State pays out €130m in pigmeat dioxin scare

 

MORE THAN €130 million has been paid by the State to the pigmeat industry in compensation for the dioxin contamination scare of 2008.

The Oireachtas Committee of Public Accounts, which was given the figure yesterday, was also told that one-third of the cost of Garda compensation cases in the past two years went on legal fees.

In December 2008 the Food Safety Authority of Ireland ordered the recall of all Irish pigmeat products slaughtered since the previous September.

The recall stemmed from the discovery that animal feed which could contain unacceptable levels of dioxin had been used on farms supplying pigs to abattoirs that produced 90 per cent of national pork output.

The Department of Agriculture established two schemes to compensate producers and processors of pigmeat. To date €29.5 million has been paid under the pig and cattle disposal scheme in relation to the slaughter of animals and €102 million has been paid under the pigmeat recall scheme, mostly to meat processors who had lost money due to the recall.

A report of the Comptroller and Auditor General focusing on the second scheme was yesterday presented to the committee.

The committee heard in addition to the €102 million already paid, a further €27 million in claims was awaiting processing, although the department hoped not to pay out the full amount claimed.

An audit by the Department of Agriculture of 16 processors found that half had claimed more money than they were entitled to. Average reductions of 3 per cent were made and in one case a reduction of 23 per cent was made in compensation paid. In addition to incorrect valuations, claims had been made for products that were not eligible for the scheme. A total of €3.4 million was withheld from these processors.

There were also instances where pigmeat was sent for destruction before the department could determine its eligibility. Two major retailers destroyed 637 tonnes of product before it could be examined. In these cases the department said it had no alternative but to pay out.

Inability to trace some pigmeat back to the farm had resulted in a wider recall than might have been the case, the comptroller said. While he accepted the industry was complying with EU regulation, he said it might be useful to review national agricultural practice.

He also noted the department’s audits of the feed production industry found “compliance deficiencies” with regulations in all cases. While many of these instances were minor, the high level of non-compliance with feed safety and hygiene regulations suggested a need for improvement, he said.

Overall the department coped “reasonably well” with the administration of the compensation scheme, the comptroller found.

In relation to Garda compensation cases, the committee heard that €12 million in legal fees was paid, on top of €24 million in Garda compensation claims in 2010 and 2011.

Fianna Fáil spokesman on public expenditure Seán Fleming called on the Chief State Solicitor to publish a detailed account of the fees charged in these cases.

“Immediate action must be taken to reduce the excessive legal costs charged to the taxpayer for compensation cases taken by members of the Garda force and members of the public,” he said.

“It raises questions about who is really benefiting from these cases.”