BUSINESS OPINION: Let's talk about sheep. For those of you interested in such things there are 4,880,400 sheep living in the Republic. This figure comes from the December livestock survey published by the Central Statistics Office last week.
The survey is conducted every December and involves the CSO writing to 30,000 farmers and asking them in confidence how many sheep they own.
In order to encourage the farmers to tell the truth the CSO promises that it will not pass on the information to any third party, including the Department of Agriculture. As a result the survey is generally accepted as accurate and its figures used by Eurostat, the statistical service of the European Commission.
What the livestock survey does not measure is the level of fraud perpetrated by sheep farmers. To get this figure we have to carry out our own rather crude analysis.Our point of departure is the sheep cull carried out on the Cooley Peninsula last April after foot-and-mouth disease broke out. When all 276 flocks on the peninsula had been culled it emerged that more than 6,600 ewes on which headage premiums had been claimed were nowhere to be found.
It was also revealed that 17 of the claimants had no sheep at all, 51 of them had seriously over-claimed and another 100 or so were unable to produce all the ewes for which they had claimed.
The number of ewes for which Cooley farmers had made false claims was 18 per cent of the ewes for which claims were made. If we assume that farmers in the Cooley are no more or less corrupt than farmers anywhere else, we can extrapolate to get a bogus claim figure for the Republic as a whole.
According to the Department of Agriculture, €100 million (£78.8 million) was paid in ewe premia in 2000, which suggests fraud along the lines of €18 million. Put another way, only €82 million of the premiums paid over in respect of 2000 was for ewes that actually existed. Funnily enough, if you multiply the number of eligible ewes that the CSO livestock survey says were in the Republic in December 2000 by the maximum premium payment of €24 you get . . . wait for it . . . €85.8 million.
Students of history will now start running for their copies of the Beef Tribunal report. They will remember that one of the things that got the ball rolling there was the "discovery" that the Government was giving export credit insurance for beef exports that exceeded the annual beef exports of the Republic as calculated by the CSO.
Drawing such a comparison is entertaining but a little over dramatic. The Department of Agriculture points out that the CSO Livestock Survey classifies one million sheep as "others" rather than ewes. Some of these others could still qualify for the ewe premiums according to the Department.
Quite how many of them qualified the Department could not say, but you would have to add back pretty much the whole one million before you could reconcile the Livestock Survey with the 4.3 million ewes on which the Department paid out in 2000. According to the CSO the "others" category is for ewes and rams that are to be culled and young sheep intended for the breeding flock.
On the other hand, the €24 per ewe premium is the maximum figure and only applies to farmers in disadvantaged areas. If you were to use a lower average figure in the calculations you would get an even bigger discrepancy between the Department's figure and the figure based on the Livestock Survey.
What cannot be disputed by the Department is that there is widespread, low-level fraud in the sheep industry.
The real question is not so much how much has been stolen, but to what extent did the State turn a blind eye to it. History students will now start seeing parallels between what is going on in the sheep industry - and one has to suspect in the beef industry as well - and what went on in the banking industry with respect to Deposit Interest Retention Tax in the 1980s.
It is stretching credulity to think that the results of the Cooley cull came as a bolt out of the blue to the officials in the Department of Agriculture. One would have to suspect that - as was the case with DIRT fraud - the Department was aware of the problem but was not aware of any political will to face up to it.
Like DIRT evasion, premia fraud is a victimless crime. The losers are - or at least were - the German tax payers whose contributions fund the Common Agriculture Policy.
The similarity does not stop there. The perpetrators of the fraud are, in the main, ordinary citizens and the amounts involved only run to a few thousand per fraudster.
It is only when you add all the individual amounts up and realise that it has been going on for years, if not decades, that you come up with the sort of headline grabbing numbers that spurred the Public Accounts Committee into action over DIRT.
In the same way - and one suspects for the same reasons of political expediency - that successive ministers for finance dodged the issue of DIRT evasion until it became impossible to ignore, the various inhabitants of the ministerial suite at the Department of Agriculture have not afforded ewe premiums fraud any real priority until now.
The Department of Agriculture is answerable to the PAC and the subject is worthy if its attention. It could if it wished get stuck into it before the Dáil broke up for the coming election. A good starting point could be the investigation into 36,000 rural voters . . . sorry . . . sheep farmers . . . carried out by the Department on foot of the Cooley cull, which is supposed to be near completion.
