My office has been trying to analyse the recently announced UK fines issued by the EU in respect to Single Payment in order to try and inform us as to how this has and will influence the future monitoring of Single Farm Payment and Stewardship Schemes by the RPA and Natural England. At today’s exchange rate the penalty for England was some £95 million, with a £3.7 million fine for the Rural Development Scheme. It may not come as a great surprise that we have found it “hard going” to get much information from the RPA about these penalties, which are for the period between 2007-2009. I suppose that if your “end of term report” shows you came not only bottom of the class, but did twice as badly as any other Member State, you tend not to publicise this too much. Mapping problems at the Rural Land Registry was one factor which as we know resulted in re-mapping throughout the Region. EU auditors looked at a sample of SP5’s and what errors got through the RPA checks and found there was inconsistency in the way errors were dealt with and the ‘paper trail’ was not sufficient. They also visited a number of farms that had been inspected, and re-inspected them and found that not enough eligible area had been deducted on account of ineligible features. We have seen the implications of this with guidance provided in more and more detail. No wonder the Single Payment Handbook has grown since 2005 from 52 to 124 pages.
In respect to the Agri-environment Scheme penalty, the EU auditors considered the payment timetables were too flexible which did not allow for appropriate checking procedures between Agri-environment agreements and the Single Payment Scheme, to confirm eligibility for payments. As a result as we know the Single Administrative Cross-check (SAC) has been introduced which now is carried out every summer. Payment dates have also been rescheduled and we have noted on the ground inspectors now cover both Stewardship and Single Payment issues at the same time.
Chatting to a senior member of staff at the RPA as to how this has all come about, as normally one would expect the UK to be “top of the class” with our usual Anglo-Saxon fastidiousness, the response was the Anglo-Saxon approach had not been ditched. Indeed the UK had created the most detailed labyrinth of standards to be met by farmers which no other Member State had, but now we were being ticked off because we were not able to maintain these high standards! A truly ironic situation, especially bearing in mind the EU accounts haven’t been signed off by their auditors for years!
One becomes increasingly fearful that more and more farmers are finding it impossible to cope with the intricacies of the Scheme. One farmer I was speaking to this week had accidentally received by email a copy of some internal operational notes for RPA inspectors. These notes were in the style of a flow chart of questions and stated that; if the first question is correctly answered you then skip the next 30 questions. The first question in this instance was to the inspector, who was advised by the RPA: ‘if clearly the farmer understands the Single Payment Scheme you do not need to take matters any further in respect to the following questions’. If not, ask all the questions below. The logic being if you do not understand the Scheme how do you have a hope of being able to manage the land in accordance with cross-compliance etc, etc? We are finding more and more new clients are coming to us where they have been let down by their usual advisers who have not gone into things in enough detail.
How should this inform us when considering completing SP5 claims forms?
It has long been standard practice when setting up ELS and HLS agreements that a 10% “buffer” is included in the total number of options declared, so that in any one year one has some “elbow room” if inspected. It is becoming increasingly difficult not to consider the same approach with the SP5 now the 2013 Handbook has provided specific examples where they could use the intentional over-declaration penalty. If intentionally you have over claimed by one hectare or half a percent, the RPA will confiscate the entire Single Payment for that year. If this goes over 20% then twice an equivalent amount will also be deducted over the following two years. For large farmers one hectare may be a very small percentage of their overall claim.
Up to now, if one has had more eligible land than entitlements this buffer has been of limited use as the RPA have treated each enclosure on its own merits and one has not been able to offset an under-claim on one field against an over-claim on another. However if, following an inspection, inspectors can look at the whole farm situation and then a buffer is very valuble. Subsequently a buffer may only be of use at the moment if inspected, but then of course this is probably when you need it most. Interestingly the RPA are considering changing this at some point, so that a whole farm buffer will be of benefit in all circumstances.
Unfortunately as EU auditors only take few samples, it appears they are expecting the RPA to introduce new measures to cater for each and every query they find. It seems therefore, as we have experienced since 2009, the RPA have created “a rod for their own back” with their over conscientious interpretation of EU legislation which, because of the way the EU auditors operate, will cause a continuous tightening of the Single Payment Scheme. This is likely to run into the new scheme in 2015. In some ways, now, the RPA have no alternative as the penalties of ignoring EU auditors are so cringingly expensive to the Exchequor.