23 November 2001

Industrial action

may block subsidy

cash for months

By Alistair Driver

and Tom Allen-Stevens

SUBSIDY payments for arable farmers could be delayed for months by industrial action, the new Rural Payments Agency has admitted.

Action by DEFRA regional staff has cost the new agency "several thousand man days", said an RPA spokeswoman. The agency risks missing the January 31 deadline for making arable aid payments to some farmers if the dispute continues, she told farmers weekly.

Former MAFF staff belonging to the Public and Commercial Service Union are angry at being paid less than staff moved to DEFRA from the Department for the Environment. The industrial action means only about half the payments will be made within the next fortnight, the agency spokeswoman said.

Farmers leaders have warned that "unacceptable delays" in payments due to industrial action could force some farmers out of business. "This is likely to cause the collapse of many farming businesses that are already on their knees," said cereals committee chairman, Richard Butler.

The NFU has called on the government to inform banks of the delays so they do not penalise farmers. Grant Phillips, managing director of Barclays Agricultural Banking, promised to stand by affected farmers. "We understand that this is just a delay and we will be as supportive as we can."

George Dunn, chief executive of the Tenant Farmers Association, said many tenant farmers relied on subsidy cheques to settle debts with landlords. "Some have already received notices to pay, which must be honoured within two months of receipt. If no IACS cheque arrives by December or January, they simply wont have the money to pay and many will receive notices to quit."

The agency was set up in October but only took full over responsibility for subsidy payments from DEFRA and the Intervention Board on Friday (Nov 16). DEFRA faces stiff fines from the European union if it fails to make payments to 96% of eligible farmers by the end of January.

Only 50-60% of arable aid payments are expected to be made within the coming weeks compared with pay 60-70% in previous years. The agency spokeswoman said the extent of delays will depend on future industrial action and steps being taken by the agency to minimise disruption. &#42