12 July 2000
MAFF to pay up for subsidy delay
By FWi staff
THOUSANDS of farmers are to be compensated in a landmark decision after the Ministry of Agriculture delayed subsidies paid to arable producers.
In response to a report by parliamentary ombudsman Michael Buckley, MAFF will compensate farmers who suffered losses after subsidies were delayed.
It agreed to pay an estimated 500,000 in interest to about 5550 farmers whose arable area payments were late after delays in processing claims in 1995.
A MAFF spokeswoman attempted to play down the decision, claiming that it did not have implications for any delayed subsidy claims in the future.
“We will be paying the money in deference to the ombudsmans report, but we dont accept that we were at fault in this case, she said.
But officials from the office with responsibility for investigating complaints about government departments believe the move could be a landmark decision.
Barbara Bachelor, spokeswoman for the ombudsmans office, said: “I think they would find [the claim that this does not set a precedent] very hard to justify.”
“This has huge ramifications – they should have paid interest before.”
The ombudsmans report concluded that the farmers involved had suffered financial losses through no fault of their own.
It listed “poor planning, under-resourcing, inadequate information, failure to administer the scheme effectively and the corruption of computer-held data” as the main causes of problems.
Mr Buckley wrote: “My own view is quite clear; there was a significant mal-administration.
“I find MAFFs stance in refusing to pay interest for the loss of use of the principal sum to be indefensible.”
The report reveals that MAFFs own advisors said they felt there were strong legal arguments to award interest in compensation for delays in December 1995.
They went on to say if a farmer challenged MAFF in court about the issue, then the ministry would probably lose.
“They took legal advice and they still resolutely refused to pay interest – they have brought this on their own heads,” said Ms Bachelor.
An spokesman for the National Farmers Union said the union had received a number of complaints about late payments and welcomed the decision.
“It is shocking that the farmers have had to wait for payments for so long.”