Farmers who do not soon receive all the money due to them under a payments scheme dogged by delays will be paid interest, the Govern-ment announced yesterday.
Environment Food and Rural Affairs Secretary David Miliband again apologised to farmers who have not got their cash under the Single Payments Scheme, which replaced other subsidy payments.
He told the Commons "some progress" had been made in catching up with the backlog in payments but the situation was still "far from satisfactory in a number of respects".
As of Tuesday this week, £1.38 billion representing over 90 per cent of the total SPS fund had been paid to over 100,000 applicants.
More than 82,000 claims had been settled in full and over 18,000 applicants had received a partial interim payment.
But thousands of other payments had not been made and, after representations by farming leaders, those who did not get the full sum by the end of this month would receive interest.
Shadow Environment Secretary Peter Ainsworth welcomed "modest progress" but added that this "appalling fiasco" had caused hardship for many in the farming industry at a time of "profound change".
Many questions remained to be answered about why the problems arose in the first place, he added.
Mr Miliband said the interest payments would be made by the Rural Payments Agency at one per cent above the London Interbank Offered Rate, subject to a minimum payment of £50.
He confirmed last month that top priority would be given to sorting out claims of more than 1,000 euros where no payment had been made. There were still about 2,300 farmers in this category and he said: "I recognise the hardship involved for them and deeply regret the distress caused."
He said he also recognised the importance of unresolved H ill Farm Allowance payments.
Of about 10,500 claims for this allowance, 5,000 had been paid in full and 900 given partial payments.
Work was continuing to pay as many SPS payments by the defined deadline of June 30.
Mr Miliband said work on delivering the 2006 scheme was now underway but warned it would be "very challenging" with no "quick fix" ahead.
Extra time was being allowed for the submission of 2006 claims, which would mean that around 4,000 farm-ers would not now be penalised, he said, and apologised again.