Sunday, March 15, 2009

Spending money to pay it out

One of the many drawbacks of the CAP is that it costs a lot of money to run which reduces the sums that reach the supposed beneficiaries.

It has now emerged in response to a parliamentary question that each claim for the Single Farm Payment (SFP), irrespective of its value costs £742 to process. Junior Defra minister Jane Kennedy said that the figure was obtained by considering the direct processing costs and the total number of claims received.

A significabt number of SFP claims are worth around half of what it costs to process them, although this should change after the implementation of the Health Check reforms which are intended to cut very small payments to, for example, 'hobby farmers'. There were 14,465 payments under £400 in 2007 and 636 under £50. There were five payments made under £5.

It's a classic example of deadweight loss at the expense of the taxpayer. And it isn't helping farmers.

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