Select Committee on Agriculture Seventh Report


63. The crucial difference in how IACS is implemented throughout the EU is the relationship between the national authority and the farming industry. We have found no evidence of anti-competitive administrative differences, and indeed plenty of common ground on the need for simplification. What we have found is evidence of strong cultural differences. These manifest themselves in various ways: the French forms are highly bureaucratic but the administrative structure gives farmers ready access to help in completing and understanding them, whilst in Ireland all efforts have been made to minimise the paperwork. However, in both cases, farmers and officials alike accept that there is little room for flexibility in the rules themselves but find scope to make the burden more bearable through attention to the details of service delivery, such as timing of payments, handling of errors or on-going discussions on how to suit the system to the farmers, rather than the other way around. We do not believe that other countries are "cheating"; nor do we believe that MAFF is uniquely stringent in implementing the rules. Nevertheless, we strongly argue that there is a need for a cultural shift which would put the farmers in the place of priority customers within the delivery of IACS payments.

64. We recognise that MAFF has three distinct roles with regard to the implementation of IACS. First, it has a policy role, trying to engineer reform of the CAP. This involves both fundamental reform, as repeatedly supported by this Committee, and simplification of the existing schemes and procedures as we have advocated in this report. The emphasis on change underlines the need to ensure that any IACS mechanisms, including CAPPA, are flexible enough to cope with possibly radical changes to IACS-based support regimes in the future. The second role is that of financial control, protecting taxpayers' funds from fraud and inefficiency. The evidence of the disallowance figures suggests that MAFF is effective in this respect. However, it appears that too strong a focus on this aspect has led to a serious underplaying of the importance of the third role, which is to ensure that farmers receive the payments to which they are entitled. We believe that MAFF must recognise that its legitimate responsibilities include protecting the interests of farmers and assisting them to make claims for CAP subsidies. Overall, we conclude that MAFF is not guilty of over-implementation of the IACS system and is performing well in the sense that the administration of CAP funds is broadly efficient within the European Commission rules. However, it could do better and we invite the Government to accept our recommendations to assist it to do so.

65. Our other principal conclusions and recommendations are as follows:

Division of responsibilities

1.  Provisions included in EC legislation are directly applicable in Member States and are not open to interpretation (paragraph 8).

MAFF and farmers

2.  We commend the co-operative working arrangement found in France and Ireland both to MAFF and to representatives of farmers in the UK (paragraph 12).

Knowledge of national practices in other Member States

3.  We conclude that there is little intentional obfuscation of national practices but we agree with the NFU that the complexity of systems devised initially in Brussels but operated within Member States, particularly where there are federal constitutional arrangements, makes it difficult to gain a comprehensive picture of the realities of implementation. Where suspicions already exist, this can only exacerbate them. We also note that MAFF officials have had no brief to analyse systematically all alternative models. They should do that on a regular basis (paragraph 15).

Increasing understanding and best practice

4.  We recommend that the UK Government, through the Council of Ministers, press the Commission for the publication of regular, up to date reports on the implementation of IACS in individual Member States. We further recommend that the Commission be required to highlight instances of best practice in such reports and to encourage the adoption of such practices throughout the Union, while realising that the central administrative role is a national matter (paragraph 17).

Simplification of new EC agricultural legislation

5.  We welcome the European Commission's initiative to make new agricultural legislation as simple as possible from the outset and look forward to receiving reports on its progress (paragraph 20).

Business-based inspections

6.  While it is easier to combine inspections of livestock schemes, we believe that the business-based inspection system should also extend to all other schemes under IACS, including arable schemes (paragraph 22).

Small farmers' scheme

7.  We recommend that MAFF support the pilot small farmers' scheme and actively consider amendments which would make the scheme more appropriate to the UK, with a percentage target (say, 10 per cent) for the number of farmers meeting the criteria. We also recommend that consideration be given to introducing a euro limit which could vary for each Member State in relation to average subsidies (paragraph 24).

The penalty regime

8.  We recommend that the UK Government continue to push for improvements to the penalty regime which make a sanction proportionate to the offence (paragraph 27).

Environmental schemes

9.  We recommend that MAFF press the Commission for clarification on how environmental measures are to be dealt with within the IACS system and ensure that environmental objectives are not undermined by IACS rules (paragraph 28).

MAFF and the Commission

10.  We welcome the Government's commitments on influencing European policy made in response to the Haskins report and we expect these principles to be applied to the details of implementation as well as to the formulation of new regulations (paragraph 30).

Application forms and scheme literature in the UK

11.  We recommend that MAFF ensure that the IACS scheme literature and supporting advice system be reviewed in time to implement the 2002 scheme guidance notes, regardless of the development of CAPPA (paragraph 34).

12.  We recommend that MAFF use the data gathered at the time of the submission of IACS forms to assess the real cost to farmers of the paperwork involved (paragraph 35).

13.  The current error rate on application forms is unacceptable and must be reduced. As a first step, we recommend that MAFF conduct detailed analysis of not only what errors are commonly made but how and why they are made in order that the results may inform the future design of claims forms (paragraph 36).

14.  We recommend that MAFF conduct a full analysis of the Irish forms with a view to reducing UK IACS forms along similar lines (paragraph 38).

Electronic forms

15.  We recommend that MAFF develop plans to address the concerns expressed by the IACS and Inspections Working Group as to assisting the understanding of e-forms by the industry and ensuring that Government does not lose sight of the needs of those businesses which cannot embrace e-business (paragraph 40).

A paperless system

16.  We recommend that MAFF support moves towards a paperless system of claims for support payments (paragraph 41).

Consultation on scheme literature

17.  We recommend that MAFF establish a permanent external panel on the simplification of IACS forms and guidance and related matters, along similar lines to Scotland (paragraph 42).

Harmonisation of scheme requirements

18.  Given its name, the degree of integration between the administration and control of the different schemes within IACS is far too low and we recommend that MAFF move towards a fully integrated system, either at its own discretion or through initiating changes at European Union level as necessary (paragraph 45).

Information technology

19.  It is clear, from the reaction to GIS and to e-forms, that the industry is willing to embrace change and to make it work - if farmers can be persuaded that it is practical and desirable and has some direct benefit to them. Above all, it is vital that any new systems are designed so as to reduce the bureaucratic burden on farmers and administrators and to make the process less complicated, rather than more so. This means that there should be a preference within MAFF for reducing the number of forms which a farmer has to complete, regardless of whether they are on paper or on line. Moreover, the technology has to work. IACS payments are too important to farmers to risk any mistakes or delay in their delivery. We expect MAFF, in implementing GIS and new computer systems, to show that it has learnt the lessons from failed Government IT projects of the past and has also taken steps to benefit from the experience of those parts of UK Government like the Inland Revenue which have had IT success as well as from other Member States which have already established similar systems (paragraph 47).


20.  We will continue to monitor progress on CAPPA and strongly recommend that if at any stage significant problems are identified, MAFF Ministers delay the CAPPA project rather than compromise the high standards required (paragraph 51).


21.  We support the establishment of an independent appeals mechanism in England in accordance with the industry's wishes and look forward to examining details of the outcome of the consultation (paragraph 55).

Administrative culture

22.  First, MAFF could demonstrate more clearly its recognition of the burdens imposed on farmers by the IACS system and ensure that the impact on the industry of new or amended regulations is fully taken into account during negotiations and implementation. We welcome the progress made in this area with the ongoing simplification process but the difficulty caused by the inadequate notification of changes to the two metre rule shows that such considerations are not firmly embedded in MAFF's current thinking. Second, MAFF should recognise the importance of IACS payments to farmers and aim to pay all but contested claims on the very first day of the payment window. MAFF's current plans to meet this target are reliant on the industry moving to electronic forms. We believe that MAFF should be able to do this even with paper submissions, by planning backwards from that target date. Third and perhaps most importantly in terms of proof of change in attitude, MAFF should recognise that it is too restrictive in its definition of the advice function of its staff (paragraph 57).

23.  We recommend that MAFF establish plans, within the new arrangements for IACS administration, to be more proactive in its assistance to farmers, always keeping the right side of the European Commission rules on control (paragraph 57).

MAFF's performance

24.  No explanation was given as to why three per cent had been chosen as a target reduction for MAFF's efficiency indicators relating to CAP administration; some effort should be made to justify this figure (paragraph 59).

25.  We recommend that MAFF undertake a benchmarking exercise between the four paying agencies in the UK which operate similar systems (paragraph 60).

26.  We recommend that MAFF examine the possibility of developing an agreed protocol with farmers' representatives in England on improvements in the quality of service, its delivery and the information provided by MAFF and its agencies to farmers, with the emphasis on those matters which are most important to farmers (paragraph 61).

Role of farmers

27.  We cannot make recommendations aimed at private sector organisations but we hope that farmers' representatives will give positive support to any attempts by MAFF to simplify the system and to change the culture of administration (paragraph 62).

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