MEMORANDUM SUBMITTED BY THE NATIONAL FARMERS'
UNION OF ENGLAND AND WALES (NFU) (H 19)
1.1 The NFU welcomes the opportunity to
provide its input into the Select Committee's inquiry into the
operation of IACS in England and Wales. We welcome the inquiry's
intention to investigate the implementation and operation of IACS
in the other 14 member states. Gathering information on how other
member states operate IACS has been of immense difficulty. Despite
the system now having been in place for almost 10 years, the information
available from other MS is scant and appears shrouded in secrecy.
This does little to engender confidence that the system is being
applied uniformly throughout the EU and constantly give rise to
the belief amongst claimants in England and Wales that the system
is simpler and far more efficient in other MS. While we do not
believe this to necessarily be the case, any evidence that the
inquiry uncovers to dispel this would be a welcome development.
1.2 Our comments cover a range of IACS issues.
The NFU was closely involved in the IACS and Inspections Working
Group that was established as part of Minister's Review of Regulatory
Burdens. While we were extremely satisfied with the outcome of
that review group, there are a number of outstanding issues that
still need to be acted on or resolved.
1.3 We are, of course, extremely interested
in the application of the IACS system in the individual commodity
sectors. The Integrated Administration and Control System (IACS)
is set out to administer the CAP support systems, for arable producers
this means the Arable Area Payments Scheme and for livestock producers
it covers a number support schemes:
Sheep Annual Premium Scheme (SAPS).
Suckler Cow Premium Scheme (SCP).
Beef Special Premium Scheme (BSPS).
Extensification Payment Scheme (EPS).
Slaughter Premium Scheme (SPS).
2.1 One of the key problem areas for livestock
producers is that the area aid application for IACS is submitted
at a different time of the year to the applications for the livestock
support schemes. As a result of which a producer's business structure
may have changed between the submission of the IACS form and the
individual support scheme application, which is covered by the
IACS form. The following are the application dates and retention
periods for the respective livestock support schemes for 2000:
Applications5 December 1999 to 4 February
Retention period4 February 2000 to 14
Applications1 July 2000 to 6 December
Retention periodsix months from date
Applications1 January to 31 December
Retention periodtwo months from date
Simplified scheme applications apply for EPS
on the IACS Form. Standard scheme applicants give an indication
of intention to apply on the IACS form and submit six mini census
forms during the year to confirm the application.
Applications1 January to 31 December
Producers need to demonstrate that the animal
was on their holding for one month prior to it leaving the holding
3. RED TAPE
Regulatory review group
3.1 In February 2000, MAFF published the
report of the Regulatory Review Group which had looked at the
implementation and operation of IACS and inspections in England
and Wales. In the short time available to them, the Group had
looked to see whether the implementation of IACS particularly
disadvantaged producers in England and Wales against producers
in other Member States. They also looked at ways in which the
operation of the system in the UK could be improved and made more
3.2 In its conclusions, the Group found
little evidence that UK farmers were particularly disadvantaged
as many producers throughout the EU found the system bureaucratic
and burdensome. However, the group concuded that:
EU regulations are restrictive and
leave little room for manoeuvre;
development of databases and the
use of technology offers significant savings to industry and Agriculture
producers need to maintain better
basic records and develop IT skills; and
there is the need for an independent
We are keen to hear of the progress that has
been made on addressing all of the issues highlighted by the group.
However, there are a number of high profile recommendations that
we feel need to be urgently acted upon or, if action is being
taken, information released as to the exact state of play. In
3.2.1 One of the key recommendations of
the group was the establishment of an independent appeals mechanism.
It was hoped that this would act as a transparent, swift and cost
effective system for farmers to use to challenge rulings made
against them. The group recommended that the Government should
come up with proposals to be considered by the industry. It was
hoped that the system could be up and running within 12 months
of the paper's publication. We are concerned that to date no such
consultation has been issued and the timetable for the introduction
of the appeals mechanism, therefore, looks set to slip. The importance
of the Review Group, and a great many farmers, attached to the
appeals procedure cannot be underestimated. We would stress the
need for an urgent consultation on the introduction of an appeals
body as recommended by the Review Group.
3.2.2 The group had also identified the
general complexity of the IACS forms. This remains the case. The
scope for error when completing the form remains high. This is
true for the farmer completing his application but it is equally
true for the Officials who input the data from the claimants form
onto the Field Data Printouts. We are pleased with the Government's
progress on introducing an electronic IACS form which will go
a long way to eliminating the potential for clerical errors that
have, in some cases, led to significant penalties. However, the
uptake of electronic submission relies upon farmers with owning
or having easy access to computers to make the applications.
3.2.3 Even with the successful implementation
of the electronic submission system, there will be a number of
claimants who either cannot or will not submit claims electronically.
This being the case we would stress the need to maintain a flexible
approach to IACS form submission and retain the option for claimants
to submit paper forms.
3.2.4 We are also concerned at the delays
caused to the payment of arable area aid on land that has been
set aside for a non-food use. MAFF insist that payment cannot
be made on such land until two forms, the producer's IACS 9 and
the processor's NFC2, have both been received by the competent
authorities. This will confirm that the product has been delivered
to the first processor (or collector) and that it has been received
by them. This can lead to significant delays in the producer's
payment and does little to make the production of non-food crops
on set-aside more attractive to producers. It is, of course, essential
to ensure that all steps are taken to minimise the risk of fraud
within the system. However, we believe that there are sufficient
controls already in place to reclaim moneys paid to producers
in the event of a problem without having to insist on retaining
payment until both forms are received. We would urge for the rule
to be changed to allow payment to be made to the producer upon
receipt of the IACS 9.
Expansion of crops covered by IACS
3.3 While most arable and livestock producers
will be aware of the need to complete an IACS application, IACS
now covers more than just the AAPS and livestock schemes. A growing
number of schemes for other crops now fall under the IACS umbrella
and we have seen instances in the past where growers and producers
who have fulfilled their obligations under a scheme are facing
penalties or disallowance as they have not also complete an IACS
application. Where a scheme is brought into IACS, there must be
a corresponding information claim to ensure that producers do
fall foul of the new rules. This has not always been the case
in the past.
4. MAPPING AND
4.1 Mapping has been a source of confusion,
concern and continued difficulty since the introduction of IACS
in 1992. From the outset, it was clear that the Ordnance Survey
was unable to meet the huge initial demand for farm maps from
farmers wishing to claim under the scheme. While the initial difficulties
were overcome, it was apparent that many of the maps available
were out of date and inaccurate which resulted in a lengthy and
expensive exercise for many farmers in updating the mapping available.
4.2 We welcome, therefore, MAFF's commitment
to introduce a GIS mapping system for all UK producers at the
earliest opportunity. We believe, however, that the introduction
of that system will only be successful if:
4.2.1 Claimants are fully aware of the changes
and are kept informed of developments as they happen.
4.2.2 Where discrepancies occur between the
field areas currently being used by a claimant and the new areas
determined by GIS then there should be no penalty imposed upon
the claimant. We do accept, however, that all future area aid
claims should be made on the basis of the newly determined areas.
4.3 The inaccuracy of the mapping and the
non-availability of maps covering significant areas of the UK
have led to further knock-on difficulties. The greatest of these
has been the consequences arising from instances where, following
a field inspection, field areas are found to differ from those
given on OS maps.
4.4 There have been occasions where these
discrepancies have been found, producers have been penalised for
overclaiming even where they have relied upon existing OS data.
While we fully accept that where a new area is "found"
then producers should expect to use the new area for future claims,
it is wholly inappropriate to penalise them retrospectively. The
inequity of this situation was highlighted under the red tape
review and the NFU was pleased to see its recommendation: that
producers should not be penalised where they had used OS or similarly
reliable field area which was later to be found different from
a MAFF field inspection.
4.5 Despite this however, we are still seeing
a significant number of our members receiving penalties following
a field inspection that has involved remeasurement. Even more
worrying is that some of these penalties are being imposed retrospectivelyeven
where the producer has based his claim on areas determined by
a previous official field measurement.
The "Two metre rule"
4.6 The UK is unique in the EU in allowing
claims to be based on the actual area of a field rather than the
area of the crop within it. Equally, regional yields in the UK
yield regions are based upon whole field areas and are, therefore,
lower than they would have been if they had been calculated on
the cropped area. We believe this to be beneficial to the UK producer
and the environment as the producer is under less pressure to
plant the field to its full potential to maximise area payments.
4.7 Last year, MAFF announced on the recommendation
of the Commission, that they could not accept claims which included
headlands wider than two metres. Where this was the case the entire
headland had to be removed from the claim. While most claimants
were not greatly affected by this ruling, a significant number
of producers faced the prospect of having to reduce their claimed
area by up to 5 per cent to account for headlands which were larger
than the two metre restriction but were, nonetheless, traditionally
sized field margins. In all likelihood, the size of the field
margin was the same when the fields were first measured to calculate
4.8 The situation seems to be moving towards
a satisfactory conclusion with the Commission being convinced
that the UK is not permitting claims to be made on uncropped areas.
4.9 The circumstances surrounding the announcement
bring to light two problem areas:
4.9.1 Firstly that the Commission is not
always appreciative of the importance that the UK places on environmental
matters and that while schemes may be devised to deal with a certain
problem (for example to reduce the production of cereals in the
European Union) it can impact beneficially in other areas that
in themselves are worthy of maintaining;
4.9.2 Secondly the timing of the announcement
last year came at a time of the season where plantings had already
been made and areas of set-aside had been chosen. In effect even
if producers had wished to reduce the width of their field boundaries
they would not have been able to do so at that stage of the season.
4.10 It is essential that the announcement
of changes to field boundary rules, or any other ruling that may
have an impact on a farmers planting or set-aside decisions, are
made as soon as possible to ensure that producers have enough
time to adjust to the new rulings without minimal impact on their
5. BUSINESS CHANGES
5.1 It is very common for livestock producers
to claim under a number if not all of these support schemes. The
ability of livestock producers to change their business structure
is extremely limited by the varying application and retention
period dates and the link of all these schemes to the IACS which
is governed by an annual area aid application on the 15 May each
year. Annually a number of producers experience a loss of some
or all of their premium because they have changed their business
structure at the wrong time of the year.
5.2 At the current time it is extremely
difficult for producers to find a date to make changes to their
business structure which does not affect one or more of the livestock
support schemes. Producers find that making changes to their business
structure which suit one scheme gets them in to trouble with the
rules of another scheme.
6. LAND ELIGIBILITY
6.1 The NFU fully understands and supports
the reasons behind the eligibility requirements attached to land
for the purposes of claiming Arable Area Payments. However, as
we move further from the cut off date for eligibility of 31 December
1991, so it becomes more difficult for producers to prove the
eligibility status of land that has come into their ownership
since that date. Given that the question of eligibility is a key
one in any decision to purchase or lease land, we believe producer
should be able to receive information from MAFF, where they have
it, on the eligibility of any parcel that they are buying and/or
7. ELIGIBLE AREAS
7.1 We are also concerned at the implications
where crops are brought into the AAPS without a corresponding
increase in base areas. The inclusion of the flax and hemp regimes
into AAPS was a case in point. The base area was increased by
an area equivalent to the plantings in the base period 1989-91
which did not reflect the current levels of plantings. We would
urge that where new crops are brought into the AAPS in future
years then the base area should be increased by an area equivalent
to the average of the plantings in the three years previous to
the year in which the crop was brought into the AAPS.
8.1 In general, our members are highly complimentary
of MAFF staff in the regions and find them friendly and helpful.
Indeed, the recent proposals issued by MAFF to reorganise the
Regional Service Centres and reduce the availability of face to
face contact with local MAFF officials was met with some concern
by our members.
8.2 We have welcomed the efforts made by
MAFF to try and ensure that the advice given by the RSCs when
the talk to farmers is consistent. The "lead region"
system was an attempt to create centres of excellence specialising
in various parts of the IACS system and the schemes that it controls.
However, this has not always made it easy for use to determine
where it is best to direct enquiries and it has not fully eliminated
discrepancies in advice given.