Select Committee on Agriculture Seventh Report



A paperless system

41. As we have seen, increased use of information technology will soon allow a paperless system with no claim forms at all for cattle schemes. At this time, there is no opportunity for a paperless system for sheep as there is no requirement for individual identification and hence no database to support paying subsidies without claims by farmers. Arable payments present a different problem since self-evidently there is no corroborating data on cropping patterns from year to year in the same way as there is on animal births, deaths or movements. Arable farmers are therefore required to complete an IACS form every year on their current crops. However, simplification may be possible even here, helped by the change to a single rate of payment for cereals, oilseed and set aside, rather than the traditional variable payments for each different crop.[121] In this situation there are far fewer changes which need to be notified annually to the authorities in order to receive IACS-related subsidies. Some form of validation and control of claims will remain necessary to prevent fraud but there could come a time when all that is required from a farmer is a signature, and the long, complex IACS forms, electronic or paper, will be consigned to the past. This has to be the ultimate goal and we recommend that MAFF support moves towards this end.

Consultation on scheme literature

42. In simplifying forms and literature, it is vital that MAFF take the farmers along with them. It is easy for officials to concentrate on changes which facilitate control and administration but which have a negligible or negative impact on producers. MAFF consult every year on the annual revisions to scheme literature but the IACS and Inspections Working Group recommended that MAFF should "intensify ... consultation procedures and get more feedback".[122] It is perhaps particularly telling that the current arrangements elicit just "one or two suggestions, but generally not all that many".[123] Greater industry involvement would bind farmers more closely into the process and might encourage a more positive contribution. Scotland has established an external panel representing industry and other sectoral interests "to provide ongoing customer input into the content of guidance notes and claim forms" and to consider "a future communications strategy".[124] 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.

Harmonisation of scheme requirements

43. Each of the schemes within IACS has its own requirements in terms of application dates, retention periods, inspection processes and scheme literature, all of which have developed independently over time. This has led to an increased burden on farmers and officials, with duplicate requests for information and multiple inspections. In addition, there are particular problems for livestock producers who wish to alter their business structure in some way (for example, by selling or buying land or quota) in trying to identify a convenient date for doing so, which does not affect the IACS form itself (due in by 15 May every year) or the varying dates of the livestock schemes. The NFU argued that these complications annually led to "a number of producers [experiencing] a loss of some or all of their premium because they have changed their business structure at the wrong time of year".[125] We note that this may be a particular problem this year where farmers have lost all their livestock to foot and mouth disease. Taken together, these factors suggest that there would be considerable merit in harmonising the administration of the individual schemes under the IACS umbrella.

44. The IACS and Inspections Working Group put forward several recommendations aimed at increasing the common elements of the schemes and how they are administered. These covered reviewing scheme guidance notes to reflect areas of commonality and to adopt a common and familiar format (recommendation 2); sharing claim data submitted for different schemes and for the census (recommendations 6 and 8); working towards business-based inspections (recommendations 18 and 27); and aligning livestock scheme applications and retention periods more closely (recommendation 29).[126] Progress has been reported in all these areas, although in several cases real advances are only promised in the context of the plans for CAPPA (for example, recommendations 2 and 8).[127]

45. MAFF officials explained that the new IT system for CAPPA gave them "a chance to look overall at the sort of information that we capture, so that instead of having separate systems, we can have an integrated system right from the beginning to share the information."[128] The cattle tracing system has also contributed to this process.[129] The officials were strongly supportive of moves to use MAFF's new Combined Bovine Risk Analysis system (CoBRA) to move towards single inspections for cattle schemes, although less enthusiastic about whole farm inspections.[130] They pointed out that inspections for arable crops were carried out between June and September when the crops are in the ground, while livestock inspections tended to be in the winter.[131] We accept that there may be practical difficulties in fully harmonising all the requirements of the individual schemes but we believe that this process should be taken as far as possible in each of the areas identified by the IACS and Inspections Working Group. 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.

Information technology

46. As we have noted throughout our discussions on simplification, one of the main drivers for change has been developments in information technology, whether these take the form of new sophisticated cattle databases or the ability to accept forms submitted electronically. A further innovation yet to be introduced in England but which has already led to considerable improvements in Ireland is digital mapping or the Geographic Information System (GIS). Member States are obliged to introduce GIS by January 2005. It involves creating a digital map of the whole of the country, which will be far more accurate and up to date than the existing mapping system based on Ordnance Survey maps. Once the new map is complete, farmers will receive with their annual form a photograph of their holdings on which they may mark changes, thus making it easier to apply for arable aid. MAFF also envisages that GIS will improve the inspection process, "streamline validation processes, provide effective cross-checking and reduce validation times".[132] These benefits, of course, will only begin to be realised once the system has come on stream in two to three years time[133] and will be fully felt only "in the longer term".[134]

47. The introduction of GIS has generally been welcomed by the industry and their reservations concerning discrepancies between old-style maps on which claims have been previously based and new GIS maps have been successfully addressed by an undertaking that "where the farmer has relied on official information he will not be penalised for past years".[135] This points to some important conclusions about MAFF's introduction of new technology. 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.

CAPPA

48. The establishment of CAPPA will be a key test of MAFF's ability to deliver information technology projects and improve services to farmers. It is central to the next leap forward in IACS as the agency which will bring together all the schemes and manage the databases and payments. We have taken a close interest in the development of CAPPA since its inception and we are grateful to the Minister of State at MAFF, Rt hon Joyce Quin MP, for undertaking to send us quarterly updates on progress on the entire regional restructuring programme.

49. We welcome the principle of a single agency dedicated to the processing of CAP payments. However, we have serious concerns about the delivery of this vision. First, we are aware that the timing for the launch of the agency has already fallen behind schedule. It was expected that CAPPA would be in place from 1 April 2001; the current proposal is that it will be launched formally on 16 October this year,[136] and the Chief Executive Designate was quite categoric that he did not expect the programme as a whole to stick to the timetable outlined in the business plan.[137] Although we agree that it is more important for the agency to work than for the timetable to be rigidly followed,[138] this early delay does not bode well for the project or for the reliability of the business plan.

50. Second, we remain to be convinced that the direction of CAPPA has been sufficiently determined by the needs of farmers. As presented, the message is that the agency and its systems are constructed around the administrators and that the undoubted benefits to farmers (such as the promise of faster and more efficient processing of claims through the use of electronic forms) are by-products of, or at least of a second order to, the interests of MAFF officials. We believe that focussing on the delivery of services to farmers might offer different solutions, and that the current approach carries a danger of building in unnecessary layers of bureaucracy.

51. Finally, the success of CAPPA will depend upon the IT system developed for it. If, as anticipated, the CAPPA system can bring together the information from the existing CAP databases, it will play a significant part in the simplification of the system by enabling MAFF to pay farmers without issuing application forms.[139] If, however, the system goes wrong, the results will be disastrous and MAFF's credibility will be even more severely dented than it has been in the past by other public sector IT projects. The scale of CAPPA is larger than anything attempted before by MAFF and the system required is probably far more sophisticated, taking into account the need for sufficient flexibility to adapt to future changes in CAP schemes. MAFF Ministers must be absolutely certain that the technology will work before moving over to the new system.

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.

Appeals

52. In the course of our inquiry last summer into MAFF's Regional Service Centres, we received strong representations, especially from the Country Landowners' Association (now the Country Land and Business Association), on the need for an independent appeals system for IACS-related disputes. This suggestion found sympathy with the IACS and Inspections Working Group and somewhat reluctantly MAFF agreed to "consider a consultation exercise with industry to see if there is anything in addition to the existing provisions that would be a benefit to the industry".[140] In December 2000, MAFF finally released its consultation paper on an IACS appeal mechanism, with a deadline for comments of 13 March 2001.

53. The current appeal arrangements give five courses of action to claimants who wish to question a decision. They may:

  • discuss it directly with their RSC and ask the officials to reconsider
  • appeal through their MP to the Minister for reconsideration
  • seek redress in the courts through judicial review
  • appeal directly to the Department
  • appeal through their MP to the Parliamentary Commissioner for Administration.

The main criticism of this system is that there is no independent review of the complaint, except where maladministration is alleged. The Consultation Paper proposes a multi-stage approach whereby:

  • initially, appeals should be considered, as now, by the office which has handled the claim
  • secondly, the appellant would have the opportunity to appeal to administrators who have not hitherto been directly involved in the decision process
  • thirdly, if the claimant wished to pursue the appeal further, it could be referred to a special panel. The panel would make a recommendation to Ministers who would take the ultimate decision.[141]

54. MAFF's doubts about the wisdom of introducing an appeals mechanism centre on its utility in view of the extremely prescriptive nature of the regulations and the lack of discretion open to administrators in applying the rules. The Consultation Paper stresses that "it has to be recognised that the issues in cases involving what one sees as disproportionate penalties may go beyond what an appeals process could deliver."[142] This underlines our view that flexibility needs to be built into the regulations at the EU level. We agree entirely with Mrs Purnell that "if the rules are so complicated that farmers do make innocent mistakes which cost them huge amounts of money, we ought to think about simplifying the rules, rather than not applying them".[143] The paper also expresses concern at the number of appeals likely to be triggered, given that "the proportion of cases where decisions are queried is increasing and now stands at roughly a quarter of the number of penalties and claim reductions applied".[144] For IACS alone, 1,490 appeals were received in 1999.[145] This latter concern is the reasoning behind the proposal for a three stage process. The supporters of this system argue that it "will be a good discipline on MAFF officials to try to resolve [disputes] at the first stage so that the full-blown appeal process does not have to be triggered very often".[146]

55. An appeals mechanism is clearly not a panacea for the difficulties experienced by farmers who make genuine mistakes but we recognise that there is considerable desire within the industry for an independent review of individual problems. Nor is this desire limited to England. Scotland established an appeals mechanism similar to that proposed in England last November; and in Dublin we heard of plans to introduce similar procedures there, in answer to concerns expressed by farmers despite the undoubtedly closer working relationship between farmers and officials in that country. 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.

Culture

56. The changes we have discussed so far in this section are measurable and objective but there is a further change which would greatly ease the burden on farmers which is far more subjective. In France, the IACS forms completed by farmers are even more daunting than those used in England but the complexity of the paperwork is countered by the attitude of the officials and the availability of assistance in the local chambre d'agriculture. In the UK, on the other hand, farmers complain that officials are inflexible in their approach to applications, even when they wish to be helpful, from fear of breaking the rules. Although many farmers still prefer to hand in forms rather than post them, the only advantage that they gain from this is a quick check that boxes are filled in, not advice on how to complete the form correctly. Similarly, there is very little sense in England that MAFF is working for farmers, rather than fulfilling its role as policemen for the Commission. A change of attitude or culture within MAFF to place claimants at the head of its list of customers would be much appreciated in the industry.

57. Although a general change to a user-friendly approach would involve subjective measures such as changing corporate attitudes, there are clear practical steps which MAFF could take to prove its commitment to service to producers. First, it 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[147] 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.[148] 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.[149] 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. Mr Slade of the Commission was categoric that his job was only to ensure "a division of duties ... that those same people giving the advice are not the ones who the next day will go to see the farmer."[150] Whilst he diplomatically declined to criticise the UK, he agreed that France and Ireland had "that approach to facilitate claims by their farmers."[151] We accept Mr Duncan's defence that the "question of where does the dividing line [between the advice and audit functions] lie is a very difficult one to answer";[152] but we believe that MAFF's current approach is too timorous. 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.

58. The outbreak of foot and mouth disease towards the end of our inquiry brings particular difficulties for farmers with regard to IACS. Through no fault of their own, many livestock farmers will be unable to meet the various scheme requirements for retaining animals on their land this year or possibly next. It is vital that in handling such claims, MAFF show the utmost flexibility and display the keenest sensitivity to the plight of the farmers. On 16 March 2001 the Minister of Agriculture, Fisheries and Food announced European Commission agreement to a derogation from arable area rules to allow set-aside to be used for grazing without loss of aid payment.[153] At the same time, he indicated that MAFF was "in urgent discussion with the European Commission" as to changes to specific regulations in respect of other CAP schemes as a consequence of foot and mouth disease.[154] We await details of how IACS schemes will be handled in the context of foot and mouth disease and will assess them in the light of our exhortations to MAFF to adopt a more farmer-friendly outlook.

MAFF's performance

59. MAFF's targets for CAP administration are currently prepared for delivery through the RSCs and are worded as follows:

There are also three efficiency indicators of a three per cent reduction in each of processing cost per claim, cost per field inspection and administrative cost of making every pound of scheme payments.[156] No explanation was given as to why three per cent had been chosen; some effort should be made to justify this figure. MAFF officials told us that the focus was "on delivery both in terms of deadline and quality", with a management interest in the relative costs.[157]

60. We have been struck previously by the difference in the comparative costs of scheme administration at the different RSCs, information elicited by a parliamentary question.[158] We accept that this variation is at least partly due to the different nature of the claims handled in each office.[159] Nevertheless, our concern persists that there is insufficient information available to management within MAFF to assess the real cost of operations or scope for improvement. In particular, we were surprised that MAFF has not undertaken any benchmarking between the paying agencies in the UK, which operate similar systems and are therefore far easier to compare usefully than agencies in other Member States.[160] We believe that such an exercise should be undertaken in order to inform expectations of CAPPA. We recommend that it be done.

61. Last year the Irish Government set out its new relationship with farmers in a protocol on direct payments. We have seen the benefits of this more mature approach for ourselves, both in discussions with organisations in Ireland and in examining the much vaunted Irish IACS form. We were particularly struck by the farmers' praise for the role played by the agency which deals with cattle schemes and for its head who had come from a non-agricultural background, determined to treat farmers as "customers". The direct payments protocol is part of the general Irish Programme for Prosperity and Fairness and therefore has no immediate counterpart in the UK. However, it is far superior to the RSCs' Commitment to Service, its nearest equivalent in terms of IACS administration. 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.

Role of farmers

62. The Irish protocol on direct payments includes a section on the role of the farmer in ensuring speedy payments and resolution of problems. In the UK too it should be acknowledged that farmers can do more to make the system easier for themselves. For example, the Chairman of the IACS and Inspection Working Group believed that the first step in reducing the number of inspections required by the EU was for farmers to improve their record-keeping.[161] Similarly, an investment by the farmers now in ensuring that information on cattle is correctly included in the Government's database will pay off in the future by a removal of the need to submit claims for schemes covered by the system and perhaps an end to record-keeping altogether.[162] Those benefits would result from collective actions but individuals can also bring about improvements for themselves by such measures as using electronic forms and, of course, by submitting forms on time. If MAFF is to move towards greater co-operation with the industry, then this will require a change of attitude on the part of farmers as well. 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.


121  Q 28. Back

122  Q 258. Back

123  IbidBack

124  Ev. p. 88. Back

125  Ev. p. 18, para 5.1. Back

126  Ev. pp. 2-7. Back

127  Ev. pp. 2, 3. Back

128  Q 280. Back

129  IbidBack

130  Q 284. Back

131  IbidBack

132  Ev. p. 45. Back

133  Q 262. Back

134  Ev. p. 45, para 30. Back

135  Ev. p. 17; Q 111. Back

136  HC 231, Session 2000-01, Q 30. Back

137  Ibid, Q 36. Back

138  Ibid, Q 79. Back

139  Qq 33-34. Back

140  Government response to recommendation 21 of the IACS Report; Q 60. Back

141  Consultation Paper on an IACS Appeal Mechanism for Farmers in England, MAFF, 19 December 2000, para 31. Back

142  Consultation Paper, para 8. Back

143  Q 260. Back

144  Consultation Paper, para 13. Back

145  Consultation Paper, annex V. Back

146  Q 61. Back

147  Q 205. Back

148  Ev. pp. 85-86; Ev. p. 132, para 7; Ev. p. 18, para 4.6-4.10. Back

149  Q 223. Back

150  Q 171. Back

151  Q 170. Back

152  Q 197. Back

153  MAFF News Release 100/01, 16 March 2001. Back

154  IbidBack

155  Ev. p. 43. Back

156  IbidBack

157  Q 243. Back

158  HC Debates, 10 November 1999, col 664W. Back

159  Q 245. Back

160  Q 247. Back

161  Q 53. Back

162  Q 282. Back


 
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