Agency overpays farmers by £20m

Under the new system farmers are paid for looking after their land

Farmers have been overpaid by £20m by a government department under fire for its handling of a new subsidy system.

The Rural Payments Agency says almost 2,000 farmers have been paid too much in subsidies since June.

In some cases cheques will be stopped, but the agency will contact other farmers about recovering the money.

The agency had been criticised for late payments of the new subsidy, which gives farmers a single sum irrespective of how much food they produce.

Payments were promised in March, but by the official deadline at the end of June millions of pounds were still outstanding.

Now the agency says that since June, some 2,000 farmers have been paid too much.

'Human crisis'

The agency has apologised for the overpayments, which come as the Department for Environment, Food and Rural Affairs (Defra) is facing budget cuts of £200m, partly because of problems at the RPA.

In July, the government said it would pay interest on the money owed to farmers who had not yet received subsidies under the scheme.

Defra secretary David Miliband admitted the failure to recompense agricultural workers had "caused real distress".

Under the new system, English farms get a single payment every year for looking after their land, instead of a subsidy for producing food.

It means that groups not previously eligible for subsidies, such as vegetable growers and pony paddock owners, can now apply.

The Rural Payments Agency was overwhelmed at the beginning of the year when it received 40,000 more claims than expected.

The forms themselves were detailed and what farmers thought they owned often did not tally with what the RPA had on its records.

The multi-million pound computer system which the agency had installed to process the applications simply could not cope.

In July, it emerged one member of staff had been sacked and others were facing disciplinary action, after claims civil servants at the RPA in Newcastle romped naked and took drugs at work.