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Common Agricultural Policy: Single Farm Payment

Volume 684: debated on Wednesday 5 July 2006

asked Her Majesty’s Government:

What progress they have made in paying in full the single farm payments for 2005.

My Lords, I refer the noble Baroness to the detailed Written Statement that I made this morning, which reported the latest position at the close of the 2005 single payment scheme window on 30 June. In summary, as of that date, more than £1.438 billion had been paid from the total fund; 91,720 applicants had received a full payment; and a further 16,168 had received a partial payment but still await the remainder of their claim. This leaves an estimated 8,500 claimants who are yet to receive a payment, of whom approximately 460 have claims valued at more than €1,000. These remaining claims are complex, but they remain the agency’s topmost priority.

My Lords, I thank the Minister for that reply, but does he also accept that, in cash terms in part and full payment, the payment rate achieved at that stage was only 94.9 per cent, not the 96.1 per cent target, and that the actual payment rate achieved for farmer claimants was only 92 per cent? Does he not accept that, through the sheer incompetence of the RPA, there are still 460 farmers, to whom he has just referred, who have received nothing at all, of those who are due more than €1,000?

Yes, my Lords. The noble Baroness’s figures are correct; they are taken from the detailed Statement that we made. Some 92 per cent of applicants have been paid—107,888 of the total of about 116, 467—and 8,500, as I said, are yet to receive a payment, but, for most of those, the payment will be less than €1,000. I do not say that that is unimportant, but that is the fact of the matter.

On the 460 who have not received a penny but who will get more than €1,000, it is worth pointing out that, although each one is important, approximately 140 to 150 relate to probate and liquidation, which will inevitably take a while, and almost 200 will be paid for English fields but will be paid by the Welsh and Scottish devolved authorities because their farms transcend those boundaries. Those issues still haveto be dealt with, but they relate to incredibly complicated claims. Okay, I apologise; we have got within 1 per cent of the target.

My Lords, the Minister will be aware that England distinctively chose the area basis for payments, rather than the historical basis—I think, quite rightly. Can my noble friend outline the reasons for that, and say what he thinks the prospects are for payment in 2006?

My Lords, the answer to the second part of my noble friend’s question is that the payments for 2006 are no better than for 2005. There will be no promises and no commitments. We will do our best, but we will not give any dates of forecast payments. The first that the farmers will know about it is when they get the money. We will not be hung on any petards or promises. The fact is that 2006 has already started, more than 110,000 claims have been received and 32,000 have passed through the first stage of validation. We will do our best, but there will be no promises about payment.

On the English system being different from that of the other three devolved Administrations, those Administrations chose an area basis. In the long term, the system will produce more money for more of the farmers because it includes specialist producers who did not get any subsidies from the common agricultural policy. That is what caused the problem. There were new claimants with field boundaries that still had to be measured. Indeed, there were over 1,000 per cent more changes to field boundaries and mapping, which partially caused the problem. It was not an IT problem; it was a business case and management problem because of the extra claims. The root cause of the problem was trying to get more people involved in the scheme.

My Lords, the Minister has reported a vast improvement in the payments for 2005, but he has just said in response to the noble Lord’s question that Defra had received 110,000 forms. That is still a shortfall of 10,000 forms not received out of 120,000, and the deadline has passed for receiving forms. What will happen to the 10,000 who have not submitted their forms?

My Lords, I should like to correct a minor point for the noble Baroness, Lady Byford. The 200 farms where there are problems, where part of the land is in England and part is in the devolved Administrations, are in addition to the 460. That is the kind of figure we are talking about, but the claims are very complicated.

As regards the question raised by the noble Lord, Lord Livsey, we always worked on a figure of 120,000 claims. The reality is that, as the claims are validated, some drop out or are not right. Ultimately, there are about 116,000 claims for 2005. For 2006, 110,390 claims have been made out of 118,000 forms requested. People chose not to return the forms for various reasons. We are working on the claims. We had the window changed for penalties, so 4,000 farmers who would have been penalised will not be, because we got the date for entry moved. We will work on the 110,390 claims. As I have said, 32,000 have already passed through the level one validation.

My Lords, I should like to express appreciation to the Minister for the general change in style of approach that we have encountered in the matter since he came into office and there has been a new Secretary of State. However, there are issues on which I would be grateful for further information. First, notwithstanding what the Minister has just said about not setting dates or targets, given the huge impact of this on the rural economy, is he prepared to talk to the Secretary of State about setting a target date and a target percentage for the payment of 2006-07 single farm payments by the end of this calendar year? What progress is being made to settle the matter of unresolved hill farm allowance payments, which is impacting very heavily on farmers in areas such as Dartmoor and Exmoor? Will the Minister further tell the House whether anyone in the Government is responsible for assessing and monitoring the human and social costs of payment delays to date?

My Lords, on the hill farm allowance, 6,800 of the 10,500 eligible claims have been paid. It is treated as a priority. Everything cannot be a top priority. The top priority is those 400 or so claims with a value of more than €1,000; next are the hill farmers.

To the right reverend Prelate’s other question, the answer is “no”. We are trying to learn the lessons from what happened in 2005. We cannot with any confidence predict. Obviously, we want to move Heaven and Earth to do better, but I would say to farmers that, in adjusting their business for 2006 claims, they should look at what happened in 2005—very little can be changed. The forms cannot be changed. There can be no de minimis. It will be 2007 before we can make substantial changes.

The legal window in which the Government are required to pay the money is from 1 December 2006 to 30 June 2007. That is the target date for the window of payment. There will be no promises about percentages of payments paid during that window, target dates in that window or percentage of applications made. We will not go down that road because we will not have the confidence of the figures. We will not fall into the trap of giving misleading information. We will make an assessment over the summer on whether we can make or should make partial payments—our preference is full payments—but we will not make a decision on that until probably October. However, we will at that point make a decision.