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

The Rural Payments Agency has fallen short of its pledge

Sadly it is no surprise that the Rural Payments Agency has fallen short of its pledge to make the new Basic Payment to the “vast majority of farmers by the end of January”.  

By January 27 approximately 70 per cent of claims had been made but this represents only about 60 per cent of the total payments, indicating that the majority of claims left to be paid are the larger ones.

The NFU said: “Our top priority is to get money owing paid out to farmers as soon as possible. We are also working with the RPA to try to ensure that lessons are learnt and 2016 sees a far smoother delivery. For the latest on BPS and our work on behalf of our members visit www.nfuonline.com/bps.”

My experience support sthe evidence above in that there was a flush of payments made very early in December to small or simple applications where no changes were made to the mapping information and since then the number of farmers being paid has dwindled with many of the bigger and so called more “complicated” claimants left waiting.

That is not to say the RPA staff are not working hard because I have had emails from them on Sundays, but they are only just starting to process some of the information which was submitted last June.  

One of my recent communications from the RPA was about a plan submitted with the application form which has obviously been lost. I was able to scan a copy of the plan I had retained on file and email it straight back to them, but the plan should not have been lost in the first place and it had taken seven months to discover it was lost.  

This of course will result in a delay in my client receiving his payment and he will not want to pay me for my time dealing with the RPA’s inefficiency.  So everyone seems to be losing out, which is a familiar tale for anyone involved in dealings with the RPA over the years.

NFU vice-president Guy Smith said it was impossible for farmers to run their businesses without knowing when they would be paid, adding: “Defra and its agencies must be more transparent and clear as to when they think this money will go out, rather than hiding behind a veil of confusion.”

In a recent press statement, the RPA chief executive, Mark Grimshaw said: “We understand the importance of BPS payments for farmers and our priority has always been to pay as many farmers as quickly as possible.”

Mr Grimshaw went on to say the RPA is working seven days a week to make payments and that a wide range of claims had been paid to small, medium and large enterprises. He also said claims would continue to be paid as they were checked and completed - let’s just hope those checks can be completed quickly because it will not be long before many will be starting to think about this year’s claim.

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

Christmas has come early

Christmas has come early for tens of thousands of farmers as the Rural Payments Agency has surpassed the expectations of many industry commentators by starting to make Basic Payment Scheme payments on time.

I was relieved and surprised to receive notification from the RPA at the end of November that a number of clients were to receive their Basic Payment Scheme payments on December 1.  This was the first day of the payment window and the RPA must be congratulated on getting at least some of them out so promptly.

The RPA has confirmed that more than 33,000 farmers in England were paid their 2015 BPS claim on December 1 and they have committed to paying at least 44,000 claimants (50 per cent of the total) by the end of December. This is in addition to having made £21 million of EU dairy support payments to almost 11,000 dairy farmers in England, Scotland, Wales and Northern Ireland as I reported previously.

NFU vice-president Guy Smith said: “When the RPA starts talking about a percentage, we want to see value as well as volume going out. We do not want to see one million £10 cheques. We want to see a good cross-section of payment claims going out.

“A significant amount of money has gone out – and we have to congratulate the RPA for that. But the fact they have only paid just over one-third of applicants increases the anxiety among the have-nots.”

It is clear to me from those payments I am aware of that those which have been made are for small and relatively simple claims. So there is concern that some of the larger, more complex claims may remain unpaid for some time to come.  This worry has been raised with the RPA by industry leaders and as a result the RPA has written to all complex cases, which they do not expect to pay by the end of January. 

The official payment window runs from December 1, 2015 to June 30, 2016, so some farmers could still be in for a long wait and I urge banks to help with the cash flow crisis that will be caused by these delays.

But, at this stage all we can hope is that the RPA continues to surprise us with good news and even the most complex of claims will be made early in the New Year.

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

Give farmers a break – that is the plea to the Rural Payments Agency

Farming leaders are quite rightly calling on the RPA to take a lenient attitude to genuine mistakes made by farmers this year as the new Basic Payment Scheme is in such chaos.

The RPA have had to delay the application deadline by a month following the abandonment of their online application process in favour of a paper based system.

The failure to get the online process up and running means farmers will now have to carry out calculations manually which previously were supposed to be done automatically by the online system.

So farmers are now exposed to making errors which could have a significant impact on the payments they will receive as penalties are applied.

Also, having printed out a number of the forms that I have received by email on behalf of clients, there is clearly plenty of scope for basic mistakes to creep in.

For example, in contrast to the old paper forms which were printed in a booklet where all the information on one field could be completed on one line crossing two facing pages of the booklet, this is no longer possible because the two pages now have to be printed separately.

Therefore part of the information for each field will have to be completed on two separate sheets of paper. There are 11 fields per sheet and 10 columns to be completed for each field, four on the first page and six on the second page.

What used to be a reasonably straightforward task of following one line across two pages in a booklet has been made more complicated than it should.

A facility to print two A4 pages on one A3 sheet of paper would have been a great help both to farmers and the RPA but that does not seem possible at present.

So if your farm receives a visit from an RPA inspector this year, you should not sign off the inspector’s findings without looking at them very carefully and ensuring you have a witness present as to what is said.

In my experience such inspectors often downplay the potential consequence of their findings, partly so they can complete their task and possibly also because they do not always appreciate the consequence their findings may have on a farmer’s support payments.

Therefore utmost care is required this year in completing the BPS application form and advice should be sought if an inspector comes to call later in the year.  

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

Basic Payment Scheme has slid into chaos

Giving credit to the Rural Payments Agency does not come easy as their administration of the Basic Payment Scheme has slid into chaos.

Last week the Western Daily Press reported the shock announcement by the RPA that, for this year at least, the new online computer system has been abandoned for making the claim.

However, I commend the RPA for facing up to the very real problems that farmers and their advisors were facing with the failings of the online process.

We are also grateful that the EU Commission has extended the deadline for submission of the BPS application from May 15 to June 15 because of problems being experienced with the introduction of the new scheme throughout Europe.

But the practical details about how the application process will now work are only just emerging and there are a number of important points to note.

First, you still need to ensure you are registered on the new RPA online system. This is usually reasonably straightforward and the easiest way to do this is to call the RPA on 03000 200 301.

Once registered you will need to check your business details, appoint any agent you may wish to deal with your claim and check the level of “permissions” you wish to give yourself or your agent.

Then, although the deadline for the submission of the BPS application itself has been extended to June 15, the deadline for submission of entitlement transfers remains May 15. This is important because in this first year of the BPS, any spare entitlements which are not claimed will be confiscated permanently and their value placed in the National Reserve.

This means claimants must make sure they have matched their eligible land with the equivalent number of entitlements and if any adjustment in their number is required, these need to be made by May 15 and not June 15. To transfer entitlements you need to complete a paper RLE1 form which can be downloaded from the RPA website.

To make a claim, the RPA have produced a blank claim form (BPS5) which can also be downloaded from the website. However, the RPA have said they will be emailing sometime in April pre-populated forms to people who claimed last year with a copy of their RLR maps. So it seems sensible to wait for these pre-populated forms and plans to arrive rather than trying to complete the blank form from scratch.

This is obviously a busy time in the farming calendar and so it is welcome that the application deadline has been pushed back to June 15 but this is no reason to be complacent because there are still tasks which need to be dealt with by May 15.

Farmers and their advisors need to keep their wits about them during this crucial period.  

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

Single Payment Scheme payments: the lowest in 7 years

The value of this year’s Single Payment Scheme (SPS) payments was set last week at 77.7 pence per Euro which is the lowest rate for 7 years. The Single Payments, which are defined in Euros, are converted to Sterling in order to be paid to British farmers, based on the Euro/Sterling exchange rate on 30th September.

This will come as unwelcome news to farmers who are already facing difficult trading conditions as wheat prices have plummeted to around £100 per tonne while milk prices continue to fall with most dairy farmers now being paid below 30 pence per litre for their milk and some as little as 25 pence per litre. At these prices farmers will be losing money and with European support payments also falling farmers are facing a tough year ahead.

It is estimated the Single Payment received by farmers this year will be approximately 12% less than last year which is in part due to the exchange rate referred to above but also due to other deductions.

These other deductions include 10% compulsory modulation and a 12% transfer from direct payments (Pillar 1) to rural development (Pillar 2). Together these total 22% which is 3% higher than the deductions imposed in 2013. In addition there is also a 1.6% cut in the UK CAP budget and the European Commission’s Financial Discipline Mechanism (FDM) will also be imposed on those farmers receiving more than 2000 Euros. The FDM rate is currently proposed to be 1.3% although this could vary up or down.

NFU vice-president Guy Smith commented, “For many farmers, looking at increasingly tight cashflow projections in the face of plummeting commodity prices, news that SPS payments are also going to be down will feel like another unwelcome turn of the financial screw.

“Farmers should always be wary of crying ‘wolf’ too early but many of us are getting nervous that there might be some serious financial difficulties on the horizon at the moment,” he said.

So, farmers are definitely feeling the pinch and this was evident at the Dairy Show held at the Bath and West showground on 1st October. Although the show itself appeared to be a great success there were definitely a lot of worried dairy farmers around although opinion appeared to be divided as to how to deal with the falling milk prices. Some favoured direct action while others seemed resigned to the fact that world commodity prices have fallen sharply and this was the primary driver as to why prices have fallen sharply.

However I think all were agreed that they need to be treated fairly by the various milk purchasers so as to ensure farmers are not taking an unfair proportion of the burden imposed on the whole industry by the fall in world commodity prices. It is clarity on this particular point which I think needs to be sorted urgently.  

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

Rural Payments Agency's online system

Last week saw a worrying glitch in the Rural Payment Agency’s (RPA’s) online system for claiming Single Payments, the application deadline for which is approaching on 15th May.

I for one was unable to log on to the system over the weekend of 12th and 13th of April and it is understood the problem persisted for some, well on in to the week. On contacting the RPA on Monday 14th April I was told that the problem was not in fact to do with the RPA’s own online system, which I hasten to add is generally excellent, but it concerned a problem being experienced by the “Government Gateway”.

At the time of writing it is not clear whether the problem has been conclusively resolved but what this does highlight is the potential fragility of relying entirely on online systems. This is of particular concern for the RPA who are intending to extend their reliance such systems when the new Basic Payment Scheme replaces the current Single Payment Scheme (SPS) in 2015.

The problems recently experienced were annoying but not catastrophic, but if they had occurred very much closer to the application deadline, the financial consequences of not getting the SPS application submitted on time could have been far more serious.

I am not suggesting we revert to the old paper forms but as our reliance on computers increases so too does our vulnerability to system failures or perhaps more worryingly online fraud of one form or another and in this context many farmers are probably quite exposed. This is because, for older farmers in particular, although many realise embracing computers is now a necessary evil , whether that be to deal with VAT returns or SPS applications, they are not familiar with the online “antics” of some fraudsters which are likely to be more familiar to younger or more frequent users.

Therefore, the government and RPA in particular are urged ensure that the government’s policy of “digital by default” does not leave elderly “non digital” farmers out in the cold and ensures the systems are robust so that all users are able to access the online systems at all times. After all the whole point of digital by default is to increase the efficiency and cost effectiveness of the delivery of schemes such as the SPS and if the systems are unreliable this will lead to frustration and potentially significant financial losses.

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

Rules Need Clarifying

Confusion reigns as to whether farmers can continue claiming Single Payments where they graze sheep under solar panels and in my view the Rural Payments Agency should be called to clarify the rules urgently.

At present the advice contained in the 2013 Single Payment Scheme Handbook is not entirely clear. It states that, “the area taken up by the solar panels is ineligible, unless the area under it is capable of being grazed. If the primary purpose of the land parcel is for agriculture, the rest of the land parcel will be eligible. If the primary purpose of the land parcel is for operating solar panels, the whole land parcel is ineligible.”

The problem here is that in very many large scale solar parks, the land underneath the panels will be planted to grass which may well be capable of being grazed by sheep for example and so on the face of it, this land may be eligible for claiming single payments. However, in my view it is questionable whether it can be argued the primary purpose of the land parcel is for agriculture.

Accordingly my advice to farmers is not to claim the land under solar panels as being eligible for claiming single payments. This is because I believe it is hard to claim that the “primary” use of the land is for agricultural purposes, otherwise why would a farmer or developer have gone through the expense and hassle of obtaining planning consent for the solar panels and then spent millions of pounds erecting them on the land in order to generate electricity, the value of which will eclipse the value of the grazing which may be available for a few sheep.

If my thinking proves correct, this will result in many thousands of acres of farmland becoming ineligible to claim single payments which will result in a matching number of single payment entitlements coming on the market to be sold. The significance of this is that we are currently moving towards the trading deadline of 2nd April for entitlements to be sold and claimed on in 2014. If a significant number of “solar panel entitlements” now hit the market it is likely the price will plummet because there will effectively be more entitlements available than there is eligible land to claim them against.

If of course my interpretation of the rules is incorrect we will have the peculiar situation of farmers being paid a subsidy to graze the land under solar panels which in themselves are also receiving significant support payments to produce renewable energy. This does not seem appropriate and so I think it is important that the rules relating to this issue are clarified as soon as possible.

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

Moving Businesses Forward into the Digital Age

Last week saw the opening of the Rural Payments Agency’s (RPA’s) online facility for applying to the 2014 Single Payment Scheme (SPS). In an attempt to encourage many more farmers to apply online as opposed to submitting paper forms, more than 40,000 farmers, landowners and agents across England should already have received postcards, promoting “SPS Online”.

Having used the system myself I can certainly vouch for its simplicity and it helps prevent applicants making silly mistakes but perhaps the most useful aspect is the fact that one can be certain the form has been successfully submitted which was not always the case when relying on the postal system. However, one must not be hoodwinked by the “simplicity” because the form still needs to be checked to ensure the correct fields are shown and to deal with any necessary amendments.

The RPA Operations Director, Paul Caldwell said: “The RPA is one of the leading agencies in delivering online facilities, and has worked hard to provide a number of schemes including the highly praised SPS Online. The first wave of contact (the postcard) is part of the Agency’s ongoing drive to help farmers, landowners and agents move their businesses forward into the digital age.”

As a consequence of this drive, local drop-in centres are no longer available to help farmers with any queries that they might have about their entitlements or the application process, so former users will be among those who will get offers of help from the RPA.

To use SPS Online for the first time, claimants must first register on the Government Gateway’s website; www.gateway.gov.uk . However a word of warning is being expressed because some farmers are receiving a bogus email from gateway.confirmation@gateway.gov.uk informing them that the RPA has not been able to process their claim. The email also has an attachment that contains a virus and so the RPA’s advice is to not respond to the email and to delete it immediately.

This sort of scam highlights some of the dangers of the digital age that the Government and its Agencies are keen for us to embrace and will serve to make those who are already nervous about submitting such important information online, even more so.

A certain amount of caution is always needed when using any system online but with care, even an “digital luddite” like me can see the advantages will certainly outweigh the disadvantages.

If any farmers would like to know more about applying for and submitting their Single Payment Scheme applications online they can contact Carter Jonas’ Rural Team on 01749 683381.

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

The Rural Payments Agency

The Rural Payments Agency (RPA) has reported that it has successfully paid Single Payments to 95,600 farmers in England on the first day of the payment window being 2nd December this year. This is the best the RPA has ever achieved since the Single Payment Scheme was introduced in 2005 and it is a far cry from the chaos and delays which were experienced by many farmers in the early years of the scheme.

Indeed the payments made on 2nd December exceed the RPA’s own payment targets, which is good news for farmers, many of whom in the livestock sector in particular are still reliant on these subsidies in order to make a profit.

However, there is a concern that with the forthcoming reform of the CAP which will come in to force in 2015 that the RPA does not take its eye off the ball. It is imperative the RPA makes sure that as far as possible the progress that has been made in recent years is not squandered when the new scheme is introduced.

There is hope that the new scheme will be easier to administer because the government has sensibly decided to roll over the existing “entitlements” in to the new scheme. This will mean farmers will not have to go through a fresh registration process under the new scheme but there will no doubt be many other complications which may have the potential to cause problems.

The entitlements are important because in order to claim the area based support payments under the Single Payment Scheme and the new successor scheme, farmers need to match the number of entitlements they hold with an equivalent area of qualifying farmland. Therefore, as a result of the decision to roll over existing entitlements in to the new scheme, the value of entitlements has appreciated from around £200/entitlement to around £300/entitlement because there is now certainty that they will be around until 2020 which is when the CAP will next come under review.

Accordingly, those farmers with spare entitlements may consider selling them sooner rather than later because under the new scheme it is understood that any entitlements which are not claimed in 2015 will be confiscated without compensation. These entitlements will be put in to the National Reserve for distribution to other claimants, the rules for which are as yet unknown.

Further, any claimants with less than 5 hectares of land will no longer be allowed to claim in the new scheme which means they may wish to offload their entitlements now even though this would preclude them from making a claim in 2014.

So, it seems just as the RPA have got to grips with the existing Single Payment Scheme after 9 years of trying, there is a danger things could go awry as a new scheme is introduced in 2015. However, I hope the roll over of entitlements will make this process much more manageable than it was in 2005 although that does not mean to say the RPA or farmers should be complacent. The new scheme will present both opportunities for some and dangers for others and farmers will need to keep abreast of developments as the detail of the new scheme rules start to emerge over the coming months.

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