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Rural Payments Agency must pay farmers in December 2016

The Rural Payments Agency (RPA) must keep its commitment to paying 90% of farmers their full Common Agricultural Policy (CAP) entitlements in December 2016 after failing to meet its payout targets this year, says the Environment, Food and Rural Affairs Committee in its report on Common Agricultural Policy.  

The Environment, Food and Rural Affairs Committee means to hold RPA Chief Executive Mark Grimshaw and the agency's parent Department, Department for Environment, Food and Rural Affairs (DEFRA), to account if farmers again face delays and confusion over their 2016 payments.

New CAP rules this year meant the agency's performance in paying applicants quickly dropped from the 97% achieved in December 2014 to around 51% in December this year. Around 90% of farmers have now received their payments, but the delay has created cash flow problems and confusion for many.

Report key recommendations:

  • The RPA should consider part-payments or early payments in complicated cases if necessary, to avoid hardship for farmers facing cash flow issues.
  • Communications has been a challenge for the RPA this year. It must ensure that it is appropriately resourced with enough trained staff to deal sympathetically with queries and complaints, and it should set Key Performance Indicators for communications and customer service. 
  • Defra must continue to work with the EU to reduce the amount of disallowance penalties that are charged as a result of payment errors, and within its own processes to minimise disallowance risks. The UK has paid more than £642 million in disallowance over the past 10 years – in effect, fines for wrongly apply the CAP rules.

Chair's comment:

Neil Parish MP, Environment, Food and Rural Affairs Committee Chair, said:

"Farmers face extreme hardship as prices for produce are low.

Many producers rely on CAP payments to pay their bills so it is unacceptable that farmers are left uncertain over when their payments will arrive.

The RPA did decide to make bridging payments to unpaid farmers in April, which were welcome, but it is disappointing that it took so long for them to be issued."

Mr Parish also highlighted confusion over communications from the RPA about payments and the length of delays:

"Many farmers have struggled to work out what their entitlements are under the new CAP system, and it has been difficult for them to clarify their numbers with the RPA.

As the RPA now has to take applications for next year at the same time as paying the remaining 2015 claims, it  needs to make sure that next year's process is set up to provide good customer service for farmers, and to minimise the fines that will be charged by the EU for any errors in the payment processing.

We expect a return to 2014's performance levels of 90% payments made by the end of December this year."

Background

The Rural Payments Agency has come under repeated criticism from House of Commons Select Committees over the past year for failures in its CAP-D IT project to automate payments of CAP money to farmers and rural businesses.

Due to problems with the RPA's IT system, some farmers have waited over 16 months between payments that should come yearly, and coupled with low farmgate prices for produce this has caused significant hardship for many farmers and farming groups.

Farmers have struggled to understand their entitlements and have experienced difficulties in communicating with the RPA about outstanding issues with their claims.

2016 application window

The application window for 2016 payments is due to close before the RPA expects to have made all of the payments for 2015, and it is important that claims are made and paid accurately to avoid hefty disallowance fines from the EU.

The Committee held oral evidence sessions with the Chief Executive of the RPA, Mr Mark Grimshaw, and with the Minister for Food, Farming and the Marine Environment, in March 2016.

Channel website: http://www.parliament.uk/

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