DEFRA secretary David Miliband has announced that the Rural Payments Agency will pay interest to those farmers who have not received their single farm payment by 30 June, so long as the fault lies with the RPA.

In a statement to the House of Commons on Thursday lunchtime (22 June), Mr Miliband repeated his apologies for the distress caused by SFP delays.

There had been some progress in recent weeks but the situation was far from satisfactory, he said.

“The EU defined payment window for making 2005 SPS payments runs from 1 December until 30 June. Work is continuing to pay as many claims as possible by 30 June.

“However, farming leaders have made representations to me on behalf of any farmers who do not receive the full sum due to them within the payment window. I have therefore authorised the RPA to make interest payments of the London Interbank Offered Rate +1%, calculated from 1 July, in respect of any payments where responsibility for the delay rests with the RPA.

“This will be subject to a minimum interest payment level of £50. Further details will be given on the timing of these payments once the RPA has assessed how they can be integrated most effectively into the existing payment schedule.”

The minister said there were about 2300 commercial farmers with claims of over €1000 waiting for a payment and another 18,785 waiting for a top-up.

Of the approximately 10,500 eligible HFA claims, 5000 had been paid in full and a further 900 authorised for partial payments, he said.

Turning to the 2006 scheme year, Mr Miliband said the year was going to be very challenging.

“Against this background, farming leaders have understandably called for partial payments to be made under the 2006 SPS.

“I have both discussed the need for the necessary EU legislation to make partial payments with Commissioner Fisher-Boel and authorised the RPA to start work on necessary systems.

“However, until the RPA Chief Executive has had an opportunity to make a realistic assessment of the prospects for full payments, I do not want to commit to a particular timetable or specify whether or when partial payments might be made.”

The NFU described the statement as “helpful” because it clarified a number of outstanding issues.

Peter Kendall, union president, said: “It’s good to get an acknowledgement from the Secretary of State that this year’s problems have caused real distress.

“The announcement that the government will pay interest is welcome in that it goes someway towards recognising the costs of late payments. However, interest at 1% over base bears no relation to the true cost of delayed payments to the farming industry.”