Rural Payments Agency Issues

Watching the Rural Payments Agency (RPA) fail to get to grips with outstanding problems that exist from the introduction of the new Basic Payment Scheme (BPS) in 2015 is like watching a slow motion car crash.

The problem is that although the majority of farmers have received the correct payments for 2015, there are still a significant number of farmers who have not received the correct payments and in some instances this also means they have not been awarded the correct number of BPS entitlements which will impact on the 2016 claim and beyond.

The problem is that there appears to be no way of speaking to anyone at the RPA with whom one can actually discuss the problem.  All one can do is write in to the generic email address explaining the problem and then wait…and wait….

Eventually a letter will arrive re-assessing the claim and in most instances this is probably correct but I have personally experienced one situation where the re-assessment is still very wrong.  All I have been told is to email in again and explain the same situation yet again.

The problem is that there is no one to talk to who you can discuss the situation with and there appears to be no way of influencing the speed at which the claim will be processed.  This is an increasingly worrying situation because the 2016 payment window will open on December 1st and any problems from 2015 will be carried forward for a second year thereby making things worse.

If this is the case the consequence is that it will become increasingly difficult for farmers who have outstanding issues to get them resolved because understandably the RPA’s resources will become focussed on getting as many of the 2016 payments out as quickly as possible.

NFU vice-president Guy Smith has commented, “The problem is that, although we think they [the RPA] are about to draw a line under BPS 2015 payments, we are not convinced that everyone knows whether they have been paid correctly,” He went on to comment that it needs, “the skills of a forensic investigator and the time of a land agent” to work out whether or not one has been paid correctly.

But as a land agent myself I think the main problem is that even when one has established there is an error there is just no way of discussing the problem with anyone within the RPA who has the skills or knowledge to deal with this issues themselves.

If this results in last year’s errors being compounded in to 2016 and beyond it seems very likely to me that we will be arguing about missing Common Agricultural Policy support payments well beyond our eventual exit from the EU.

James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk

Basic Payment Scheme

West Country farmers and landowners are worried that the current level of cashflow coming from the Basic Payment Scheme will not be maintained after 2020.

They welcomed the announcement by Philip Hammond, the new Chancellor, that funding under the Common Agricultural Policy will stay - at least in the short term.

This appears to mean that the current level of payments being made under the BPS will be maintained until 2020, which coincides with the lifetime of this EU scheme. What is not clear is whether the domestic rules relating to this scheme will change following our departure from the EU.

Mr Hammond also confirmed that any structural and investment projects signed off before the Autumn Statement at the end of November, “even when these projects continue beyond the UK’s departure from the EU”, will continue to be funded. This should include all projects paid through the Rural Development Programme for England such as agri-environment schemes.

Again this is good news for farmers and landowners committed to long term agreements, many of which still have up to ten years to run. But what will replace these schemes? We need urgent clarity on the future of agri-environment schemes beyond November.

Unsurprisingly, Mr Hammond’s announcement was welcomed by leaders of farming and countryside organisations as good news for the short term.

A National Farmers Union statement said: “This should mean that farmers can count on receiving the Basic Payment Scheme through to 2020, and that agri-environment schemes already in place are guaranteed through to their conclusion,” while NFU president Meurig Raymond added: “I hope that this short-term certainty will help to deliver longer-term confidence. This is exactly what farm businesses need now.”

Similarly Ross Murray of the Country Land and Business Association (CLA) explained: “This will provide a significant degree of reassurance to farmers and other landowners across the country.

“We have been clear, since the start of the EU referendum campaign, that this is the first decision ministers had to make to reassure rural businesses in the event of a Brexit vote. It is therefore a strong signal that will give confidence to businesses considering their future in a difficult agricultural market.”

So, in the short term, this provides farmers and landowners some degree of certainty and gives government breathing space to develop UK agricultural policies which will be fit for purpose.

But it is a pity the government did not start planning for a post-Brexit vote until after the referendum.

James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk

DEFRA must get a grip on this payments shambles

Defra secretary Liz Truss must deal with the shambles that is the Rural Payments Agency and make it fit for purpose.

As the deadline for submission of 2016 Basic Payment Scheme applications has passed it has become clear that although the new online application system has been reasonably effective where all the field information is correct, there are significant problems where errors have occurred over last year’s claim. 

Consequently some farmers have still to receive any payments from last year and many of those who have received payments have been given the wrong sum.

Most of the problems seem to stem back to the fact that for one reason or another land parcels do not seem to have been properly connected to the farmers who claimed against them in 2015.  This may be because the Rural Payments Agency has not yet processed the many land changes which were notified to them almost a year ago, or because of human error or technical glitch.

Whatever the reason, the result is that some farmers have had to submit this year’s claim based on information submitted last year but not updated on the RPA’s online mapping system, which is going to compound the problem in processing this year’s claims. 

Also many farmers are having to submit their claim partly online and partly on paper where the land is not shown properly on the digital plans.  I can only imagine the chaos this will cause trying to re-unite these two parts of the same claim.

This leaves many farmers feeling vulnerable to problems that may arise as a result of errors that should have been addressed last year but which may now have a hangover effect on this year’s claim as well. 

I hope that if errors from last year affect this year’s claim through no fault of the applicant, the RPA will take a pragmatic view and just get on and sort out the problems without penalising the farmer. Sadly there is no guarantee this will happen. 

In the past it was often “heads we win” and “tails you lose” as far as such problems are concerned.

It is also clear that a lot of errors have occurred in relation to the number of BPS entitlements held by farmers. 

To make a successful claim a farmer needs to match one entitlement with one hectare of eligible land.  However, my experience is that following last year’s claim a significant minority of farmers have found that the number of entitlements they have been paid on is less than the number of hectares they declared in 2015 and in turn the number of entitlements carried forward into 2016 has been similarly reduced.

This is a double whammy as these farmers have not only had their 2015 claim reduced but they are in danger of being paid less going forward in 2016 and beyond unless the original problem can be rectified.

These are just a few of the many examples of problems and glitches which have ocurred in the new online system for which one can obtain no logical explanation from the RPA.  They now have their work cut out to sort out the many problems that remain from 2015 before the 2016 payment window opens on December 1, which must seem worryingly close already for those in the RPA responsible for making the BPS system work.   

James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk

Basic Payment Scheme applications

With less than two weeks to go before the submission deadline for this year’s Basic Payment Scheme applications, it is astonishing that 10 per cent of last year’s applicants have yet to receive any money for last year’s claim. 

As a result the RPA chief executive Mark Grimshaw announced at the last NFU Council meeting that bridging payments will be made to those who have received no money at all.

Mr Grimshaw explained that the final applications from last year were proving more difficult to process than had been anticipated because of the complications caused by a new inspection regime and changes to how commons applications are processed.

This may be true but what worries me is not just the 10 per cent who have received no payment, it is also the huge number of errors that have come to for those who have received payments.  From my experience of completing such forms about 25 per cent of applicants I have dealt with are experiencing issues of one sort or another.

These vary from inexplicable underpayments or fines for errors which do not seem to exist, the loss of entitlements, missing land on the online maps or the inclusion of land which is not part of the farmer’s holding.  Also, in some cases field boundary changes which were made last year have still to be processed which makes it very difficult to deal with this year’s application.

For example if the land changes from last year have not been mapped what should an applicant put on this year’s forms?  This is just one of the many practical issues causing farmers and their agents a real headache and yet there seems no way of sorting out even the simplest of problems in a timely manner. 

The current advice is to email the RPA with your query and then you receive an email by return which says: “Thank you for contacting the Rural Payments Agency. If we need to get back to you, we'll reply within 10 working days.”   

Sadly I have rarely received a reply from the RPA within 10 days. Clearly they do not think they “need” to reply but I can assure them that they do.  If they do not address these queries very soon, the errors from last year’s claims will be compounded into the 2016 applications which will make unravelling these problems even more difficult.

Unfortunately this does bring back memories of the fiasco that occurred in 2005 when the BPS’ predecessor subsidy system was introduced, the fallout from which was both costly in terms of EU fines being imposed on the government and hardship to farmers.  I just hope this will be a relatively minor fiasco in comparison.

James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk

Farmers, Basic Payment Scheme and fraudsters

Many farmers now receiving their Basic Payment Scheme money are being targeted by fraudsters.

Getting to know a few of the tricks the criminals use can make all the difference and I set out below a few useful tips to counter the threat.

Farmers are often targeted through phone calls or emails from individuals who claim to be from the customer’s bank, a business customer, or even someone in authority from within their business. The aim is to trick you into making payments, or for you to allow them to access your systems so they – the fraudsters – can collect your money.

Steps you can take to help protect yourself from the fraudsters include:

Validate requests: You should never receive a phone call from someone asking you to make a payment. If you do, independently source the contact details of the person they claim to be. Similarly, if you receive an email asking for payment or notifying you of a change in bank details, get in touch with a contact you know using independently sourced details and check the request was genuine. Email addresses can be impersonated and made to look like they’re from a genuine contact.

Watch out for impersonators: Sometimes a fraudster might attempt to impersonate someone within your business, or a trusted contact such as a bank. Take the time to make sure callers are who they say they are and be wary of caller displays on your phone. Fraudsters can and do use systems to display a number that may be known to you. 

Be wary of information seekers: If someone calls you asking for information that you’d expect them to already have, be on guard. For example, your bank will never phone or email asking for account details, passwords or online banking authorisation codes.

Look out for unusual transactions: If you receive a payment into your account that you aren’t expecting, check it out. If it’s not yours, make sure that the funds are cleared before returning them, and that they go back into the account they came from. Your bank should be able to help you with this.

Keep secrets: Never give out your online credentials, PINs, passwords or authorisation codes to anybody who calls, emails or texts you.

Don’t be rushed: Criminals will often express urgency and offer inducements to make you act quickly, so make sure you take the time to thoroughly check any requests to make payments or to amend payment details. Ignore any requests to move money to a new account to keep it safe, as your bank will never ask you to do this.

It is a sad state of affairs but it seems the answer is to never trust anyone who contacts you by phone or email unless you are absolutely certain you know who they are and why they need the information they are requesting.

James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk

Exchange rates for European support payments for farmers have been fixed for 2015

The Euro/pound exchange rate for European support payments for farmers has now been fixed for the 2015 year.  

Previously this conversion rate was fixed on the exchange rate of September 30 only, but this year it is set on the average exchange rate throughout the month of September.

The reason for the change is to reduce the volatility and unfairness that can be caused by using just one date to fix the conversion rate for the whole year, but despite this sensible move the value of the euro has remained subdued.  

As a result the conversion rate has been fixed at the rate of one euro = 73.14p which is the lowest farmers have received for eight years and six per cent down on last year’s rate.

However, because of the introduction of the new Basic Payment Scheme this year, we are still a long way short if understanding how this will actually translate in terms of cash in a farmer’s pocket. This is because the Rural Payments Agency (RPA) still has to calculate the actual value of “a Basic Payment Entitlement” before the conversion rate can be applied.

Here there are still a number of unknown factors which need to be sorted before the value of an entitlement can be calculated.  These unknowns include: 

1. The effect of rebalancing entitlement payments between Lowland, Severely Disadvantaged and Moorland areas
2. The change in the number of entitlements claimed compared to the previous Single Payment Scheme due to the introduction of a minimum claim size and other new rules
3. The deductions which will be made to fund the National Reserve and the Young Farmer Payment
4. The annual change to the Basic Payment Scheme National Ceiling (budget)
5. The rate of “Financial discipline” (basically budget cuts) which may be imposed by Europe

Then there is the question of when the new payments will be made.  Under the old scheme, in recent years most payments were made shortly after the payment window opened in December, and the RPA continues to sound confident about “making the majority of payments in December and the vast majority before the end of January”.  

However, many commentators are pessimistic that the RPA will achieve these timescales and are suggesting farmers should not budget to receive payments until February or March next year.  

This Christmas present will obviously put many, already cash strapped farmers under even more unwanted financial pressure in 2016. 


James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk

Europe – in or out

Europe – in or out – is a hot topic and the debate is particularly important for the UK farming community.

Having just had my annual catch-up with many clients as we have completed their Basic Payment Scheme forms, there is no doubt that the mood is generally downbeat as most farmers are struggling with the impact that low commodity prices are having on their business.

So the support payments received from Europe through the CAP have once more become a very important income stream for most farmers. Whether that is a good thing is a different question, but I suspect many farmers will be relying on such payments to make a profit this year.

This is a significant change from the last few years when commodity prices were higher and the underlying farming business was able to make a profit without support from Europe. This led a number of my clients to question the need for support payments because of all the cross compliance regulations attached to them, but I hear this radical opinion less often now.

That does not take away the immense frustration many feel about the endless red tape and regulations, many of which seem to have their roots in European legislation, although whether our own government “gold plates” these rules is a moot point.

David Cameron would ease the concerns farmers about Europe if he could cut meaningless red tape, like the “greening” rules associated with the new Basic Payment Scheme.

Then there is the issue of European workers. When I started practising in Somerset more than 25 years ago I cannot remember any non-British (and very few non- Somerset) farm workers here. The contrast today is quite extraordinary, especially on intensive dairy farms where Eastern Europeans are almost the norm.

So, before any farmers vote to get out of Europe because of all the hassle associated with regulations, they need to ask themselves some serious questions.

First, would a British government of any hue provide the same level of direct payments that farmers now receive via the EU? My hunch is they would not.

Second, how would some more intensive farms staff their holdings without the availability of a European labour force? I suspect attracting a replacement British workforce would prove significantly more expensive.

Third, do you think that rules and regulations will significantly diminish if we are outside the EU? I have my doubts as we seem perfectly capable of creating our own red tape.

Fourth, if we think the playing field is uneven when we are in the EU, do we think it will get better or worse if we are outside? I don’t think this question is very difficult to answer.

Farmers who are understandably frustrated by the endless rules and regulations coming out of Europe should think twice about voting to quit the EU because our exit would herald a challenging new world for agriculture in this country.

There is an argument that these dramatic changes would benefit the industry, as it did in New Zealand some years ago, but there would undoubtedly be significant collateral damage affecting the wider farming community.  

James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk