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Last Updated: Tuesday, 24 January 2006, 11:13 GMT
Farm subsidies system criticised
Cow - generic
The NFU passed a vote of no confidence in the RPA.
A Commons committee has accused the government of bungling, complacency and wasting public money over a new system of paying subsidies to English farmers.

It will mean farmers receive one annual sum instead of a series of payments.

The Environment, Food and Rural Affairs Committee said the cost of an IT system for the scheme had doubled and farmers were unsure when they would be paid.

Rural Affairs Minister Lord Bach said he was "acutely aware" of the payments' importance and denied being complacent.

The new system works out what subsidy each farm should get according to past receipts and their land area.

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

In its interim report, the committee said the cost of an IT system for the Department for Environment, Food and Rural Affairs (Defra) to process the Single Farm Payments had increased from 18.1m to 37.4m.

Defra's Rural Payments Agency (RPA) aims to start making the payments in February and to have paid 96% of eligible farmers by the end of March.

The Environment, Food and Rural Affairs Committee (Efra) launched an inquiry into the new scheme in October over concerns the March deadline would be missed.

Its report found Defra gave "insufficient consideration" to the complexity of the subsidy scheme and failed to anticipate an increase in claims from farmers.

RPA witnesses also said the fact that IT supplier Accenture had been developing systems for outdated Common Agricultural Policy schemes had contributed to the IT budget overrun.

Delay?

When Lord Bach appeared before the committee on 11 January, he could not confirm exactly when full payments would be made or whether farmers would be given partial payments if there was a delay.

At the time, Lord Bach said his discussions with banks had suggested no "viable" business would fail as a direct consequence of a delay in payment.

However, the MPs' report said late payments could cost farmers an extra 25m in interest to banks.

"It would be unacceptable if farms were put out of business due to delays by the RPA in making payments, and the government should make clear what steps it intends to take to ensure that this does not happen," it said.

I am deeply disappointed with the timing of this report which could create unfounded alarm and uncertainty in the farming community
Lord Bach
Rural affairs minister

In response, Lord Bach said the committee's report would be considered in detail.

But he added: "I am deeply disappointed with the timing of this report which could create unfounded alarm and uncertainty in the farming community.

Lord Bach said a number of the report's assertions were "utter nonsense".

"I am acutely aware of the importance these payments have for farmers' livelihoods and have been working closely with the RPA, the NFU, farmers, banks and others to ensure payments are made on the date we have promised and wider concerns addressed."

Lord Bach said the government had said it would start the payments at the end of February and that it would do everything in its power to ensure the deadline was met.

Speaking on BBC Radio Four's Today programme, he said: "This interim report, which misquotes me on three occasions in 14 pages, is rather shoddy and really isn't up to the normal standards of Efra."

Lord Bach added he was "not happy" with the increase in budget.

'Massive burden'

National Farmers' Union (NFU) president Tim Bennett said the government needed to set out plans to ensure farmers did not go out of business.

"The RPA's bungling has placed a massive financial burden on individual farmers and that some are in grave danger of sinking as a result," he said.

Last week, the NFU passed a vote of no confidence in the RPA and Lord Bach over the administration of subsidies.

Shadow agriculture minister Jim Paice welcomed the report as a "robust condemnation" of a "chaotic system".

"The committee has rightly recognised that the responsibility of introducing an immensely complicated system and expanding it to thousands of previously unregistered land owners, whilst forcing it into place at the earliest opportunity, lies clearly with [Margaret] Beckett and her ministers," he said.




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