Ireland is among four EU states which paid out too much compensation for the destruction of animals during the outbreak of foot-and-mouth disease, the EU Court of Auditors has said in a report to the European Commission.
While the amount overpaid is yet to be determined, the Court of Auditors has said that the EU will only pay less than a third of the levels of compensation which were sought by the UK, Ireland, France and the Netherlands.
In its report, the financial watchdog of the EU said an ongoing audit of the costs involved in the four countries hit by FMD in 2001 had led to a claim for €1.6 billion from the EU's Emergency Veterinary Fund.
"The four member-states hit by the 2001 epidemic spent a total of €2.7 billion on compensation to farmers and other contractors involved in the work plus on other eradication measures, such as decontamination of farms," it said.
"They asked for €1.6 billion of this to be covered by the EU's Emergency Veterinary Fund. The amount actually paid by the EU, however, is likely to be considerably less than this," the report continued.
"Scrutiny and audits by the Commission have revealed a number of instances of member-states paying too much compensation. The audit will soon be finalised," the report said.
"However, already at this stage it is clear that from the €1,063 million requested for compensation for the destruction of animals, the EU budget will only pay €475 million," the report added.
In its comment on the Court of Auditors' report, the Commission said it was in the process of revising the rules governing the EU's Emergency Veterinary Fund.
However, it rejected the report's call for harmonisation of national compensation systems and said this was neither realistic nor desirable as the market value of animals can vary significantly from country to country.Current EU legislation sets compensation at the market value of the animal in the relevant country on the day before discovery of the disease.
It also said that the court's proposal that compensation be denied to farmers suspected of not complying with EU veterinary rules was not legally workable as compensation and penalties are treated as separate issues under EU law. In addition, the EU Veterinary Fund pays money to national governments and not to individual farmers, the Commission said.
A report published by the Irish Department of Agriculture and Food in March 2002 found that foot-and-mouth disease cost the Exchequer € 107 million, of which €44 million was spent by the Department of Agriculture and Food, €50 million in Garda costs and €13 million to promote tourism which lost €210 million in the first six months of 2001.