retagging animals, can result in massive financial penalties."