The Rural Payments Agency (RPA) delivered an eleventh hour payment to Producer Organisations (POs) in turmoil shortly before Christmas.
The Newcastle-based agency made payments in the week before Christmas after UK POs were thrown into crisis when the EU held back funds.
It is unclear how much has been paid, but the RPA stressed the move represents a one-off payment and does not mean the organisations are recognised as POs long term.
A number of EU member states have experienced difficulties with the interpretation of EU auditors’ regulations, a problem the UK is attempting to tackle through a working group set up by DEFRA.
In a letter to one PO seen by FPJ, the RPA said: “POs are asked to note that any decision to pay an individual PO their in-year claim is taken independently of any future decision on recognition as considered by the full review to be undertaken by the RPA in 2011. No inference should be made that payment of an in-year claim means that RPA consider a PO to meet the recognition requirements of the scheme and to be eligible for funding.”
John Smith, chairman of Northern Mushrooms, said the payment came as a relief as he was facing a Christmas without paying staff. He said: “We are very pleased that the NFU and our local MP Julian Smith managed to convince [farming minister Jim Paice] to avert this disaster. It is still a major problem, we have sent our operating programme for the next five years to the RPA and until we have clarity and clearance that we are a bona fide PO we are not sure what we should be spending and can do nothing.”
It is understood one of the main problems the EU has is with a marketing agent being used to represent a PO due to link ups with supermarkets, however Smith claims POs should be allowed to use the “best routes to market possible” and PO members would “pull out quickly” if they had issues with marketing agents.
Richard Hirst, chairman of Anglian Pea Growers, added: “I think that industry confidence in the scheme is at absolutely rock bottom and it is very difficult to make business decisions and investment with the current situation.”
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