Time is running out for the Rural Payments Agency, which needs to pay out £80m in two weeks if it is to meet the EU deadline of making 96.14% of all single farm payments by 30 June.
The agency this week managed to authorise interim payments to 841 of its “top priority claimants” – people who were excluded from last month’s partial payments run.
But more than 2000 commercial farmers are yet to receive any money at all, along with 11,000 claimants with claims worth less than €
NFU chief legal adviser Julie Robinson said it was highly unlikely the agency would manage to pay 96% of the value of all claims by the end of the month.
As a result, the NFU is pushing for interest on any validly-claimed payments that are still outstanding at the end of the payment window.
“The government has, in the past, paid compensation in the form of interest when it has failed to make payments on time,” she said.
“For example, 2001 bovine scheme claims ran very late owing to processing issues and a significant number of valid claims were not paid by the end of the relevant payment window of 30 June, 2002.”
Derrick Wilkinson, senior economist for the Country Land and Business Association, said he thought the agency might pay the 11,000 small claimants by the deadline, but he was concerned about the remaining 2000 farmers.
“As soon as the RPA gets to the 96.14% ‘magic marker’, then the pressure will be off it and agency staff could switch attention to 2006 claims.
But £60m will still be left to be paid, which means people could be waiting for substantial sums.”
What is also not yet clear are the consequences if the RPA does fail to meet the EU payment deadline.
Technically, the government should face a bill of millions of pounds because heavy financial penalties are supposed to be applied to the money yet to be paid out.
But the EU Commission has the power to relax the penalties and has indicated it may be willing to do this instead of extending the deadline to October.
A DEFRA spokesman said discussions were continuing with the commission about penalties.
A decision on whether farmers would be paid interest after 30 June would be taken later, he said.
“We need to look at the situation after 30 June. We need to determine the extent of what has, or has not, been paid.”