Scott Bingham The Politics Show South West

Payment of new style EU subsidy delayed - again?

South West farmers are criticising the government after it emerged that payment of the new-style European subsidies could be delayed for a second time.

A year ago the government announced that farmers would have to wait until this February at the earliest to receive the new subsidies. Now it looks like they may have to wait even longer.

Anthony Rew's family has been farming just outside Newton Abbot for 80 years.

It is a traditional Devon mixed farm, with just over 100 dairy and beef cattle and 110 acres of arable land.

Increased overdraft

Like most farms, the business operates for much of the time on credit. Farmers traditionally receive their subsidies between October and January each year.

Anthony Rew normally receives his in December and most of his bills have usually been paid by now.

But this year, like thousands of other farmers, he is still waiting for the cheque to arrive.

"We have had to increase our overdraft. I have tried to stop paying people very quickly, but people want their money. I think we will survive, but it's going to put a lot of people under pressure and it is needless", he said.

The reason for the delay is that the Department for Environment, Food and Rural Affairs (Defra) has introduced a new subsidy payment system in England.

All the old complex payments for what farmers were able to produce have been replaced by just one subsidy based upon the amount of land the farmer has - known as the Single Farm Payment.

But many farmers claim maps, drawn up as an integral part of the application, are incorrect. And the system has become bogged down in paper work.

The payment date has already been pushed back to the end of February 2006 and there are now real concerns that deadline too will not be met.

The delay is already costing farmers millions of pounds in additional interest payments.

"There is about �1.5bn that is due to farmers this year. That is small in the context of government expenditure - it spends �90bn on health, for example.

"But it's a lot to farmers," said George Chichester of property consultants Strutt and Parker.

"They are going to receive that at least three months later than in previous years, and that adds a bill of �25m in interest charges for the farming community to bear this year."

Defra admitted last week that it had a backlog of 400,000 "tasks" still to complete.

And the ruling body of the National Farmers' Union (NFU) this week agreed on a vote of no confidence in the agency's ability to deliver the payments. "There's no doubt the single payment scheme is the right way to go.

"To reward farmers for looking after the countryside, playing a part in rural community and all those other things which the market cannot reward.

"It's the right thing to do, but we've implemented it in the worst possible way," said Anthony Gibson, south west regional director of the NFU.

The government has said it might consider partial payments if full payments are not ready by the end of February. This could help many farmers with short-term cash flow problems.

But others say it is vital they know how much they will receive in subsidies and when they will receive it as soon as possible.

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