Inefficient farmers unhappy with performance of inefficient subsidy payers. How invasive Government distorts rural fundamentals

By Allan Barber*

While I was trawling the British Telegraph website, reading interesting snippets of information about the new Muslim Lord Mayor of London criticising the Labour leader Jeremy Corbyn and Leicester City’s Premier League win, I came across a fascinating column by Christopher Booker. He has been following the administration of annual EU CAP subsidy payments by the British Rural Payments Authority (RPA) since 2005 and it seems to have been a total shambles.

The latest stuff up will lift the cost of incompetent administration over the years to more than £1 billion. The RPA is responsible each year for apportioning £1.6 billion in direct subsidies according to the Single Farm Payment system and based on information supplied by the British farmers. This system is so complex the RPA’s administration of it has led to Brussels rejecting large chunks of the claims every year and fining the British Government hundreds of millions of pounds.

A new online method of completing the individual farm returns was introduced, but the complexity of the information required couldn’t be handled by the RPA’s IT system. Therefore farmers had to complete paper forms which were then input by administration staff. As one can imagine, this caused even more chaos.

Farmers had to provide the exact hectarage to four decimal places of each paddock which was then checked against a satellite picture, there were new codes for different crop types and complicated calculations demanded for environmental focus and greening areas. When farmers received their 2015 payments, they found some or much of their application had been refused.

At a time when farm incomes are pretty low, this can make the difference between survival and bankruptcy.

Many farms found their applications rejected because anything up to 100 hectares were disqualified on the grounds they did not match the satellite picture. In one case a paddock was flooded because of a burst water main at the time the picture was taken and it was declared an ineligible inland waterway. Frequently those responsible for inputting the data couldn’t read the forms, with the result there were such exotic errors as code AC62 (birdseed mixture) being entered as AC66 (wheat) and AC59 (mixed crops) replaced by AC52 (Siamese pumpkin).

To add insult to injury the RPA has told farmers they may be fined for making fraudulent declarations, in most instances purely the result of incompetence by its own staff. The fines being imposed by Brussels are the consequence of massive inefficiency which the new system was supposed to cure.

New Zealand may suggest with a degree of self satisfaction it is the inefficient European farmers’ own fault for continuing to receive subsidies while their farming leaders claim they don’t get them any longer. But it’s difficult not to feel a certain amount of sympathy for farmers who are expected to cope with enormous amounts of red tape only to find themselves short changed by the government ministry that is meant to be helping them.

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*Allan Barber is a commentator on agribusiness, especially the meat industry, and lives in the Matakana Wine Country. He is chairman of the Warkworth A&P Show Committee. You can contact him by email at allan@barberstrategic.co.nz or read his blog here ».