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Last Updated: Thursday, 16 February 2006, 10:23 GMT
East: Single farm payment delay
Deborah McGurran
Deborah McGurran
Editor, Politics Show East

Sheep grazing
Payment delay creating difficulty for farmers?

Farmers in the East are being forced to the brink of bankruptcy by the Government's failure to pay their subsidies.

Many are struggling to survive while awaiting money from the Single Payment Scheme (SPS).

Even the Environment, Food and Rural Affairs select committee said it was "deeply unimpressed'' by the failure of ministers and the Rural payments agency to plan the introduction of the payments properly.

The RPA, an Executive Agency of Defra, is the single paying agency responsible for CAP schemes in England and certain schemes throughout the UK.

Once again the government's computer systems are being blamed.

The Single Payment Scheme, which was brought in as part of the reform of the European Union's Common Agricultural Policy replaced most existing crop and livestock payments from 1 January 2005.

Lord Bach, the farming minister, told the committee that there had been continuing problems with the IT system chosen by the Department for the Environment, Food and Rural Affairs to administer the new single farm payment in England.

But Lord Bach of Lutterworth asserted in January 2006: "As the minister responsible for agriculture I am determined that payment to farmers and growers will begin in February 2006.

"This is the timetable we announced more than a year ago and we have not deviated from it."

Single Payment scheme replaces existing direct subsidy schemes including:
Arable Area Payments Scheme
Beef Special Premium
Extensification Payment Scheme
Sheep Annual Premium Scheme
Suckler Cow Premium Scheme
Slaughter Premium Scheme
Veal Calf Slaughter Premium Scheme
Dairy Premium
Dairy additional payments
Hops Income Aid
Seed Production Aid

The committee said that payments to Accenture, the consultancy given the job of writing the software and making it work, had risen from 18m to 37m.

MPs said the decision, by Margaret Beckett, the Environment Secretary, to go for a more complicated system for England than that chosen for other parts of the country was the reason for the delays.

Michael Jack, the chairman of the committee, said: "My members were taken aback at the lack of appreciation, in planning the system, of the extra work it would create.''

Tim Bassington
Tim Bassington: Farmers on the edge?

MPs gave warning that the effect on farmers had been underestimated: "For individual businesses the added costs of interest and arrangement fees could be too much to bear,'' their report said.

Locally we have not been able to find anyone who has received a payment yet.

We have found that many farmers have taken out loans to tide them over and the increased interest through added delay could force them out of business..

Tim Bassington, a livestock auctioneer at Colchester Livestock Market claimed: "Many farmers are up to their maximum overdraft facilities.

Some have borrowed huge amounts of money".

Arthur Chalke
Arthur Chalke: It could be June before we are paid

Arthur Chalke, a 72 year old farmer from Hertfordshire said: "Farmers are desperate.

"Defra is in such a muddle with it all. It could be June 2006 before some of us get the payment."

The Conservatives have called the introduction of the single farm payment "a fiasco".

It would be unacceptable if farms were put out of business due to delays by the RPA in making payments
Efra select committee

Shadow Agriculture Minister, and Cambridgshire MP James Paice said:

"We are pleased that the Select Committee has made such a robust condemnation of the chaotic system which is costing farmers 10m a month in interest payments alone.

"The delay since the usual IACS payment date has cost the industry 30m which it cannot afford."

Mr Paice said MPs had rightly recognised that the responsibility of introducing an immensely complicated system, and expanding it to thousands of previously unregistered land owners, lay with Mrs Beckett and her ministers. He said:

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"As Scottish and Welsh farmers have already received their payments, English farmers are yet again being put at a disadvantage."

In the past farmers were paid subsidies at the end of each year.

Because the system has changed , they were warned it would be February 2006 before payments were made.

Many farmers took out loans to tide them over, any increased interest through added delay is pushing hard pressed businesses to the brink of bankruptcy.

The Politics Show

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Politics Show, Sunday 26 February 2006 at 11.55am.

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Politics Show East
14 Sep 05 |  Politics Show


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