Rural Payments Agency financial support delays putting livelihoods at risk
3 Mar 2016 01:57 PM
The Environment, Food and Rural Affairs Committee warns that farmers in the UK are at risk of suffering further cash flow problems if the Rural Payment Agency (RPA) does not commit to fixing ongoing issues with its IT systems, in its report on Farmgate prices.
Grants administered by the RPA have been delayed since last year due to an inadequate electronic application system.
Chair's comment
Neil Parish MP, Environment, Food and Rural Affairs Committee Chair said:
"Many producers rely on CAP payments to turn a profit so it is unacceptable that our farmers are still facing lengthy delays to financial support. The RPA introduced an IT system that wasn’t fit for purpose and subsequent errors made in the attempt to fix the problem only caused further delays and confusion for applicants. We welcome the efforts being made to solve this problem and reduce delays but it is crucial that the RPA works to at least match the target achieved by the previous scheme of 90% of payments made by the end of December each year."
Origin labelling
The report also found that current legislation surrounding origin labelling has the potential to mislead consumers and cause confusion. MPs found that a growing interest in the provenance of food and in British products requires a move towards clearer labelling.
Neil Parish MP commented:
"Many people in Britain want to support a British agricultural industry. But Defra’s current guidance on origin labelling allows for companies to sell products such as cheese and butter as British when the raw product is being sourced oversees. As a result consumers are given a false impression that they are supporting a home industry when in fact their money is not supporting UK farmers at all. The British public deserve to buy British in confidence. Defra must strengthen its guidelines around country of origin labelling and continue to press for EU support in establishing clearer and better labelling requirements."
Other key recommendations from the report
- The Committee questions assurance from the retail sector that there is no link between the price at which supermarkets sell to their customers and the price supermarkets pay to farmers. While farmers engaged in contractual arrangements with supermarkets, directly or otherwise, are guaranteed a price for their milk for specific periods, the chronic low price of milk sold through supermarkets inevitably disadvantages farmers in the longer term. Supermarkets may choose to sell milk cheaply as a loss leader, but farmers must not be the victims of the supermarket wars currently taking place in the UK. Progress is uneven amongst supermarkets and assurances must be met with action
- More effective co-ordination between Defra and the devolved administrations is necessary to prevent unsustainable price inequalities emerging at a national level
- Farmers must recognise the strength they can achieve through being part of a Producer Organisation
- The Committee encourages the industry to work with Defra to take forward work on futures markets
- Defra should encourage farmers, processors and retailers to agree more long-term contracts that provide predicable income levels to encourage secure financial planning and investment decisions
- British farmers and producers must seize opportunities for domestic and global market growth. To be able to trade in a global economy, the agricultural industry needs to look at developing global products or adapting traditional products to meet changing demands
- The Committee is concerned that the majority of the 25-year strategy for food and farming will be about developing a plan for England, while also including an export strategy for the UK as a whole. For the sake of clarity, MPs recommend that the Government publish its export strategy separately
- The Department for Business, Innovation and Skills should consider urgently how to extend the Groceries Code Adjudicator's remit to incorporate, and thereby protect, both direct and indirect suppliers to the major UK retailers. The Committee asks Defra to include this in their recommendations to the review of the role of the Groceries Code Adjudicator later this year
Background
Farming and food are a fundamental part of the UK economy, worth more than £100 billion a year and supporting one in eight jobs. Over the last few years, volatility in the prices paid to farmers for their produce has caused significant difficulty to the industry. During the summer and autumn of 2015, some farmers took direct action in protest over falling dairy and meat prices. High profile protests saw supermarket shelves cleared of milk and New Zealand lamb and, in one case, cows paraded through a supermarket.
As a result of increased calls for support to farmers, the Committee launched an inquiry in September 2015 to examine the current situation in the dairy and red meat sectors, and to investigate measures that could be taken to improve prospects for the agriculture industry.
The Committee also held a one‐off oral evidence session on Dairy prices earlier this Parliament on 8 September 2015, taking oral evidence from industry representatives, processors, retailers, the Groceries Code Adjudicator, and the Department for Environment, Food and Rural Affairs (Defra).
The Report builds on work undertaken by the predecessor Committee, which published an inquiry on Dairy Prices on January 15 2015.
Further information