Select Committee on Agriculture Minutes of Evidence



  1.1  The NFU welcomes the opportunity to provide its input into the Select Committee's inquiry into the operation of IACS in England and Wales. We welcome the inquiry's intention to investigate the implementation and operation of IACS in the other 14 member states. Gathering information on how other member states operate IACS has been of immense difficulty. Despite the system now having been in place for almost 10 years, the information available from other MS is scant and appears shrouded in secrecy. This does little to engender confidence that the system is being applied uniformly throughout the EU and constantly give rise to the belief amongst claimants in England and Wales that the system is simpler and far more efficient in other MS. While we do not believe this to necessarily be the case, any evidence that the inquiry uncovers to dispel this would be a welcome development.

  1.2  Our comments cover a range of IACS issues. The NFU was closely involved in the IACS and Inspections Working Group that was established as part of Minister's Review of Regulatory Burdens. While we were extremely satisfied with the outcome of that review group, there are a number of outstanding issues that still need to be acted on or resolved.

  1.3  We are, of course, extremely interested in the application of the IACS system in the individual commodity sectors. The Integrated Administration and Control System (IACS) is set out to administer the CAP support systems, for arable producers this means the Arable Area Payments Scheme and for livestock producers it covers a number support schemes:

    Sheep Annual Premium Scheme (SAPS).

    Suckler Cow Premium Scheme (SCP).

    Beef Special Premium Scheme (BSPS).

    Extensification Payment Scheme (EPS).

    Slaughter Premium Scheme (SPS).


  2.1  One of the key problem areas for livestock producers is that the area aid application for IACS is submitted at a different time of the year to the applications for the livestock support schemes. As a result of which a producer's business structure may have changed between the submission of the IACS form and the individual support scheme application, which is covered by the IACS form. The following are the application dates and retention periods for the respective livestock support schemes for 2000:

SAPS 2000

  Applications—5 December 1999 to 4 February 2000.

  Retention period—4 February 2000 to 14 May 2000.

SCP 2000

  Applications—1 July 2000 to 6 December 2000.

  Retention period—six months from date of application.

BSPS 2000

  Applications—1 January to 31 December (maximum 12).

  Retention period—two months from date of application.

EPS 2000

  Simplified scheme applications apply for EPS on the IACS Form. Standard scheme applicants give an indication of intention to apply on the IACS form and submit six mini census forms during the year to confirm the application.

SPS 2000

  Applications—1 January to 31 December (maximum 12).

  Producers need to demonstrate that the animal was on their holding for one month prior to it leaving the holding for slaughter.


Regulatory review group

  3.1  In February 2000, MAFF published the report of the Regulatory Review Group which had looked at the implementation and operation of IACS and inspections in England and Wales. In the short time available to them, the Group had looked to see whether the implementation of IACS particularly disadvantaged producers in England and Wales against producers in other Member States. They also looked at ways in which the operation of the system in the UK could be improved and made more efficient.

  3.2  In its conclusions, the Group found little evidence that UK farmers were particularly disadvantaged as many producers throughout the EU found the system bureaucratic and burdensome. However, the group concuded that:

    —  EU regulations are restrictive and leave little room for manoeuvre;

    —  development of databases and the use of technology offers significant savings to industry and Agriculture Departments;

    —  producers need to maintain better basic records and develop IT skills; and

    —  there is the need for an independent appeals mechanism.

  We are keen to hear of the progress that has been made on addressing all of the issues highlighted by the group. However, there are a number of high profile recommendations that we feel need to be urgently acted upon or, if action is being taken, information released as to the exact state of play. In particular:

Appeals procedure

  3.2.1  One of the key recommendations of the group was the establishment of an independent appeals mechanism. It was hoped that this would act as a transparent, swift and cost effective system for farmers to use to challenge rulings made against them. The group recommended that the Government should come up with proposals to be considered by the industry. It was hoped that the system could be up and running within 12 months of the paper's publication. We are concerned that to date no such consultation has been issued and the timetable for the introduction of the appeals mechanism, therefore, looks set to slip. The importance of the Review Group, and a great many farmers, attached to the appeals procedure cannot be underestimated. We would stress the need for an urgent consultation on the introduction of an appeals body as recommended by the Review Group.

IACS forms

  3.2.2  The group had also identified the general complexity of the IACS forms. This remains the case. The scope for error when completing the form remains high. This is true for the farmer completing his application but it is equally true for the Officials who input the data from the claimants form onto the Field Data Printouts. We are pleased with the Government's progress on introducing an electronic IACS form which will go a long way to eliminating the potential for clerical errors that have, in some cases, led to significant penalties. However, the uptake of electronic submission relies upon farmers with owning or having easy access to computers to make the applications.

  3.2.3  Even with the successful implementation of the electronic submission system, there will be a number of claimants who either cannot or will not submit claims electronically. This being the case we would stress the need to maintain a flexible approach to IACS form submission and retain the option for claimants to submit paper forms.

  3.2.4  We are also concerned at the delays caused to the payment of arable area aid on land that has been set aside for a non-food use. MAFF insist that payment cannot be made on such land until two forms, the producer's IACS 9 and the processor's NFC2, have both been received by the competent authorities. This will confirm that the product has been delivered to the first processor (or collector) and that it has been received by them. This can lead to significant delays in the producer's payment and does little to make the production of non-food crops on set-aside more attractive to producers. It is, of course, essential to ensure that all steps are taken to minimise the risk of fraud within the system. However, we believe that there are sufficient controls already in place to reclaim moneys paid to producers in the event of a problem without having to insist on retaining payment until both forms are received. We would urge for the rule to be changed to allow payment to be made to the producer upon receipt of the IACS 9.

Expansion of crops covered by IACS

  3.3  While most arable and livestock producers will be aware of the need to complete an IACS application, IACS now covers more than just the AAPS and livestock schemes. A growing number of schemes for other crops now fall under the IACS umbrella and we have seen instances in the past where growers and producers who have fulfilled their obligations under a scheme are facing penalties or disallowance as they have not also complete an IACS application. Where a scheme is brought into IACS, there must be a corresponding information claim to ensure that producers do fall foul of the new rules. This has not always been the case in the past.



  4.1  Mapping has been a source of confusion, concern and continued difficulty since the introduction of IACS in 1992. From the outset, it was clear that the Ordnance Survey was unable to meet the huge initial demand for farm maps from farmers wishing to claim under the scheme. While the initial difficulties were overcome, it was apparent that many of the maps available were out of date and inaccurate which resulted in a lengthy and expensive exercise for many farmers in updating the mapping available.

  4.2  We welcome, therefore, MAFF's commitment to introduce a GIS mapping system for all UK producers at the earliest opportunity. We believe, however, that the introduction of that system will only be successful if:

    4.2.1  Claimants are fully aware of the changes and are kept informed of developments as they happen.

    4.2.2  Where discrepancies occur between the field areas currently being used by a claimant and the new areas determined by GIS then there should be no penalty imposed upon the claimant. We do accept, however, that all future area aid claims should be made on the basis of the newly determined areas.

Field areas

  4.3  The inaccuracy of the mapping and the non-availability of maps covering significant areas of the UK have led to further knock-on difficulties. The greatest of these has been the consequences arising from instances where, following a field inspection, field areas are found to differ from those given on OS maps.

  4.4  There have been occasions where these discrepancies have been found, producers have been penalised for overclaiming even where they have relied upon existing OS data. While we fully accept that where a new area is "found" then producers should expect to use the new area for future claims, it is wholly inappropriate to penalise them retrospectively. The inequity of this situation was highlighted under the red tape review and the NFU was pleased to see its recommendation: that producers should not be penalised where they had used OS or similarly reliable field area which was later to be found different from a MAFF field inspection.

  4.5  Despite this however, we are still seeing a significant number of our members receiving penalties following a field inspection that has involved remeasurement. Even more worrying is that some of these penalties are being imposed retrospectively—even where the producer has based his claim on areas determined by a previous official field measurement.

The "Two metre rule"

  4.6  The UK is unique in the EU in allowing claims to be based on the actual area of a field rather than the area of the crop within it. Equally, regional yields in the UK yield regions are based upon whole field areas and are, therefore, lower than they would have been if they had been calculated on the cropped area. We believe this to be beneficial to the UK producer and the environment as the producer is under less pressure to plant the field to its full potential to maximise area payments.

  4.7  Last year, MAFF announced on the recommendation of the Commission, that they could not accept claims which included headlands wider than two metres. Where this was the case the entire headland had to be removed from the claim. While most claimants were not greatly affected by this ruling, a significant number of producers faced the prospect of having to reduce their claimed area by up to 5 per cent to account for headlands which were larger than the two metre restriction but were, nonetheless, traditionally sized field margins. In all likelihood, the size of the field margin was the same when the fields were first measured to calculate regional yields.

  4.8  The situation seems to be moving towards a satisfactory conclusion with the Commission being convinced that the UK is not permitting claims to be made on uncropped areas.

  4.9  The circumstances surrounding the announcement bring to light two problem areas:

    4.9.1  Firstly that the Commission is not always appreciative of the importance that the UK places on environmental matters and that while schemes may be devised to deal with a certain problem (for example to reduce the production of cereals in the European Union) it can impact beneficially in other areas that in themselves are worthy of maintaining;

    4.9.2  Secondly the timing of the announcement last year came at a time of the season where plantings had already been made and areas of set-aside had been chosen. In effect even if producers had wished to reduce the width of their field boundaries they would not have been able to do so at that stage of the season.

  4.10  It is essential that the announcement of changes to field boundary rules, or any other ruling that may have an impact on a farmers planting or set-aside decisions, are made as soon as possible to ensure that producers have enough time to adjust to the new rulings without minimal impact on their planning.


  5.1  It is very common for livestock producers to claim under a number if not all of these support schemes. The ability of livestock producers to change their business structure is extremely limited by the varying application and retention period dates and the link of all these schemes to the IACS which is governed by an annual area aid application on the 15 May each year. Annually a number of producers experience a loss of some or all of their premium because they have changed their business structure at the wrong time of the year.

  5.2  At the current time it is extremely difficult for producers to find a date to make changes to their business structure which does not affect one or more of the livestock support schemes. Producers find that making changes to their business structure which suit one scheme gets them in to trouble with the rules of another scheme.


  6.1  The NFU fully understands and supports the reasons behind the eligibility requirements attached to land for the purposes of claiming Arable Area Payments. However, as we move further from the cut off date for eligibility of 31 December 1991, so it becomes more difficult for producers to prove the eligibility status of land that has come into their ownership since that date. Given that the question of eligibility is a key one in any decision to purchase or lease land, we believe producer should be able to receive information from MAFF, where they have it, on the eligibility of any parcel that they are buying and/or leasing.


  7.1  We are also concerned at the implications where crops are brought into the AAPS without a corresponding increase in base areas. The inclusion of the flax and hemp regimes into AAPS was a case in point. The base area was increased by an area equivalent to the plantings in the base period 1989-91 which did not reflect the current levels of plantings. We would urge that where new crops are brought into the AAPS in future years then the base area should be increased by an area equivalent to the average of the plantings in the three years previous to the year in which the crop was brought into the AAPS.


  8.1  In general, our members are highly complimentary of MAFF staff in the regions and find them friendly and helpful. Indeed, the recent proposals issued by MAFF to reorganise the Regional Service Centres and reduce the availability of face to face contact with local MAFF officials was met with some concern by our members.

  8.2  We have welcomed the efforts made by MAFF to try and ensure that the advice given by the RSCs when the talk to farmers is consistent. The "lead region" system was an attempt to create centres of excellence specialising in various parts of the IACS system and the schemes that it controls. However, this has not always made it easy for use to determine where it is best to direct enquiries and it has not fully eliminated discrepancies in advice given.

November 2000

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