March 13, 2012
Ireland compensates pork industry for dioxin contamination scare
In compensation for the dioxin contamination scare of 2008, more than EUR130 million (US$171 million) has been paid by the Irish government to the pork industry.
The Oireachtas Committee of Public Accounts, which was given the figure, was also told that one-third of the cost of Garda compensation cases in the past two years were on legal fees.
In December 2008 the Food Safety Authority of Ireland ordered the recall of all Irish pork 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% of Ireland's pork output.
The Department of Agriculture established two schemes to compensate producers and processors of pork. To date EUR29.5 million (US$38.8 million) has been paid under the pig and cattle disposal scheme in relation to the slaughter of animals and EUR102 million (US$134 million) has been paid under the pig meat 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 presented last week to the committee. The committee heard in addition to the EUR102 million (US$134 million) already paid, a further EUR27 million (US$35.5 million) in claims still awaited 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% were made and in one case a reduction of 23% 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 EUR3.4 million (US$4.5 million) was withheld from these processors.
There were also instances where pork 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 pork 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 EUR12 million (US$15.8 million) in legal fees was paid, on top of EUR24 million (US$31.6 million) in Garda compensation claims in 2010 and 2011.