Cash flow warning over new system (From Gazette & Herald)

Cash flow warning over new system

DELAYS in the new system of paying subsidies means many farmers in Yorkshire will be forced to rely on the goodwill of bank managers to pay their bills.

That is the warning from the head of a top agricultural advisory body who claims that while farmers in Scotland, Wales and Northern Ireland received their Single Farm Payments last year, there was deep concern about when the money would be paid in England.

Roy Ramsbottom, chairman of the Institute of Chartered Accountants' Farming & Rural Business Group, said the delay was forcing many farmers to take on additional borrowing, posing a threat to profits.

"We must question why a scheme adopted in England did not have a computer

system able to cope with it," he said. "The delays are putting cash flow under extreme pressure, and many farmers will have to rely on the goodwill of the banks to fund them because they are unable to bridge the income gap themselves."

A House of Commons committee has estimated that late payments could cost farmers an extra £25 million in interest to banks.

Mr Ramsbottom said farmers were expecting to receive interim payments this month, but were concerned about the lack of guidance as to when they would be paid in full.

He said: "Our group's last survey of agricultural finances showed that many farmers are actually earning less than the workers they employ. Many are having to use their land and their skills to develop alternative enterprises as farming profits continue to decline."

Updated: 09:22 Wednesday, February 01, 2006