Rural Payments Agency

My Lords, I am sorry. I arrived just after the debate had started so I missed that announcement. I thank the noble Lord, Lord King, for providing the opportunity to debate this subject. I declare an interest up-front in that I am married to a farmer. This situation, plus all the changes associated with it, has been causing us a lot of grief over the past couple of years and has wrecked a year of our life. We have had to absorb an amount of paperwork on top of all the other legislation that has come out relating to health and safety, cross-compliance issues and so on, so it is not just a simple matter of trying to get one little thing right. I feel slightly sorry for the Minister because I think that he has been badly misled by the agency. I have always been very concerned about the concept of agencies being hived off—almost as part of the Civil Service but not quite—so that we could never get to grips with them in Parliament. They could always hide behind their remit and were not directly responsible. That allowed a loss of control and a loss of information to occur. I am concerned that we are setting up Natural England in the same way. I can see that we are not learning from our mistakes, and I think that hiving off responsibility to large agencies is very dangerous. My background is in IT and software development. I wrote a lot of farming software years ago. I then married a farmer, and I have also learnt how to do digital mapping as a result of the move to the mapping system. My wife will not sign off maps unless she knows that they are 100 per cent accurate. The justification for relating what has happened to us is simply that the same thing has happened to 65,000 others. Those people cannot get their money either, and I hope that some lessons can be learnt. I say to the noble Lord, Lord Desai, that the situation is very serious. Anecdotally, we have heard of three suicides locally. The trouble is that the problem is exacerbated by the paperwork and everything surrounding it. People did not go into farming to farm paperwork. If farmers are already at their financial limits, they cannot extend their overdrafts. Therefore, although the debt burden overall may not seem terribly serious, individual farmers are at their limit. Speaking personally, we are able to weather the problem at the moment but I shall give noble Lords an idea of the situation, given that the farming subsidy structure has been relied on for many years and cannot be cut off overnight. The last payment to my wife, who is an arable farmer, was in November 2004. Normally she would have been paid in November 2005 and that would have paid for seeds, fertilisers and sprays so that she could continue farming over the next year and pay off some of the debt while the harvest was being sold from the previous year. Currently, she has not received a payment for 16 months, as opposed to a year, and that has to be covered somehow. She has to buy the materials to continue farming for the next year and that is very difficult—her money has to come from somewhere. Without a happy bank manager, basically you have to fold. For arable farmers, the crunch point is now. If they cannot get further loans, they will have to go out of farming—there is no other option. That is why the situation is so serious. I shall try to describe the root of the problem. The digitisation exercise was started several years ago but, at that point, we had an arable area payment system which depended on certain definitions of land and so on. As the digitisation process went forward, it was not properly explained that there would be new rules on what qualified for future payments. The single payment system and the entry-level scheme suddenly came in but there was no real information on them until much later. In September 2004, we arrived at the point where the maps were based on an old idea of what should be submitted to Defra but a whole lot of new stuff then qualified and had to be included, so suddenly all the maps needed to be revised. I do not think that anyone had realised that until it was far too late. We submitted the necessary corrections and registered for ““fast track”” because we realised that the entry-level scheme money would also be vital to the profitability of the farm. To do that, we also needed to get on with our woodland areas and so on. However, the maps did not appear and we could not apply for the entry-level scheme in August. We started to panic and telephoned the agency. Then, around October, we were told, ““We’re terribly sorry. It’s all going to slow down again as there has been a change of policy””. I think that that is probably when university students stopped being directly employed to do the work and the department switched to an outsource process. Perhaps that had been planned earlier—I do not know—but there was a huge slowing-down in the process. Months and months after submitting our application, just before Christmas on 23 December, we received maps covering about 80 per cent of the farm estate with a requirement, set out in an abrupt letter, to return them within seven days—not working days but seven days over Christmas—if we wanted to make any changes. In the meantime, in trying to enter the entry-level scheme we also established from the Rural Development Service that a lot of the land had been lost and was no longer connected, so nothing tallied. The maps that we received in December were not too bad. When I looked at the overall hectarage of the 80 per cent of the land covered by the maps, it came within 0.04 hectares of what I thought it should be according to our digital maps. Therefore, we concurred because at that stage we were both working from Ordnance Survey landline-based data. We only needed to get the remaining 20 per cent registered and we could then go ahead with the entry-level scheme. We had a few problems. We got a note from the Countryside Stewardship Scheme, which was clearly working on out-of-date maps with different areas and so on. We also received material from the customer services centre in Newcastle, which showed that the staff there were working from maps with changes on them which went through from 23 December, and from the old 2004 pre-change maps. There was obviously a muddle. In March, we were worried as we started to receive maps with completely new areas on them. I realised that I was probably looking at a new mapping system based on the Ordnance Survey master-map series, and that maps had been changed in the middle of the operation. We had problems because people had made arbitrary decisions about where the field boundary lay and that did not concur with the old information. That was particularly the case with the old Countryside Stewardship Scheme agreements, where a boundary might date back well before certain other things had changed in the fields. Therefore, if you did not go back to the old boundaries, you would have to rewrite legal agreements as well. We were left in confusion and with problems. Yesterday, we received some maps and we are now down to only two-thirds of the farm estate being mapped. We seem to have lost an awful lot, so I suppose that I have to go through the whole lot and send them back again. The problem with the mapping, and the reason that it is so important, is that it triggers everything else. The maps are the key to everything: nothing can happen until the maps are agreed. Out of them come the tables from the customer services centre and therefore the entitlement statements. The Countryside Stewardship Scheme, the entry-level scheme, the farm woodland grant scheme and the Forestry Commission woodland grant schemes are triggered by the maps. The sad thing is that, according to the unverified statements sent out not very long ago from Newcastle, we were within four-tenths of a per cent of agreeing the total area for the single payment system claim, but we will not receive anything. Money is the key to this. I think that the Minister is responsible for sustainable farming, but you cannot sustain farming without money. An online poll in January showed that 62 per cent of farmers were already in financial trouble. I do not know whose money it is. Who is accruing interest on the billions of pounds that are sitting there? I do not know whether the amount is £1.6 billion or £3 billion—I read different articles. Presumably the Government are getting the interest on that money, so why can they not pay it out to keep farmers, and perhaps the bank managers, a little happier? I have a question. My wife told me that after 30 June this year, the EU will cease to have to pay this money and the Government will have to pay it from UK funds instead. Is that true? There are further problems. What happens if two payments arrive next year? What about the tax issues? Will we be allowed to refer one tax liability back to this year? We have an enormous tax hit. As you have to pay your tax up-front for the following year, that will bankrupt a few people too. By 16 May we have to fill in the next SPS forms, but which areas do we put on them? If we show the same areas that we put on the previous form, will we receive penalties if penalties had to be paid on that one? Will we get penalties over two years just because we are sticking to our guns and, inadvertently, did not realise that there was a mistake? We hear that there are heavy penalties with regard to cross-compliance. An eastern region farmer has been penalised 15 per cent for going over the top with some fertiliser on an FP209 recommendation. People are heavily active on the penalty side. It is sad that there is no Smithfield this year. I am sorry—I am jumping all over the place. In conclusion, what is the way forward? I am not sure that promoting the second in command, who was probably responsible for instituting these procedures, into a position of control is the answer. For those who have digitised their farms accurately, the digital maps could be accepted. We need to speak one-on-one with the people doing the mapping to sort out the boundaries. We need to know why they are moving the boundaries, so that we can agree them. We could make historic payments. Ninety per cent of the single farm payment is supposed to be based on historic payments. We know what those are, from last year. It could, therefore, be 90 per cent, as long as we know the base years being used for those of us who have rebased. We do not even know whether that has been accepted, or if the data have been lost. There are a lot of complications. I am happy to talk to whoever about how they can be sorted out, as I have quite a bit of experience.