Farmers facing subsidy uncertainty

The Government has failed to keep control of European Union payments to farmers following the "poor implementation" of an agricultural subsidy scheme, MPs have said.

The much-criticised introduction of the Single Payment Scheme by the Department for Environment, Food and Rural Affairs (Defra) in 2005 is continuing to cause problems for farmers, the Commons' Public Accounts Committee said.

Nearly 20,000 farmers' entitlements under the 2005 and 2006 schemes were calculated incorrectly and overpayments to farmers in those two years totalled some £37 million, a report found.

Individual farmers who were overpaid have yet to be told how much they owe and when repayment is required, leading to "uncertainty for many farmers".

The report - A Progress Update In Resolving The Difficulties In Administering The Single Payment Scheme in England - sheds light on the errors that persist in the Rural Payments Agency (RPA), an executive agency of Defra.

The RPA has been widely criticised for its rushed implementation of the Single Payment Scheme, which replaced previous EU agricultural subsidy schemes in 2005. In its haste to get the scheme ready on time, the agency created thousands of payment delays and caused widespread stress and anxiety for farmers.

Earlier this month, Environment Secretary Hilary Benn revealed that 700 farmers had still not received their subsidy for 2007.

MPs have described the scheme as the "most complex option for reform" implemented in the "shortest possible timescale" and said the RPA had badly underestimated the scale of the task.

An internal review by the RPA estimated that more than 10,000 farmers were overpaid by some £20 million under the 2005 scheme. Around 7,000 farmers were overpaid by £17.4 million under the 2006 scheme.

The Committee, however, found that the agency had taken "little action" to recover the money and there was a risk that farmers may have unknowingly spent it in the meantime.