MercoPress. South Atlantic News Agency

Britain's farmers rack up debt

Britain's farmers are used to receiving bad news and so it was a familiar feeling when the Bank of England announced last week that farming debt has reached a new record high of just over 9 billion pounds.

But the industry so often on its knees has good reason to feel aggrieved at this latest sorry story.

Since the beginning of 2005 farmers across the European Union have been adjusting to the reformed Common Agriculture Policy. One distinct purpose of reform has been to stop paying farmers subsidies to produce food but instead to award a Single Farm Payment (SFP) once a year on adherence to a string of environmental rules and general good farming practice.

However, nearly 70,000 farmers in the UK are still waiting for their 2005 farm payment and have been forced in the meantime to borrow money to stay afloat in an already volatile industry. Total farm debt has increased accordingly by more than 9 percent from a year ago with farmers now facing 25 million pound interest repayments on their borrowing. A spokesman from Lloyds TSB said that the debt was "due in no small part to the delayed Single Farm Payment".

The Rural Payments Agency (RPA) is responsible for sending out SFP cheques to farmers but their brand new computer system failed at the first hurdle.

Environment and Rural Affairs Committee Chairman, Michael Jack said, "The result of these failings is extra cost and more worry to farmers and a bill to taxpayers of an extra 18 million pounds".

The RPA computer system cost the taxpayer 37 million pounds to install, double the original estimates, and it doesn't even work.

Conservative Agriculture Spokesman in the European Parliament, Neil Parish MEP, was also scathing of the government system. Speaking from Brussels, he said, "How on earth can our farmers be expected to be economically viable if they are not going to be paid on time?". Mr. Parish has written a formal letter to the European Agriculture Commissioner, Mariann Fischer Boel, asking her to extend the payment deadline in the UK so that taxpayers will not pick up the EU 'late' fine in the light of government incompetence.

The outgoing Secretary of State for Agriculture Margaret Beckett said that the delays had caused a "human crisis", while her successor, David Miliband said that he acknowledges the "magnitude of the challenge that still lies ahead".

David Miliband announced last Tuesday that he hoped that 85 percent of 1.5 billion pounds owed would be paid out by the end of this week but farmers are not holding their breath.

By William Surman Buenos Aires Herald