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Last Updated: Wednesday, 18 October 2006, 06:19 GMT 07:19 UK
Mistakes 'cost UK farmers 22.5m'
Cows in a snow-covered field as sunset falls in Bearsted, near Maidstone
Thousands of farmers were affected, the report found
A series of government mistakes while bringing in a system of agricultural payments cost UK farmers up to 22.5m, the National Audit Office says.

Its report on the Rural Payments Agency found the costs related to additional interest and arrangement fees on loans.

The auditors found a catalogue of management errors meant thousands of farmers were left waiting for payments.

A Defra spokesman said the department was fully aware of the problems and was committed to resolving them.

The National Farmers' Union said delays and poor performance by the RPA had hit the industry and caused its members distress and anxiety.

Its president, Peter Kendall, said: "Farmers had a lot of worry waiting to know when money was coming through, the cost of reorganising overdrafts and a complete inability to plan, so it's had a big impact on farmers."

The RPA was set up in 2001 as an executive agency of the Department for Environment, Food and Rural Affairs (Defra).

It is responsible for allocating about 1.5bn under the EU's single farm payment scheme.

'Risks and complexities'

The report points to failings at all levels in appreciating the risks and complexities involved in implementing the scheme.

The report's authors say the agency underestimated not only the number of people who would claim under the new system, but also the amount of land they would register.

The computer system that was used was not fully tested, it said.

The BBC's environment correspondent Sarah Mukherjee said that the agency's former chief executive was removed from his post in March, but remains on full pay of almost 114,000 a year.

The report's authors say that 5% of the farmers they spoke to were considering leaving farming altogether because of the stress and financial hardship caused by delays in payments.

Our correspondent added that industry experts say it is inevitable some farmers will go bankrupt as a result.

Concerns over farmers left waiting for payments

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