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Agriculture: Hill Farming Allowance

Volume 685: debated on Monday 16 October 2006

asked Her Majesty’s Government:

When they expect to make hill farming allowance payments for 2005 and 2006.

My Lords, as at 12 October, the Rural Payments Agency had made partial or full payments to 91 per cent of eligible claims for the 2006 hill farm allowance. The remaining payments are being dealt with as quickly as possible. As far as the 2005 hill farm allowance payments are concerned, 99.7 per cent of eligible claims have been met in full.

My Lords, I am grateful to the Minister for that reply. Will he continue to prioritise the hill farm allowance payments? He acknowledged on 10 May this year that those,

“in receipt of the hill farm allowance are probably farming on some of the most difficult areas and are not the wealthiest of farmers”.—[Official Report, 10/5/06; col. 902.]

Farmers who have not had their hill farm allowance—in the Lake District, in particular—are suffering hardship. Could the Minister do his best to get their payments expedited?

My Lords, yes, we did prioritise at that point. That is the reason we have got to 91 per cent at present. Some difficulties have arisen in some areas, but there are fewer than 1,000 claims now to be met in full. There are some issues relating to the RPA in regard to common land, but there is a dedicated team still working on the matter. I am not going to give a date by which we will pay it because no one will believe me, but we are working on it as quickly as we can.

My Lords, does the Minister realise what a lack of hill farmers could do to the countryside, particularly in the Lake District? It is essential that they go on farming that area. It is all very well to talk about 99.1 per cent—or whatever it was the Minister said—but what is that in numbers, how much is owing to the farmers and why cannot he give an answer now as to when they will be paid when the matter is over a year old?

My Lords, the Question relates to two years; I gave the figure for 2005. Of the eligible claims, 99.7 per cent have been met in full. That would be some £27 million—or, rather, the budget was£27 million. I do not know, but the 0.3 per cent may be tied up in issues relating to liquidation, change of ownership, probate—the normal, run-of-the-mill things that cause slight delays. I apologise for the0.3 per cent, but it is only 0.3 per cent. We are at91 per cent for 2006. Of course, the 2006 payments for the hill farmers have been dependent on the 2005 single farm payment. That is probably the main reason for the delay, and that is why there is a dedicated team. As to the actual figures, £20.8 million has been paid out to 9,598 claimants as of12 October. That is an average of about £2,000 each but, of course, if your total income is only about £5,000 as a hill farmer, it is a substantial amount. We understand how serious it is.

My Lords, does the Minister acknowledge that the previous week, on9 October, there were 2,153 hill farmers not paid? He cited a figure of 9,590, or thereabouts, who had been paid as of now. The hardships sustained by those hill farmers are enormous, and the matter needs to be expedited rapidly because of the cash-flow implications at this time of the year, when winter feeding on farms commences in the hills.

My Lords, I take the noble Lord’s point. In order that there should be no misunderstanding about this, I can say that there were 11,687 claims: 364 were withdrawn and 797 were rejected, leaving 10,526. We have paid some £20.8 million on 9,598 claims. There were 2,000, but the total figure, with 300-odd withdrawn and almost 800 rejected, leaves us with fewer than 1,000 eligible claims still to be paid.

My Lords, are the figures for hill farmers who are due their money in addition to those for the RPA money that has not been paid out on the single farm payments, or are they included? Can the Minister give me any idea of when he will be able to respond to me in regard to at least four individual cases that I have raised with him of farmers who have not received any help from the Government?

My Lords, as to the latter point, which the noble Baroness raised with me last week, I think two have been replied to—we will probably send copies of the letters that she has already seen—and we are actively looking at the others.

The issue must not be confused: the hill farm allowance is not the single farm payment. Most hill farmers will have received a single farm payment or will be eligible for it. I am answering the Question. I am not going down the road today of answering questions about single farm payments because the Question was about the hill farm allowance. We have enough trouble with the single farm payment without me coming here and answering one question with information relating to another. Some people are owed both. That is the point. With regard to the very small claims, I suspect that some will be owed both.

My Lords, we are extremely apologetic, and I mean that sincerely, for the way in which the single farm payment has been introduced. It has been less than successful: promises were made and not kept; people were told they would get money but it did not arrive; questions were not answered; the wrong maps were sent out; and the forms were not properly pre-populated. But by the end of the legal window, 30 June, when we were required to pay out 96.14 per cent of the money—about £1.5 billion—we had actually got within 1 per cent of that. We now have to deal with the long tail for 2005, and at some time we will have to turn our attention to 2006, which will probably not be much better than 2005.

My Lords, the devolved Administrations in Scotland, Wales and Northern Ireland use a purely historic system of organising the single farm payment. That decision was not taken for England. They are totally different systems, even though they all come within the ambit of the common agricultural policy. It is a good point about hindsight and what might have been done, but I am dealing with the present and the future. There are enough people, whether it is the Select Committee or the National Audit Office, looking at what has happened over the past two or three years with the decisions made on the computer systems, the business plan, and the principal decisions for me not to get involved. I am interested in the present and the future; I cannot change the past. I have to work with the system that was introduced.

My Lords, the Minister said that nearly 800 forms were rejected. Is that just because of a minor box-ticking error? I know that some farmers have had their claims rejected. The forms are very complicated—only one box need be wrong and the entire claim can be refused. Will the RPA please start looking more kindly on people who are not used to doing this sort of complicated paperwork?

My Lords, the hill farm allowance is public money, half of it from the European Union, and it was subject to the auditors and the rules. There are appeal processes, but I am not aware of any major dispute about the rejected claims. The words of the noble Lord, Lord Dixon-Smith, who is in his place, ought to be emblazoned above every farmyard’s accountant’s office. I said I wanted them put in a leaflet, if possible. He said the best value-for-money thing he ever did as a farmer was to fill in his Defra forms.

My Lords, I appreciate that, but many people who have filled in their forms have not had the same service.

My Lords, the single farm payment was not introduced throughout the European Union in the same year, but Germany introduced it and met some difficulties. I understand that a team from the Rural Payments Agency has been in discussion with our German colleagues to find out what went wrong there so we can learn from their experience. All EU countries will introduce it in a different way. It has not been plain sailing. I understand that the French are starting to do it this year, using a system that is different from ours but conforms with the agreement that they have with the European Commission.

My Lords, will the Minister confirm that the reason why there have been no problems in Scotland is probably that the Minister there is a Liberal Democrat?

My Lords, it may have something to do with the system that was introduced. I am not complaining—there is plenty of evidence that, once we can get the English system working in the long term, it will be far superior to what is involved for farmers in the devolved Administrations.