Gildernew decides to waive Less Favoured Areas Compensatory Allowance (LFACA) interest threshold

Agriculture Minister Michelle Gildernew MP, MLA, today announced that she had decided to remove the £50 lower limit on the payment of interest on the LFACA additional amounts.

Announcing the decision, the Minister said: “Given the uniqueness of this situation, I decided that, to apply the £50 de minimis threshold in these cases, was unreasonable.

“We have begun paying the £3.3million additional amounts to LFA farmers as arrears in respect of previous claim years. These payments arose because of the movement in exchange rates from the point when we set the rates in the Rural Development Programme.”

The Minister added: "In making this decision I have had to balance the industry needs with the costs incurred in paying out relatively small sums of interest. While I recognise that in many cases these interest payments will be small, I have, in this instance decided to waive the threshold. However, the reasons for introducing the threshold still apply and my Department will continue to apply it to interest payments made under the CAP subsidy schemes."

DARD had already advised farmers that because of processing difficulties, the payments will be issued separately. The first payment will be for 2009, followed by 2008 and then 2007. The interest payment will be the final payment to issue.

Notes to editors:

1. Earlier this year we realised that because of Sterling/Euro exchange rate changes the amounts of Less Favoured Area Compensatory Allowance (LFACA) paid in the claim years 2006, 2007 and 2008 fell slightly below the minimum rates set in Euro in the NI Rural Development Programme (NIRDP). We agreed to pay the additional amounts this situation created.
2. We have recently advised farmers by letter about the payments. The letter also said that interest will be paid where the total interest amount due is at least £50, and this will issue as a separate payment. To maximise the benefit to farmers, the £50 de minimis threshold will apply on a cumulative basis over all three years for which the additional payments are due and on which interest amounts will be calculated, rather than each year being taken separately. This minimum payment of £50 is now being removed.
3. For the recovery of a debt from a farmer, DARD has a £65 de minimis level set. This means that a debt (for example, from an overpayment or overdeclaration of land) of less than £65 is not pursued. This is on the basis that the administrative costs associated with the recovery of sums less than £65 outweigh the benefits.
4. All media enquiries should be directed to the DARD Press Office on 028 9052 4619. Out of office hours please contact the duty press officer via pager number 07699 715 440 and your call will be returned.