Guy Smith, NFU Vice President, writes:
So, a new year dawns. It’s time to put 2015 behind us and look forward to 2016. But like a bad New Year’s Day hangover, there are some aspects of 2015 that just won’t go away – namely the wait for BPS payments.
Yesterday [January 4] the RPA announced they had hit their much vaunted target in that just over half the 87,500 claimants had been paid. The problem is that, at farm level, it certainly doesn’t feel like that. I’ve had dozens of calls from members along the lines of ‘I’ve been asking around and no one appears to have been paid – are the RPA dreaming this up?’.
My view is I don’t think they are being dishonest with the figures - we are assured they are fully audited - but there is clearly a bit of spin going on here.
Let’s do some maths:
- The total BPS fund for England is £1.45 billion
- The total amount the RPA have got out is £.43 billion
- That’s 30%, which is substantially less than ‘a majority’
If the RPA have paid 44,000 claims with £ 0.43 billion then that’s any average of just under £10,000 a claim. Meanwhile there are 43,500 farmers waiting for £1bn – that’s an average of over £20,000.
So while the RPA have paid some larger claims, the vast majority have been, on average, small. As we’ve said before, we appreciate that smaller farmers with smaller payments are just as important as larger ones but we need to keep an eye on the whole picture.
This is about getting payments out to farm business both large and small and many of these businesses, both large and small, are suffering chronic cash flow problems because of rock bottom commodity prices.
Furthermore, this outstanding £1 billion, when it eventually gets out to those who need it, will not just hang around in farm bank accounts but will pay bills that will benefit the wider rural economy. There are all sorts of rural businesses, not just farmers, desperately waiting for this money. Additionally there is the impact this will be having on over-draughts. £1 billion at an average borrowing rate of 3.7% equates to over £90,000 in interest everyday being sucked out of the rural economy. So we will keep the pressure on the RPA and their political masters in Defra to avoid thinking things are nicely ‘on track’. The situation needs extra and urgent action.
Our main concern remains those 15,000 plus people who have been told by the RPA they will not be paid until after the end of January. This category of painfully late recipients also need better information as to when they are actually going to be paid. No one can sensibly run a business on the basis they might be paid ‘sometime after January.’
Meanwhile we continue to keep a sharp eye on the next application year to make sure we don’t get a repeat of this present shambles in twelve months’ time.