DEFRA SHOULD pay a proportion of the historic entitlement for English farmers‘ single farm payments in advance to avoid a serious cash flow crisis in 2005.
Exmoor farmer Oliver Edwards told junior DEFRA secretary Lord Whitty at the Royal Bath and West Show last week (June 3) that unless something was done farmers would face severe cash difficulties during the change from existing subsidies to the SFP.
The problem stems from the fact that existing arable area payments will be made between November 2004 and January 2005, while the SFP will be paid from December 2005 to June 2006.
A similar problem arises for livestock farmers, who currently receive 60% of their payments in advance, between October and March, and the balance between April and June.
Carmen Suarez, senior economist at the NFU, said: “Some arable producers will therefore get their area payment in November this year and may not get their next payment until June 2006 – a gap of 19 months.”
Livestock farmers could receive a lump sum in October 2004, the 40% balance in April 2005 and not receive any further payment until the SFP in June 2006.
“The resulting cash flow problems could hinder normal investment plants and the servicing of existing debts,” said Mrs Suarez.