Coronavirus hamstrings the U.K.’s already stretched farm payments system

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The payments landscape for U.K. farmers has long been fraught with inefficiencies at the best of times, particularly when it comes to the government’s processing of financial support payments. Now, with coronavirus wreaking havoc with administrative departments, farmers across the land are bearing the brunt of the crisis.

According to data from the National Farmers’ Union, a sizable proportion of U.K. farmers have yet to receive their 2019 payments from agri-environment schemes, in which farmers receive grants for carrying out various environmental management activities on the land they own. For the Countryside Stewardship scheme alone, less than 50% of farmers had been paid by the start of April.

“There’s a payment window that allows the government to pay by the end of June, but that proportion is quite high for this point in time,” said Claire Robinson, countryside advisor for the National Farmers Union. “We are quite keen to see all those payments made as soon as possible, because all everybody’s finances are extra stretched at the moment.”

It is thought that one of the reasons for the delay is because the crisis has made it difficult for governing bodies such as the Rural Payments Agency to conduct their customary checks to ensure farmers have met the requirements for receiving these funds.

A farm worker sits on a cutting rig while harvesting asparagus from a field at a farm in Minster near Ramsgate, U.K., on Wednesday, April 15, 2020.

However, without this money, upland farmers — who are particularly dependent on agri-environment scheme payments for their income — are facing considerable challenges to keep their business financially viable.

“It puts a business under severe pressure from a cash flow perspective,” said Lancashire sheep farmer Thomas Binns, one of those waiting on payments. “You have a situation where some farmers have been paid, some haven’t, and they could be stood together in the same marketplace trying to buy similar stock. While the government usually pays, the problem is not knowing when that money is going to be received because they don’t communicate when they’re going to make the payment.”

In addition, social distancing and movement restrictions have created a conundrum surrounding applications for this year’s support payments. To receive money through agri-environment schemes or the Basic Payments Scheme (BPS) in 2020, farmers must apply by May 15. However, because of the technicalities involved, most rely on the assistance of specialist agents, who would typically visit their farm and help complete the application. But due to the current restrictions, this is unlikely.

“Quite a lot of farmers do need support in making that application,” said Robinson. “If you get it wrong it can make quite a substantial impact on a business. Mistakes can mean reduced payments, and if you don’t submit the form within the right timelines, you can end up not receiving any payment at all for the year. And for some farmers, 50-75% of their income comes from these schemes in any year.”

According to the NFU, there is a possibility that the application window will be delayed by four weeks, but no one knows what will transpire if social distancing restrictions still remain in place by mid-June. In addition, any delays to applications could also mean that the start of the government’s payment window will be pushed from Dec. 1, 2020, into 2021.

“If you delay the claim, you then delay the payments and it’s a right conundrum,” said Robinson. “Whatever happens, we need to get the money out to farmers on time, and we want those payments made on December 1.”

The coronavirus crisis has also impaired the U.K. government’s plan to phase out the current BPS and agri-environment schemes altogether —as these are European Union initiatives — and replace them with a new payments support system in the aftermath of Brexit known as the Environmental Land Management Scheme (ELMS).

The plan had been for ELMS to be slowly phased in from 2021 onwards. However, few details have been made public regarding the exact nature of the new scheme, and with so much uncertainty, farmers are calling for it to be delayed by a year.

“Farmers want to know what are you going to pay me to do, how are you going to monitor me, how much are you going to pay me, what’s my risk of participation, and what is it going to cost me to be involved?” said Robinson. “None of this information is available at this stage.”

However, for many farmers, the overriding concern right now is simply to receive the money they are owed for 2019 as soon as possible.

“Our worry is that as the civil service and government bodies come under pressure with people either isolating themselves or off work, that puts the processing of payments under pressure,” said Binns. “We’re concerned that this COVID-19 will be part of the excuse at some point as to why payments haven’t been processed. Whilst this is public money, and we understand it has to be accounted for, we hope they will at least make significant advance payments of the outstanding funds to make sure that farmers receive the bulk of it pretty quickly.”

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Coronavirus Agriculture industry Payment processing U.K.