Rural Payments Agency

My Lords, I am grateful to the noble Lord, Lord King, for introducing this debate today on the independent delivery agency, the Rural Payments Agency. At the outset, I declare my interest—as a Peer sitting on the government Benches—as a dairy farmer in Cheshire and as a director of Dairy Farmers of Britain, a co-operative of some 3,500 dairy farmers. I have also been the president of the Royal Association of British Dairy Farmers and chairman of the Cheshire branch of the CLA, as well as being a member of the NFU. However, my words today are spoken merely as a dairy farmer. The Government and the Minister at the time, my noble friend Lord Whitty, are rightfully to be congratulated on the announcement on 12 February 2004 that, as part of widespread and continuing reform of the common agricultural policy, England would introduce the single payment scheme on the dynamic hybrid model. Farmers’ payments would be based 90 per cent on historical claims and 10 per cent on the area farmed. Over time, this would change from historical predominance to payments per acre of holding. That was part of the process of changing payments to farmers from being production-based towards being based on environmental and other benefits. Payments cannot be justified on some ever-receding historical production level. While this system is obviously more complex than the purely historical system introduced by Scotland and Wales, among others, that announcement was now more than two years ago. However, complexity has been compounded by further changes—for example, changes to the definition of who is eligible, what is eligible and what are the requirements with adjustments for hardship and national reserve cases, appeals, treatment of common land and set-aside. One might ask whether it was then wise to overlay IT, office and staff changes. There has not been a settled team working in a settled work environment. Does that entirely excuse what other noble Lords will be describing today? I believe that most of the problems are consequential on the fact that the mapping process that is obviously required for the area element of the payment has been ineffective. I know that the noble Earl, Lord Erroll, will come up with some interesting theories later concerning that. From my farm, I have received differing maps about every two months or so, each one bearing little relation to the map previously sent to me and no relation to the corrected maps that I return each time. Why should that be, given that I had very adequate maps provided under the IACS system previously applicable? It is extremely disappointing that this mapping process has not been completed prior to the payment window opening. As I understand it, of some 120,000 applicants, 55,000 have been validated for payment—although I understand that some of these are still incorrect—leaving 65,000 invalidated and with notification of entitlements unreliable. My noble friend cannot be held responsible for the operation of this delivery agency. However, he will be anxious that its performance will be reflected in people’s assessment of the Government and their administration. How can my noble friend be told and repeat on 2 February that the bulk of payments would be completed by the end of March and then, some mere six weeks later, on 16 March, be told that only 7 per cent of claims have been paid with only two weeks to go? Can I tempt my noble friend with some helpful suggestions? It would help customer relations enormously if the agency’s attention could change from overindulgent procedures to avoid disallowance and from focusing on the potential fine for failure to implement the EU regulation by June. Instead, let us see what can be done to implement partial payments. After all, 90 per cent of claims are on an historical basis. We should change the process to one in which staff operate as case officers for individual claimants rather than undertake the task-based approach. We should allow communications with claimants so that they can understand to some degree where they are, what they can tell their bank managers and what probable outcomes they must plan for. We should state on entitlement statements the calculations used to arrive at an award, so that claimants can follow and check the validity. We should announce that penalties for late filing will be waived so that errors are not needlessly exported into next year’s system. Also, we should get the outsourced mapping contractors into the RPA offices to work as a team, eliminating any IT glitches. No doubt the Minister is seeking deadlines on which he will expect answers to many problems. Will he say what disciplines he has called for to give this House confidence that everything is being done to expedite matters? The lack of funds into the rural economy is resulting in severe stress, anxiety and economic hardship. I understand that some £10 million as interest is being transferred from farmers to the banks. That money is urgently needed to help the transition that we all seek towards the revitalised sector. The SPS system is not the only source of funds that the RPA processes into the rural economy. I also refer, as far as livestock producers are concerned, to the compensation payments consequential on disease, especially bovine TB. The House debated the Cattle Compensation (England) Order 2006 on Friday 10 February, although regrettably I was unable to be present. I am aware that one must be extremely careful when venturing into areas that impact directly on one’s own affairs outside this House. However, I can assure my noble friend that this system is in need of urgent improvement. Although it may be effective for a large part of the cattle population, 47 cattle categories are inadequate to do justice to the multitude of herds, ages and standards, especially breed improvement programmes undertaken to add independently assessed value to a farmer’s herds. Moreover, these breed improvement programmes have as their main feature longevity and welfare implications. This tabular system is based on the auction system whereby a vendor has to rely on what a purchaser is prepared to pay. It entrenches the system whereby farmers must accept what is offered for their produce, be it cattle, milk, cheese, beef and so on. The tabular system fails to take into account private sales where the vendor can, to some extent, name his price. It also fails to recognise that many herd-improving cattle are not traded at all, as they are retained to produce and pass on genetic superiority to their offspring. Holstein UK, the registration body for pedigree black and white cattle, which also undertakes registration programmes for six dairy breeds and one beef breed, has been working with the National Audit Office to authenticate price banding according to independently set breed improvement programmes. Information is independently verified by the Centre for Dairy Information. The tabular form is blighting the value of herds, reducing fair comparisons and fair compensation to perhaps the top 20 per cent of cattle and their owners. Genus, a publicly quoted company, is to be congratulated on breeding a bull called Picton Shottle, which has been independently assessed as being internationally superior. His services are much in demand. God forbid, but is he to be valued on the same basis as a herd-bred pedigree bull? I suggest that the NFU should still advise all members to undertake an independent valuation of cattle caught by bovine TB and to attach it to their form, BT1(1/06), on the valuation of bovine animals. We might then be able to follow this up. I mention that as a further example of resources that are not getting through to rural areas. I could also include diversification grants, set up to encourage new enterprises. My noble friend has direct experience of difficulties that can be encountered if the pace of change is too great. While I applaud the enthusiasm for change shown by my noble friend, perhaps I can tempt him to be aware that these are extremely testing times in the rural economy and that more time may be required to effect a lasting transformation.