Threat of further payment delay looms for producer organisations after new review

Producer organisations are facing yet another year of scrutiny and possible payment delays as the Rural Payments Agency (RPA) carries out a further review of them.

The RPA announcement came just before Christmas when, after the NFU lobbied on behalf cash-strapped producer organisations, it reimbursed the payments it had delayed at the end of last year.

It had delayed payments at the end of 2010 to avoid an EU fine. Auditors had expressed concerns that some UK producer organisations were not operating according to its strict legal requirements.

The next comprehensive review process will start in February and will see producer organisations undergo further inspections by the RPA. It follows a similar process that started in autumn 2009 and ended in the first half of last year - and another review process that took place five years ago.

The RPA said in a statement sent to producer organisations: "This is to ensure that payments will be able to be made to compliant producer organisations at the earliest opportunity. We anticipate that the review process will take approximately three to four months to conclude but it will run concurrently with the normal processing of annual claims."

The release added that producer organisations may face further delays to their payments. "Accordingly, most producer organisations should receive their annual payment in a broadly similar time frame to previous years. However, payment will not be made until the organisation is considered compliant with the rules of recognition.

"We appreciate that the processes we have put in place will provide further difficulties for UK producers. But our decisions have not been taken lightly and are intended to safeguard the best interests of UK taxpayers and of the industry and to restore confidence in the scheme."

The RPA also warned producer organisations that those who were paid before Christmas are not necessarily in the clear. It said: "No inference should be made that payment of an in-year claim means the RPA considers a producer organisation to meet the recognition of the scheme and to be eligible for funding." Approval for 2011 programmes will carry on as normal.

A working party, set up towards the end of last year to find ways of restoring faith in the EU fruit and vegetables scheme, is to publish guidance notes for producer organisations next month to explain how they should be operating to satisfy the EU recognition requirements.

One of the bones of contention from the latest round of EU audits was the way in which producer organisations' marketing was carried out and by whom. They should make their own marketing decisions but auditors have found this is not the case in some instances.

Northern Mushrooms chairman John Smith told Grower that producer organisations should be allowed to use marketing agents to help them achieve the best possible route to market. His mushroom firm, Greyfriars in Yorkshire, is a marketing agent for Northern Mushrooms.

"Marketing agents can help members achieve transport efficiencies," said Smith. "We do not want the RPA bowing to the EU officials over these rules. We need to be much more robust."

Fen Peas managing director Stephen Francis said: "I think everyone from all sides of agriculture feels totally disillusioned with the RPA. It was November 2009 when they said they were going to inspect various things and now they are doing it again. Someone really wants to get a handle on it. "

Chief horticulture adviser to the NFU Phil Hudson, whose campaigning helped producer organisations get their fruit and vegetable scheme payments before Christmas, said the payments were "a victory for NFU lobbying" but warned: "There is still a lot of work to do."

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