The Rural Payments Agency (RPA) is now struggling to meet the formal June 30 deadline for delivering Basic Payments in England and could face EU fines as a result, according to NFU vice president Guy Smith.
The agency needs to deliver just over 95 per cent of the expected BPS fund by the end of June to avoid possible EU financial penalties for late payments and to be guaranteed reimbursement from the EU for money spent from the UK exchequer.
The latest published figures showed £1.29bn had been paid out of the projected £1.43bn English BPS fund, about 90 per cent.
A total of 79,505 2015 BPS claims have now been completed, representing 91 per cent of the total claimant population.
This leaves about £140 million still to be delivered and the agency needs to pay about half that to meet its June 30 target.
The NFU estimates just under half of the money still owed will be top ups to the 7,800 bridging payments delivered to farmers at the end of April.
But it believes about £76 million is ‘currently unaccounted for’, including thousands of underpayments of both full and bridging payments.
Progress with bridging payment top ups has been slower than anticipated during May, Mr Smith said.
With the RPA having ‘failed to deliver on virtually every promise it has made since March’, the NFU is concerned the problems with its payment systems are deeper than are being made public, said Mr Smith who is still waiting for his full payment.
“The only thing we can get out of them is it’s proving more complicated than we thought and we have been hearing that since March,” he said, warning there could be knock-on effects for 2016 if the problems are not resolved soon.
“Now we are staring at June 30. (RPA chief executive) Mark Grimshaw told us two weeks ago the tops ups would be hard on the heels of bridging payments but not many have been made.
“We are now nearly in June and there are about 6,000 still to pay – never in our wildest dreams did we think we would still be waiting now. There must be a chance they are not going to hit that absolute June 30 EU target.”
Defra was hit by EU fines back in 2006 for missing the June 30 deadline for the trouble 2005 Single Payment Scheme.
The NFU is calling for interest to be paid on any payments issued after June 30 but the indications from Defra so far are that it would be reluctant to do so.
An RPA spokesperson said the agency was confident of meeting the June 30 target. "We are working towards meeting the target for England," she said.
Asked about paying interest on late payments, the spokesman said 99 per cent of farmers had received a 2015 payment. "Right now we remain fully focused on making the remaining payments," she said.
With about £140m still to be paid out NFU senior BPS adviser Richard Wordsworth has summarised the outstanding payment categories.
The following will be reasonably well defined in terms of value outstanding, but the figures are not known.
What is less certain is the following category.
The NFU estimates top ups to bridging payments will be worth about £64m, leaving £76m 'unaccounted for', including reductions, penalties and underpaid bridging and full payments.
Mr Wordsworth said: "Farmers have had either all or some of their monies.
"Those waiting for money have in some situations been waiting for some time for additional monies, for example they had a wrong full payment in December or January or recently had a bridging payment and are waiting for more money.
"There is a promise to deal with full payment ‘differences’ in the ‘summer’, and little news at present on how many bridging payment top ups have been issued and the only promise is that they should arrive by the end of June.
"But will they?
"In the meantime NFU calling for interest to be paid (at a commercial rate) on any monies issued after the June 30. The word ‘drifting’ is very apt for where things are heading."
Over 80 per cent of 2016 BPS applications were made online using the Rural Payments service, a record level.
With more than 85,500 submitted in total by the deadline, RPA is urging anyone still planning to claim, to do as soon as possible and before midnight on June 10, the final deadline.
Farmers who may have an outstanding query, or are waiting for the balance of their 2015 payment can apply and should do so as soon as they can using the latest information they have available.
Claims submitted during the penalty period after the 16 May deadline will incur a 1 per cent penalty for each working day they are late.
Applicants can still make certain amendments until midnight on 31 May without being penalised and RPA has produced a new video available on its YouTube channel, to help them.
Some changes can still be made after this date and up to 10 June but may be liable to a penalty.
RPA chief executive of the RPA Mark Grimshaw said: “It is great news that the 2016 BPS has received the highest proportion of claims submitted online in any one year. We expect BPS 2016 to be easier for farmers and it has already got off to a good start.
“I urge anyone still considering making a claim to go online and do it as quickly as possible so you don’t miss out.”