Farmers have had yet another warning that mistakes made when claiming subsidy, accidental or intentional, will be heavily penalised. By that, government and European Union officials mean a farmer’s entire annual subsidy could be lost.
As that annual subsidy, known as the single farm payment (SFP) averages more than £25,000 and in many cases on Scotland’s bigger farms well over £100,000, that would be a massive blow to any individual farm business.
As with warnings of possible fines or penalties for many offences, inside and outside farming, the maximum is seldom applied. But there is no doubt the seriousness of making mistakes is increasing as are the penalties.
In 2008 there were 320 breaches of subsidy-claim rules by farmers in Scotland and the average financial penalty was less than £800. In 2009 there were 420 breaches and the average penalty was more than £3,300. The top penalty was 20 per cent of one farmer’s subsidy, £97,000.
The mathematically inclined, or even the rest of us, will immediately note that if a penalty of £97,000 was 20 per cent of a farmer’s subsidy, then his total subsidy must have been £485,000. We’re talking about a large-scale farming operation in either financial or physical terms, probably both.
As the question of whether farming subsidies are a good thing, a bad thing or an unfortunate necessity has been discussed here several times recently, let’s not go into that again this week. But the increasing severity of penalties for mistakes in a subsidy claim and the need for virtually immaculate record-keeping does indicate the fine line farmers tread in return for public funding. There is a serious responsibility to get it right. As Faust found, if you sell your soul to the devil, there can be the devil to pay.
The unequivocal warning that slipshod record-keeping or claim-filling, or attempts to cheat will be penalised came at last week’s Scottish Cattle Breeders Association conference in response to a question from Keith Redpath from the Borders, one of Scotland’s largest-scale beef farmers.
Pointing out that minor breaches of the rules were being met by “completely disproportionate” penalties, Mr Redpath said that more allowance must be made for genuine mistakes.
MEP Alyn Smith replied that there was no chance of European Union rules being relaxed. Drew Sloan, head of the Scottish Government’s agricultural department, was equally if not more blunt.
Subsidy claims under EU rules, he said, have to be assessed in absolute terms – that is, the claim is accurate or it is not – “rather than on proporitionality”.
There should be some sympathy for any farmer trying to keep track of births, deaths and movements of sheep and cattle, no matter the size of operation. At busy times of the year, such as calving or lambing, the physical demands of stock, and on humans, mean paperwork or electronic recording come well down the list. The best of systems is liable to have blips and the high rate of loss and need for replacement of identifying ear tags – estimated at more than 20 per cent annually – adds to the problems.
Changes in farmland use can also be either forgotten or not accounted for fully. Under EU cross-compliance rules, to get the single farm payment – cross-compliance being the agreement to farm in an agricultural and environmentally acceptable way in return for SFP – only arable land, permanent pasture or a permanent crop of some kind is eligible.
But Mr Sloan said that sample checks by EU auditors had found some subsidy claims being made included rocky outcrops, impenetrable vegetation, hard standings and farm tracks.
What he didn’t say, but is known anecdotally, is that developments in recent years on some farms, such as the building wind turbines with approach roads, and consequent loss of eligible land for subsidy, have not been accounted for and that at least one large-scale farmer is contesting a subsidy penalty for that “offence.”
Intentional over-declaration of 0.5 per cent of total area claimed, or one hectare, whichever is the larger, could mean total loss of a farmer’s SFP said Mr Sloan, and according to the EU’s hard-line auditors penalties for getting it wrong will be applied.
Harsh, and probably unfair in some cases, but the warnings were given last September and have now been reinforced. Time and effort spent on animal recording and land measuring will be worth it. The continuing attitude of a minority of farmers to record keeping, disposal of dead stock and replacement or swopping of ear tags – along the lines of “They’ll never check on me” – is hard to understand.
The past week or so of mild, if damp and cloudy, weather has been welcome after what has now been officially confirmed as the coldest December for 120 years and the second coldest since 1659. Because snow does not produce large amounts of water, it was also one of the driest.
The good news is that means land work, such as sprout harvesting, has re-started with less mud than might have been expected. The bad news is we might have water problems later in the spring.