Exclusive: £1,700 bureaucracy bill to get 1p subsidy cheque to farmers

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New figures released this week show tens of thousands of farmers across Britain have received subsidy cheques worth less than the cost of processing the claims.

The cost of processing each Single Farm Payment, subsidy cheques provided to every farmer in the European Union to provide guaranteed income not linked to production, is estimated by the National Audit Office (NAO) at an average 1,743.

A total of 55,814 farmers across the country, however, were given sums amounting to less.

Some of these were made to farmers in Scotland, where the cost of handling payments is a fraction of English levels, but most were to English farmers. A total of 3,879 farmers in Yorkshire received payments worth less than the NAO estimate.

The Rural Payments Agency processed 67 claims worth less than 1 and 12 worth less than 10p.

The news comes after the Yorkshire Post yesterday revealed how the number of subsidy millionaires, people receiving more than 1m in funds from EU, had nearly doubled in the UK.

Jack Thurston, who runs farmsubsidy.org, a campaigning website highlighting the inequalities of the subsidy system, said: "The RPA has not been an emblem of efficient government. It is not supposed to spend that amount of money to make these payments. But if people are entitled to that money they should make the claim."

Arguments on the matter are currently ongoing in Brussels with some EC officials suggesting a cap on minimum payments to exclude so-called "hobby farmers" from the system.

A spokeswoman for the RPA said it was too difficult to estimate the current cost of each claim accurately and that some of the smaller payments may have been reduced owing to farmers having been overpaid the previous year.

The agency has been set a target of reducing processing costs by 15 per cent by 2011.