RPA Bungling Sees Farmers And Taxpayers Lose Out
24/01/06

The NFU today backed a report which condemns the government for leaving farmers exposed to extra cost as a result of the bungled administration of farm payments.

The Environment Food and Rural Affairs Committee (EFRA) report found that both Defra and the Rural Payments Agency (RPA) had failed to “plan properly for the administration of payments to farmers” causing a massive and ongoing delay to payments and leaving farmers exposed to “extra cost and more worry”.

The report follows widespread condemnation of the RPA within industry, which culminated last week at a meeting of NFU Council with a vote of no confidence in the RPA and Defra Minister Lord Bach over their handling of the administration of farm payments.

The EFRA Committee said some farm businesses may buckle under the strain of interest payments and arrangement fees, which have been incurred as a result of attempting to maintain cash flow. This problem has been exacerbated by uncertainty brought about by the RPA's continued failure to set a date for payments.

NFU President Tim Bennett said: “This report simply confirms what we have known all along - the RPA's bungling has placed a massive financial burden on individual farmers and that some are in grave danger of sinking as a result. I echo calls from the Committee that the Government must make very clear what steps it is prepared to take to ensure its mismanagement does not result in farmers going out of business.

“Farm borrowing topped £1bn pounds for the first time ever last year due in no small part to the RPA's ineptitude. This is an unwelcome burden on an industry, which as a result of recent reform of the Common Agricultural Policy, is involved in a massive transition away from production based subsidy toward a system driven by reward for environmental responsibility. The Government, which introduced this reform process, has a responsibility to ensure the transition period runs as smoothly as possible, but so far it has been a rocky road.

“Both the RPA and the Government need to take responsibility for this mess and go some small way to redressing their failure by making sure that full payments are made to farmers as soon as possible.”

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