Memorandum submitted by Dr J Jones,
Head of Farm Management at the Royal Agricultural
College, Cirencester (RPA 11)
Background
1. I have been closely involved with the process
of reform of the Common Agricultural Policy (CAP) both as a researcher
and as a stakeholder representative of the Royal Institution of
Chartered Surveyors (RICS). It was in the latter role that I gave
written and oral evidence to the EFRA Committee inquiry into CAP
reform implementation in 2003/4. My involvement has largely been
at a policy level rather than with detailed implementation and
has thus mostly been with DEFRA rather than the RPA. Although
the type of activity I have been involved with has gone as far
as the planning for implementation and even the scheme documentation.
In particular I have been particularly involved with cross compliance
and attended the workshops arranged by DEFRA and IEEP to refine
the cross compliance requirements and documentation.
2. I attended most of the stakeholder meetings
with DEFRA chaired by David Hunter which took place between 2002
and 2004. The last of these meetings took place in the spring
of 2005. Latterly stakeholder engagement has been with the RPA
and meetings have taken place at their offices in Reading rather
than in Nobel House, Westminster. I attended the first of these
meetings on the 9th September 2005. But RICS representation
since then has been by a staff member, Mr Peter Fane and (since
Mr Fane's departure from the RICS in October) by an RICS member
from Northumberland, Mr Louis Fell. I have not been directly connected
with the mechanics of the implementation of the Single Payment
Scheme (SPS). However I attended the DEFRA/RPA roadshow presentation
to farmers and professionals at the De Vere Hotel, Swindon in
January 2005. I sit on the RAC Farms Board and have many points
of contact with those in the farming and the surveying profession
that have been directly involved in applying to enter the SPS.
3. I have canvassed for feedback from various
contacts including members of the RICS Countryside Policy Panel.
I am very grateful to the Earl of Lytton for providing me with
a detailed account of his own experiences of the SPS introduction
and the service provided by the RPA. I have included this as an
annex to my evidence as an illustration of the deep frustration
that in his case led to deciding not to enter his two farms into
the Scheme. This is exceptional but I know that there are also
aware of very strong feelings by a large number of RICS members
who have been involved in the process. It is for that reason that
I have suggested to the RICS that they make their own separate
evidence to the Committee as I am not really in a position to
base my own evidence on enough first hand experience.
4. The questions on which the Committee seek
evidence
These were given to me as:
a) why the RPA is unable to make payments under
the Single Payment Scheme at the start of the payment window in
December;
b) the issues involved in making an interim payment
to farmers, in advance of the new February target;
c) what impact the RPA's own Change Programme
has had in the introduction of the new CAP payments and the agri-environment
schemes; and
d) the extent to which the RPA's IT systems have
failed to evolve to deliver what is required of them.
5. I propose to answer these by giving an over
view as I see it of the circumstances. Others will be better placed
to comment on specific logistical and delivery issues.
6. Problems created by the policy formation and
implementation process
The policy formation process has been exceptionally
complex. The reasons for this in brief are:
- The unusual amount of discretion provided by
the June 2003 Luxembourg agreement to Member States in how they
wish to apply the SPS.
- The UK decision to regionalise providing further
scope for separate rules and subsidy allocation in England, Scotland,
Wales and Northern Ireland.
- The delays and difficulty the Commission experienced
in providing the full legal text and implementing regulations
within which the Member States could exercise their discretion.
- The novelty of the concept.
The unusual nature, contradictions and complications
of the Single Payment (SP) as a form of subsidy
7. The SP is decoupled from production but nevertheless
occupation of 'agricultural' land is the basis of claim. The subsidy
itself is not linked to any specific land parcels (as with Arable
Area Aid Payment registration). But land occupation in 2005 is
the basis of establishment of entitlement. Previous Pillar 1 agricultural
subsidies had links with production. Even most of the Pillar 2
subsidies have specific links with some kind of production - business
diversification, reduced intensity farming for environmental benefit,
food processing and marketing etc. So having a subsidy with no
production link at all seems very odd both to government officials
and recipients.
8. The SPS has land use and other conditions
most of which are an indirect consequence of production (although
some have no link with production at all). This has been highly
confusing conceptually even at the highest levels of those responsible
for creating the scheme rules at EU, Member State and regional
level.
9. Most of the difficulties experienced in implementing
the SPS stem back to internal contradictions that arise because:
a) Entitlement is based on past occupation of
specific parcels of agricultural land but is then not linked to
that land.
b) Payment is related to occupation of 'agricultural
land' but does not require agricultural production.
c) Most of the cross compliance and other conditions
relate to production but the SP is not a production-based subsidy.
The nature of the basis of payment for the SPS in
England and why it is has created extra difficulties
10. The choice of a transitional hybrid as the
basis of payment made the establishment of appropriate levels
of payment about as complex as it could conceivably have been.
11. A system based purely on 'historic' subsidy
receipts has the complexities of force majeure claims (special
cases of those disadvantaged by the choice of reference period)
as well as both voluntary and compulsory categories of national
reserve claims. But by focusing payments on just those who have
been in the system in the past it avoids the complexities of spreading
payments to all occupiers of land defined as 'agricultural'. This
contains the numbers as well as sticking to those on whom there
are some established records. There are still plenty of complications
because not all of the past subsidy schemes were based on defined
areas of land but simply on head of stock. In the case of dairy
based subsidy it gets even more complicated because it relates
to milk quota either leased or owned on 31st March
2004 and not to either cows or land.
12. A system based on spreading payment out and
allocating the total funds available on an area basis has some
advantage over the 'historic' system in that it avoids the complications
of going back into past subsidy claims. But it has the disadvantage
of potentially bringing in every occupier of more than 0.3 hectares
of 'agricultural' land. This is made particularly difficult if
a broad definition of what is 'agricultural' is adopted i.e. by
including land not in production or receiving any kind of agricultural
support payments. In England the definition used has included
land used for grazing horses for instance which is not 'agriculture'
- at least in terms of various other forms of legislation. So
there are vastly more potential applicants in total and many have
been previously outside the subsidy system. It would seem that
the numbers are roughly double what they would have been under
a pure 'historic' system and there are naturally plenty of oddities.
It is inevitable when the definition of what qualifies is rather
open to interpretation that land occupiers may 'try it on' to
see if their park, polo ground, nature reserve, firing range or
what ever can qualify. Especially as there was only one opportunity
for all time to latch on to the subsidy. But spreading the subsidy
net in this way is bound to bring in a lot of difficult and unusual
cases. This makes the job of validating claims much harder.
13. The regional average basis also brings with
it some additional technical complications that are not shared
by a history-based system. It would be difficult to explain all
of these. But I can offer two examples:
a The set aside requirement, which can simply
be attached to the amount of AAAP based subsidy under the historic
system, has to spread out across all land that could be in arable.
In the English lowland this reduces the rate from 10% to 8% and
applies it more widely on land where no set aside has been used
in the past. However because the subsidy is not linked to any
specific parcels of land a rule has to be created about identifying
a separate category of 'set aside' entitlement. The set aside
rate under the history system is fixed. But under the regional
average system rates cannot be established until it is known how
much land has been entered and of what type. This has only become
more complicated because there are three separate sub-regions
each one of which has its own set aside entitlement rate.
b Common land creates difficulties under both
systems but this becomes greater and more contentious when the
land acquires a value for subsidy purposes even though those who
are entitled to occupy it have no stock on the common. Under the
historic system only commoners who have had stock on the land
in the past will be in consideration. Under the regional average
system all those who have rights to graze the common generally
have a right to apply for the subsidy.
14. A transitional hybrid that starts with a
strong emphasis on 'historic' and moves during a period to the
Regional Average Area Payment (RAAP) basis suffers the difficulties
of both systems in its establishment. But without having any of
the advantages of each system operating independently of either
restricting it to past claimants only or being able to ignore
payments 'history'. However even this level of complication has
been added to by basing the RAAP element on three separate areas.
The third area of which was a sub-division of what the government
originally proposed as just one area having been split only after
lobbying from the industry.
Added complications due to the concurrent roll
out of Entry Level Environmental Stewardship (ELS)
15. The roll out of the ELS targeted at 70% of
farmers has certainly added to the demands for maps and on the
RPA for data. Given the complexities of the SPS it might have
been better, with the benefit of hindsight, to have delayed the
process. But the introduction of SPS alters farm economics pretty
fundamentally making it advisable to close existing schemes. So
there was an argument for making the changes simultaneously in
order not to have to go through an interim phase with existing
schemes or to arrest the process of increasing agri-environment
participation as envisaged in the England Rural Development Plan
(ERDP).
16. What are the implications of the circumstances
under which the SPS has been introduced for the RPA as the administering
authority?
a) A much higher volume of applications as a
result of moving to the RAAP.
b) A much larger number of cross-border issues
as a result of adopting the three-region model in England and
choosing a different system to that adopted in Wales and Scotland.
c) A large number of new applicants not already
on the system requiring additional set up and vetting.
d) More applicants who are outside of mainstream
agriculture as a result of adopting the RAAP and a loose definition
of what qualifies as 'agricultural'.
e) Both EU and DEFRA were behind schedule in
providing regulations, definitions and categorisation.
f) A greater tendency to have to deal with unusual,
spurious or marginal claims compared with a pure historic system
that only deals with those who have claimed agricultural subsidies
or owned milk quota in the past.
g) The amount of the RAAP and the required rate
of set aside cannot be determined until all claims to entitlement
are lodged and validated.
h) Confusion for farmers and advisors as a result
of the novelty and complexity of the concept and the scheme rules
plus late changes or clarifications. This in turn has created
more errors, queries, duplications and other such problems.
i) The time scale has been compressed by the
nature of the process at EU, UK and regional level. But also by
the delay over choosing what system to go for in England then
opting for almost the most complex model conceivable and later
altering the sub-regional structure of this.
j) The demand for maps and data was increased
by the roll out of ELS and made worse by the initial approach
of setting quarterly deadlines for submission (later relaxed to
monthly to smooth out the workload and lessen the urgency).
k) New audit requirements requiring co-ordination
with more bodies than was the case under the old production-based
schemes. So for example breaches of the cross compliance condition
GAEC 8 on rights of way is through Local Authorities. These are
not only more numerous than dealing with the centralised operations
of DEFRA or the Environment Agency but it is an arm of government
that the RPA has not had to deal with before.
Could the RPA have performed better?
17. The RPA have come in for a great deal of
criticism from farmers, landowners and their professional advisers
and representatives. I don't think I know of a single farmer that
has not provided me with several examples of frustration over
agreeing the forms, the information that should be on them, receiving
maps and forms on time, etc. So it would certainly appear that
the task could have been performed much better to achieve a more
acceptable level of customer satisfaction.
18. I do however feel considerable sympathy for
the RPA because of the circumstances I have outlined. They were
given an immensely difficult task. Clearly bringing in external
resources and additional casual labour has been necessary to keep
the task anything like on schedule. But this in itself must have
created problems. There is no doubt that their work would have
been more likely to run smoothly had the government taken decisions
earlier and opted for a more straight forward system. I also feel
given the extra resources that have been required to smooth out
the problems later on that much more resources should have gone
in at an early stage in getting clarity from Brussels and the
regions as to how to proceed. Having dealt quite closely with
the process through the stakeholder groups I am rather horrified
at just how much reliance has been placed on certain individuals
to do this work. It may be part of the reason for the need to
send out additional documents and revised rulings. This has made
the applicants confused and annoyed with the RPA as the organisation
at the sharp end of the application process. It has also made
it harder for the RPA to train their staff, create the forms,
do audit work, etc. in a timely fashion.
19. The specific questions to which the Committee
seeks answers relate mostly to making interim payments and to
delays. It may seem as though I have gone a long way about providing
an answer to these. But I think it relates to the whole background.
It is not hard to see why there might be performance issues once
the nature of the task is appreciated more fully.
20. Frankly I can't really see why an interim
payment cannot be made to those with undisputed historic entitlement
not subject to appeal. Other than the fact that it would create
another layer of complication in what is already a complex picture
for an organisation struggling to deliver what is required of
it.
21. But the bigger question is not so much whether
an interim payment could be made but whether the final payment
can be made by the end of March. If this deadline is not met it
means that transfers of SPS entitlement, which are a significant
issue for most tenancies and sales involving agricultural land,
will be held up badly and possibly for another whole year. This
is because entitlement cannot be traded until 'activated' by receiving
the first payment. Once this has been received the RPA requires
six weeks notice for a transfer. Therefore any application that
comes in less than six weeks before 15th May will not
be transferred in time to allow the new holder to apply before
the IACS submission deadline. In order to make the final payments
the RPA must have processed all (or nearly all) the claims because
until this takes place the amount of the payment cannot be established.
So it is really vital that the processing is complete by the middle
to end of March. That has to be the RPA's priority and failure
to meet that deadline will create even bigger problems.
Dr J Jones,
Head of Farm Management at the Royal Agricultural
College, Cirencester
January 2006
APPENDIX
MEMORANDUM OF PERSONAL EXPERIENCES OF THE RPA
IMPLEMENTATION OF THE SINGLE PAYMENT SCHEME
by
John Peter Michael Scawen, Earl of Lytton BSc
FRICS
22. My experiences are related to two holdings
No.36/110/0054 in West Somerset District and another 42/083/0152
in Horsham District, West Sussex. The former is described hereafter
as the Somerset property and the latter, the Sussex property.
23. The Somerset property is an upland (SLFA)
livestock farm and shooting estate totalling some 360Ha and has
been the subject of an IACS return for as long as that system
has been going. I have always completed the IACS return myself
and therefore have become familiar with the system. Over the years
we had simplified a number of the parcel areas for purposes of
the IACS return because the precise positions of land use for
forage crops and game cover crops would vary year on year whilst
the total forage area would vary less dramatically. In order to
simplify matters, parcels were often quite large blocks of land
so that the precise subdivision within the block for forage, grassland
and non-palatable game cover crops (these latter were always excluded
from the claim area) could be dealt with whilst avoiding the need
for re-measuring and agreeing annually year on year changes in
the disposition of land uses. We had even got as far as having
a visit from the Surveyor from the Rural Payments Agency in Exeter
who met with me on site (spring 2003 as I recall) to check the
acreages included in the claim and which were found to be within
normal allowable limits. Beyond confirming those acreages, no
other action by the RPA had ensued.
24. The Sussex property which is a lowland grassland
and woodland holding, was never for or included in an IACS claim.
As the grassland was of value as much for its amenity as for its
grazing and totalled some 17Ha, this was of no great consequence.
25. My first encounter with the new Single Payments
Scheme was in respect of the Somerset property and in particular
the supply by RPA of new digital maps of the holding as part of
the Rural Data Capture exercise leading up to the compilation
of the Rural Land Register. The first two sets of maps supplied
during the latter part of 2004, were substantially incorrect.
Some of the parcel boundary lines seemed to follow sheep tracks
and there were material inaccuracies. I replied, sending a map
of my own but the new system appeared to have no regard to the
way in which the land had previously been mapped by Ordnance Survey,
to the facts on the ground or to the maps submitted from time
to time in support of IACS claims. It appeared that all the systems
built up over many years of IACS would count for nothing. Eventually
I received a set of plans that was more or less correct except
that it omitted one or more significant parcels in the middle
of the holding and when I made representations about this, I was
told to fill in an IACS 22 form for the allocation of a field
number for the missing area, notwithstanding the missing land
was already IACS registered. Eventually I did receive a substantially
correct set (but see below for the sequel).
26. With regard to the Sussex property, I applied
on form IACS 22, for the issue of new parcel numbers for a previously
unregistered holding. When I had heard nothing by the early part
of 2005, I made an enquiry and was sent without any other comment,
a further form IACS 22. Rather than complete a new form, I photocopied
the old one and sent it back complete with its accompanying maps.
27. I took the view however that with the growing
rumours about the disarray at the RPA, such maps as I had received
on the Somerset property were probably going to be as good as
it would get. I was CLA Sussex Committee Chairman at the time
and was therefore following fairly closely the efforts by the
CLA to obtain additional information on behalf of members. submitted.
28. All the while, I was receiving a plethora
of documents relating to the implementation of the Single Payments
Scheme and advice on what farmers had to do. Some of these were
re-issued with further amendments after a gap of only a few weeks
and it all became very confusing. From the standpoint of the Somerset
property which is also run as a sporting estate, I became increasingly
concerned about the status of game cover crops and what was or
was not qualifying land when used for this purpose. Although I
had all the records going back for a long time under IACS but
it was quite difficult to make the connection between the parcels
shown under the RPA's new digital maps and the divisions of the
farm used for the purposes of the previous IACS claims. In a number
of significant areas, the two simply didn't match. At one stage
I tried to see if someone would meet with me to discuss the ongoing
errors being generated in the RLR mapping exercise but was told
that the consultants did not come to site.
29. In the weeks immediately preceding the May
16th 2005 deadline, I contacted the help-line (Newcastle
on Tyne) in order to try and get clarification about the treatment
of cover crops and whether this would trigger a requirement for
set-aside. I freely admit that I had not anticipated that there
would be a requirement to meet a set-aside requirement on a hill
farm used for extensive livestock raising with game cover crops
having a dual use as fodder crops for winter feed. Suffice to
say that the help-line was unable to clarify the position and
the gentleman I spoke to did not know what a game cover crop was;
he thought it might be a catch crop. My follow up email confirming
the query was not answered. Certainly it would have been very
difficult to have found land on which to provide set aside, even
given the small amount of set aside land that would actually have
been needed. Indeed, the set aside arrangements would have had
to have been put in place some months earlier, well before I had
come to the realisation that there was a set aside issue at all.
30. During the early part of May 2005 I received
a round-robin letter from the Chief Executive of the Rural Payments
Agency effectively saying that all the information had been provided
by the RPA and that it was up to farmers and land managers to
make use of all the information provided. As this was manifestly
untrue, I wrote to say that inadequate information had been available
and that I was still waiting for information which had so far
not been provided. This produced a telephone call from somebody
in the Chief Executive's office which happened when I was out;
I returned the call and left a voicemail message but did not thereafter
receive any further communication.
31. I concluded that there was too little information
available and too much uncertainty about the whole system and
in the event, did not submit a Single Payment Scheme application
form in respect of either property. This decision was not taken
lightly; there were probably £12-15,000 of historically-based
payments at stake for the 2005 year alone.
32. In August 2005, a further set of maps in
connection with the Somerset property was sent to me. These were
fundamentally wrong and incorporated errors not seen in previous
versions of the maps (in fact each successive set of maps had
errors that were not in the previous set and this was a recurring
theme). I wrote in response to this latest set of maps in early
September to say that they were wrong, that I was not prepared
to devote any more time and energy to the matter and that as far
as I was concerned, correspondence with the RPA over this matter
would cease with immediate effect.
33. I have just received (today, the 8th
December 2005) for the first time, some maps of the Sussex property.
They are substantially incorrect and miss out large parts of the
gazing land. They are not in accordance with the details or plans
previously provided. I am in the process of writing a letter pointing
out the delays and inefficiencies and that the entire SPS is,
so far as I can ascertain, a waste of time.
34. That is where matters now rest.
35. My opinion is that the whole exercise has
been incompetently organised; there were too many things going
on at one time with the digitisation of the OS maps, the creation
of the Rural Land Register, the mismatch between the body of established
mapping data from the IACS system and the new RLR requirements.
Coupled with a new SPS regime administered by inadequately trained
staff (whether in the consultancy office or the RPA itself, I
do not know) and an inability to answer queries, the process became
a nightmare. A guidance video issued by DEFRA in about April 2005
made no attempt to demystify the whole process. The published
and printed guidance made no attempt to identify changes from
earlier versions and in the end it seemed one had to cross refer
to several different documents at once to get a cohesive picture
of the requirements and even then there were inconsistencies and
a great lack of clarity.
36. Clearly DEFRA was in overall control of this
exercise and seems to have chosen the most complicated and Byzantine
approach possible. On a simple holding this should have been straightforward
but was not. On a complex holding it has proved impossible to
find a way through. I resorted to asking my neighbouring farmers
for advice and the CLA were inundated with enquiries from members.
All this occurred despite my many years of experience with IACS
and a professional knowledge of mapping procedures.
John Lytton 8th December 2005
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