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Government failures could see Dales farmers pushed to the brink

[Wednesday 18 October 2006]

FARMERS leaders are calling on the Government to learn from the mistakes highlighted in a devastating National Audit Office (NAO) indictment of the delivery of the Single Payment Scheme.

dales farm
Will Dales farmers again be pushed to the brink?

Many in the farming community across the Yorkshire Dales were pushed to the brink of bankruptcy throughout 2006 as the much maligned Rural Payments Agency (RPA) failed time and again to meet its own deadlines for the payment of European subsidies.

The National Farmers Union (NFU) is now urging ministers to make a decision to implement a system of partial payments for 2006 without delay. The Single Payment scheme operates a year behind and concerns are already being raised that farmers will again have to endure further delays as the RPA struggles to issue the cheques that are so vital to many small Dales hill farms staying financially afloat.

The NAO report, launched today, estimates the failure of the Rural Payments Agency to deliver 2005 single payments efficiently, and on time, cost farmers collectively between £18.5 and £22.5 million in interest charges and arrangement fees on loans and could result in an EU fine on the British Government of as much as £131 million.

On top of that, it reveals the cost of delivering the payments had escalated from Defra's first estimate of £76 million to £121 million by March this year, with further increases in the pipeline. The extra cost is a potent factor in the budgetary cut-backs that Defra is being forced to implement, at the expense of the rural economy - already the countryside's new champion, Natural England, is cutting back on its expenditure just weeks after it was officially launched.

The report also highlights the fact the "wait and see" approach adopted by Defra ministers in the hope full payments could be delivered on time, was a major factor in the administrative disaster that ensued.

The report adds that "many of the Agency’s difficulties arose from underestimating the scale of the work needed to implement the scheme; over optimistic progress reporting; and governance structures which, in practice, proved overly complex, and the absence of clear metrics, arising from the lack of appropriate management information that would have allowed the oversight boards to measure progress objectively."

...it looks like English farmers will be left out in the cold once again

Peter Kendall - NFU President

At a stakeholder meeting earlier this week with the Food and Farming Minister, Lord Rooker, to discuss progress with 2006 single payments, NFU President Peter Kendall, warned ministers against making the same mistake this time around.

Mr Kendall said: "Everything we have heard both from Lord Rooker and the RPA's chief executive, Tony Cooper, suggests we are in danger for heading for a repeat of this year's fiasco if ministers do not learn the lessons set out in today's NAO report.

"Chief amongst them is the need for a contingency system that is ready for action and activated as soon as it becomes clear the main system cannot deliver what is needed. From where I sit, that day is fast approaching."

Today's NAO report reveals the government developed and then ditched not one fall back part payment system but two, only to have to develop a third system in April this year, once heavy fines for late delivery were staring it in the face.

Mr Kendall continued: "The Germans adopted an even more complex regional scheme than we did. And yet 78% of their payments were delivered by the end of December 2005. Why? Because on realising they could not deliver full payments early, they pressed the button on their part payment system - something this government singularly failed to do, preferring to believe the RPA's over-optimistic assurances that it could deliver in full.

rural payments agency logo
RPA "underestimated the scale of the work

"If ministers take the same 'wait and see' approach this year in the vain hope of being able to make full payments some time in the spring, we will end up in the same mess again. Ministers need to learn the lessons, bite the bullet and press the part payment button.

"With Irish and French farmers benefiting from advance payments ahead of the payment window and Scotland and Wales set to begin payments from 1 December, it looks like English farmers will be left out in the cold once again."

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