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Agriculture: Subsidies

Volume 465: debated on Thursday 25 October 2007

To ask the Secretary of State for Environment, Food and Rural Affairs (1) if he will make a statement on discussions he has had with (a) IT consultants, (b) stakeholders and (c) the Rural Payments Agency on the delivery of partial single farm payments; (159544)

(2) whether he has had discussions on making part of the 2007 single farm payment before the 2007 payment window opens in December; and if he will make a statement;

(3) when he expects to be able to begin making 2007 single farm scheme payments; and if he will make a statement;

(4) what consideration he has given to the merits of making partial single farm scheme payments in December 2007; and if he will make a statement;

(5) what targets he has set for delivering 2007 single farm scheme payments; and if he will make a statement.

The Rural Payments Agency (RPA) has a formal target to pay 75 per cent. by value of valid 2007 single payment scheme claims by 31 March 2008 and 90 per cent. by 31 May 2008.

In the light of the difficulties experienced by farmers as a result of flooding, FMD and bluetongue, RPA was asked to investigate the possibility of making payments in advance of the payment window on 1 December and/or or making partial payments. The agency has also been asked to ensure it has the capacity to make partial payments should this be necessary.

However, having reviewed the options, my noble Friend, Lord Rooker, has confirmed to the RPA chief executive and industry stakeholders that the primary concern remains that the SPS system should be stabilised as soon as possible, so that the agency can deliver an improved, reliable service to the farming industry in future years. It is clear from RPA's advice that trying to make early payments now would undermine efforts to that end and introduce unacceptable disallowance risks, particularly as there is no EU legal basis for SPS 2007 partial payments. With this in mind, Ministers have agreed that RPA should instead work towards making more full payments to farmers earlier than last year but not set any arbitrary deadlines for the start of payments.

To ask the Secretary of State for Environment, Food and Rural Affairs (1) what his most recent estimate is of the amount of financial disallowance the European Commission will impose on the United Kingdom arising from the implementation of (a) the common agriculture policy and (b) the single farm payment scheme in (i) 2005, (ii) 2006 and (iii) 2007; and if he will make a statement; (159550)

(2) when he expects the European Commission to implement the disallowance relating to the implementation of common agricultural policy schemes and the single farm payment scheme; and if he will make a statement.

DEFRA has included provisions totalling £348 million in its resource accounts for 2006-07 in respect of potential financial corrections (disallowance) imposed by the European Commission for breaches of EC regulations in making payments for SPS 2005, SPS 2006 and other precursor common agricultural policy schemes. DEFRA also made an accrual for £63 million in respect of late payment penalties imposed in respect of SPS 2005. A further £7 million has been noted as a contingent liability. It is too early to make any formal assessment of the potential levels of disallowance in respect of SPS 2007.

Detailed discussions will take place with the Commission over an extended period, possibly two or three years, before a final figure is reached on any disallowances. The outcome will be disclosed in the Department's resource accounts in the year in which any financial corrections are imposed.