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Last Updated: Tuesday, 7 November 2006, 18:45 GMT
Farmers face more EU cash delays
Cows in a snow-covered field as sunset falls in Bearsted, near Maidstone
Delays to the 2005 payments have hit the 2006 timetable
Some farmers face further delays in getting their share of EU cash, the environment secretary has confirmed.

David Miliband told MPs not all farmers were guaranteed to get the full 2006 payment by the target date of next June but partial payments would be made.

Delays to 2005 single-payment scheme subsidies have meant many farmers have had to borrow to make up the shortfall.

The government has been criticised by the Conservatives and farmers' leaders for failing to make payments on time.

Despair and bankruptcy

The government's Rural Payments Agency (RPA) allocates about 1.5bn under the EU's single farm payment scheme.

The new system calculates a single annual subsidy for each farmer for looking after their land, rather than a series of payments for producing food.

But many farmers claim the long delays in payouts have driven them to despair and even bankruptcy.

Mr Miliband admitted the scheme and its administration had caused distress to many farmers and that the delays to the 2005 scheme had inevitably had an impact on the 2006 timetable.

Whatever faults the previous chief executive must have, it is quite clear that no single person could be responsible for the catalogue of incompetence
James Paice
Shadow agriculture minister

He said the latest estimate for this year's payments was that 99.2% had been paid out, more than 110,000 farmers had received the full payment and a further 4,756 had received a partial payment.

But Mr Miliband said the only way to put things right was to improve management and confidence - something he admitted would not "happen overnight".

The Rural Payments Agency's former chief executive was removed from his post in March.

Mr Miliband told MPs: "The new management of the RPA are dedicated to build stability and predictability into the system so that full claims are delivered in an efficient and timely way.

"However, the interim chief executive has reported to me that he cannot guarantee that the agency can deliver full payments within the payment window for the 2006 scheme."

'Worst fears'

James Paice, for the Conservatives, urged the government to ensure farmers were paid by Christmas and said the statement was an admission of failure.

He said because of the delay there had been a 50% increase in calls to the rural crisis network and farm borrowings were up by 379m.

"Whatever faults the previous chief executive must have, it is quite clear that no single person could be responsible for the catalogue of incompetence but it appears that no-one else is prepared to be accountable," said Mr Paice.

A joint statement by the National Farmers' Union, Country Land and Business Association and Tenant Farmers' Association said the rural economy was paying a heavy price.

The delay would cause financial problems for much of the farming industry, the organisations warned.

"This confirms our worst fears about the ability of the Rural Payments Agency to deliver 2006 single payments," the statement said.

Last month, a National Audit Office report found government mistakes had left thousands of farmers waiting for payments.

It calculated mistakes had cost UK farmers up to 22.5m in extra interest and loan fees.


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