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Agriculture: Basic Farm Payment

Volume 765: debated on Tuesday 10 November 2015


Asked by

To ask Her Majesty’s Government what percentage of the basic farm payment they expect to pay to qualifying farmers by the end of the year.

My Lords, I beg leave to ask the Question standing in my name on the Order Paper. In doing so, I declare my interest as an arable and grassland farmer.

My Lords, I declare my farming interests as set out in the register. The Rural Payments Agency has been working hard and is on track to make the majority of payments in December, and the vast majority by the end of January. Our focus has always been to pay fully, accurately and as soon as possible within the payment window that runs between December and June.

My Lords, I am grateful to the noble Lord for that rather limited Answer. He will recognise that the majority can be 50.01%, and that is not remotely satisfactory for most farmers at a time when they are very hard pressed. The European Commission—our masters in Brussels—have graciously permitted member states to make advance payments to their farmers ahead of the basic payment scheme full payments. Could he explain to the House why Defra has not taken up this option, at a time when British farmers have their backs to the wall?

My Lords, there are a few countries—and I mean a few countries—that are proposing to pay part-payments. What we wish to do is to get as many payments out in full as soon as possible. I will of course undertake to let the noble Lord know as soon as I am in a position to give further details, but the key issue is that we are in the late stages of the final processing point, which is about verification and validation. Once that is done, I will be in a much better position to talk more precisely about percentages. But we understand, and we are working to ensure that farmers get payments as soon as possible.

My Lords, I declare my farming interest. I am sure some people here would accept that I have been raising the question of farm prices even longer than the noble Baroness, Lady Sharples, has been raising that of the horrible knotweed disease we have been talking about. Does the Minister agree that there is a major problem not just for farmers but for the banks and various financial authorities that have been serving farmers over a period of years and have been very accommodating, particularly during this difficult year, which is far worse than the year before? Therefore, it is a matter of urgency that payment which is due be made as soon as possible.

My Lords, I entirely agree. That is why, for instance, the RPA is looking to make payments to dairy farmers fund payment in the first week of December. This is clearly a very difficult time for farmers. We appreciate that, which is why there are 800 people working seven days a week at the RPA to ensure we get payments out as soon as we can.

My Lords, given that our gross payment to Brussels in 2014 was some £20 billion and that our net contribution rose to £11.3 billion, is there any reason why an independent British Government would not be able to pay this money to farmers directly—and rather more efficiently?

My Lords, the reputation of the Rural Payments Agency, which pays the dairy sector in all four parts of the United Kingdom but is responsible for the English basic payments, has been transformed. If you ask many farmers, they will say—as I have; I am a farmer—that their experience with the RPA now is very different from five or 10 years ago, so it has definitely been enhanced.

My Lords, I am grateful to the Minister for referring to the way the Rural Payments Agency has turned things round. Despite its sterling work and the assurances of the Minister, there is no doubt that a number of farmers will experience delays in payments under the basic payment scheme. In light of that, what are Her Majesty’s Government doing to put in place contingency plans to help those farmers who could go out of business simply because of cash-flow problems if payments do not come through on time?

My Lords, that is precisely the issue raised by my noble friend Lord Plumb. It is very important that the continuing good relations between banks and farmers remain as strong as possible. Clearly, one thing we need to do is give the British farming sector a much enhanced future. Indeed, that is why this week the Secretary of State has with her eight dairy businesses and 80 UK farm businesses on her visit to China. This is about a growing market. Obviously, we face a short-term problem but the prospects for British produce are very strong. However, I am very conscious of what the right reverend Prelate has said.

What will the cuts in the RPA budget be in the coming year? Will its performance next year be better than this year?

My Lords, I do not know what cuts, if any, there will be in the RPA. Obviously, these matters are way above my station. Clearly, we want to enhance this. We have had a very complicated new basic payment system—far more complex than we would have liked. That is why we want greater simplification next year, and why the Secretary of State has been in touch with Commissioner Hogan. We will continue with an online and a paper application for 2016, which I think will work best for farmers.

My Lords, what plans do the Government have to review the transfer rate from Pillar 1 of the basic farm payments to the rural development programme, as the coalition Government committed to do? That would ensure that the maximum environmental and social benefits were gained from this public money that farmers currently receive.

My Lords, £2.3 billion is allocated to Pillar 1 direct payments and £620 million to Pillar 2 rural development in 2015. I am sure that both sums will be put to good use.

My Lords, I declare my interest as a dairy farmer in receipt of payments. On the related matter of market and public support, does the Minister agree that it is provocatively dangerous for the farmer-funded Agriculture and Horticulture Development Board to state that commodity prices are not market related? Do the Government have any plans to require the AHDB to monitor and audit retailers’ honesty boxes of public commodity donations to farmers as a way to get fair commodity payments to farmers—or would that be the responsibility of the Groceries Code Adjudicator?

My Lords, I will write to the noble Lord about some of the more technical details, but we very much welcome the fact that some supermarkets are paying a premium. It is important there is transparency, and we want that sum to go to the farmers.