14 April 1995

Following the rules leads to trouble

RETIRED sheep farmer Leslie King is in a "Catch 22" situation which could leave him several thousand pounds out of pocket for simply following MAFF advice.

At the end of last year Mr King, who had already sold his Strangways Farm, Westham, Somerset, decided to cash in the remaining 41 units of sheep quota. A deal was struck with a Mr Morris of Newport, Isle of Wight, at £23/unit net, and the money duly placed with agent Townsend, pending confirmation by MAFF.

But in December MAFF wrote to Mr King saying the transaction could not go ahead as he had not used any of his quota for 1993 or 1994. The rules specify that 50% of an allocation must be used in any two-year period.

To meet this condition, MAFF suggested Mr King lease out his entire 91 units of 1993 sheep quota during the second transfer period, and sent him the appropriate forms. Mr King duly arranged the lease with a Mrs M A Butterfield of Ottery St Mary, Somerset, for £12/unit.

But then MAFF wrote again, saying this lease could not go ahead. New rules stipulated that, if an earlier claim for ewe premium had been rejected, any surplus quota could not be leased out.

In 1993 Mr King had claimed against his full quota, but due to illness had to sell half his sheep before they had completed their retention period. That claim was rejected.

Different interpretations

"On one interpretation, MAFF says he has not used his 1993 quota. On another, they say he has," observed Townsend agent James Sheppard.

If the 1993 lease is confirmed void, not only will Mr King lose the income from that deal, he will also lose the sale of his 1995 quota and could face compensation claims from both parties.

MAFF suggests Mr King should lease out his 1994 quota when the second transfer period is opened this spring instead. But that would still mean reneging on his 1993 lease deal. Also, he had already sold 50 units of quota in November 1993.

"We have only done what MAFF advised us to do," said Mr King. "They said we were entitled to lease out our 1993 quota, but now they have changed the rules and are applying them retrospectively."