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U.K. to Begin Payments of 1 Billion Pounds to Farmers

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Dec. 1 (Bloomberg) -- The U.K.’s Rural Payments Agency began 2010 subsidy payouts to farmers and will disburse more than 1 billion pounds ($1.56 billion) in the coming days as it works to meet a year-end target.

Funds from the 2010 Single Payment Scheme will be paid to about 80,000 claimants, more than 75 percent of those eligible, according to a statement from the Department for Environment, Food and Rural Affairs, or Defra. The agency’s goal to reach 85 percent this month poses a “significant challenge,” it said.

The payments, introduced by European Union farm ministers in June 2003 amid reforms to the bloc’s Common Agricultural Policy, or CAP, have suffered delays in the past. A 2006 report by the U.K. National Audit Office said payment problems had undermined farmers’ confidence in the system, while last year the office said the average cost of processing each claim had risen 22 percent from 2005 to 1,743 pounds.

U.K. Agriculture Minister Jim Paice said in June that Defra must improve the accuracy of its data and value for money, boost efficiency and prepare new payment programs ahead of talks on further CAP reform in 2013.

“I am determined to bring a renewed focus on accuracy to the administration of the scheme so that legacy issues are addressed once and for all,” Paice said in today’s statement. Defra will hold talks with the Audit Office to ensure value for money for taxpayers, he said.

The Rural Payments Agency distributes 2.3 billion pounds in CAP payments each year, according to Defra. The Single Payment Scheme replaced most livestock and grain payments from January 2005, the agency’s website shows.

To contact the reporter on this story: Tony C. Dreibus in London at tdreibus@bloomberg.net.

To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net.