Beleaguered Defra hit with huge EU fine once again

A GOVERNMENT department wrestling with cuts to its budget of nearly a third has again been fined millions of pounds over its failure to make payments to farmers on time.

The Department for Food, the Environment and Rural Affairs (Defra) has been fined 3.3m by the European Union for a range of offences, including delays in the administering of Single Farm Payments and other agricultural schemes to English farmers.

The latest penalty relates to errors made by the administrative body the Rural Payments Agency between 2005 and 2007 and brings the total that the Government has paid out in late-payment fees to nearly 200m in five years.

Farming leaders expressed their disappointment at the fine, the second that the Government has received this year, having been charged 15.9m in March for similar infractions.

A Defra spokeswoman said the late payments could not be attributed to any one particular reason and the fine had been paid.

However the fact that the UK Government is still being penalized over the farm payments fiasco will be of great concern to farmers struggling with volatile markets and high overheads, particularly as some are still owed money from as long ago as 2005.

Richard Wordsworth, the National Farmers' Union single payment scheme adviser, told the Yorkshire Post: "Although the fine is not unexpected, it is still disappointing news on the back of earlier EU disallowances against the Rural Payments Agency.

"The true picture of the cost of the delivery of the SPS is yet to be known as claims are still being finalised that date back to 2005 and there are still monies outstanding to farmers. The key point is that these were late payments or overspends, and not incorrect payments.

"We remain concerned over the impact that the late payments have had on our members affected by poor administration and on farm businesses across the country."

The fines were announced as the RPA prepares to undergo a radical shake-up of both its finances and its structure. The agency has been the subject of a number of highly critical reports into its performance, notably being referred to as a "masterclass in maladministration" by then-chairman of the Commons Public Accounts Committee, Edward Leigh.

The late payments to farmers were only part of the fiasco, with thousands being overpaid or underpaid, often by considerable amounts. At one stage the agency was forced to admit it did not know exactly how much it had overpaid to farmers.

Another damning report by parent department Defra published during the summer stated that the RPA was still "not fit for purpose," forcing Agricultural Minister Jim Paice to take charge of reforming the agency, acting to establish a new management team and vowing to dramatically scale back the amount of money it spent on each claim.

Currently claims of as little as 50 are costing more than 1,000 to process.

A backdrop of Defra budget cuts totalling 29 per cent over the next four years will place increasing pressure on bosses at the RPA to reduce the amount paid in fines.

An RPA spokeswoman said talks were taking place to establish how much would be cut from its own budget but it had already put in train measures to slim its own budget, committing to a 10 per cent reduction in the amount it spends on administration.

The figure was part of a massive 502.8 million euros which the European Union is fining its member states for breaking rules or failing to control expenditure, more than half of which was run up by cash-strapped Greece. Romania and Portugal were also heavily fined.

A Defra spokeswoman said the 3.8m euros it was fined reflected late payments made for the 2005-2007 scheme years on a range of aids "including repayments of modulation deductions, Single Payment Scheme, protein crops and energy aid which were delayed for a variety of reasons.

"In all cases these payments were made in the 2009 EU financial year and the financial impact on the UK has already occurred."

Pig companies to cash in on china

Britain's pig industry is set to benefit from a 45m cash injection after an export deal was signed with China.

Business Secretary Vince Cable announced the deal yesterday as part of a raft of measures to bolster trade with the country, home to half of the world's pigs.

Driffield pig-breeding giants JSR Genetics has already said it expects to expand its business dealings with China and the British Pig Executive says that pig meat exports to China have the potential to rise to over 40m per annum.

Agriculture Minister Jim Paice said: "This will open the doors in China for the export of the UK's world-leading breeding pigs, which are bred and raised to some of the highest welfare standards."