Subsidy system slammed.

THE Government has failed to keep control of European Union payments to farmers following the "poor implementation" of an agricultural subsidy scheme, MPs have said.

The much-criticised introduction of the Single Payment Scheme by the Department for Environment, Food and Rural Affairs (Defra) in 2005 is continuing to cause problems for farmers, the Commons' Public Accounts Committee said.

Nearly 20,000 farmers' entitlements under the 2005 and 2006 schemes were calculated wrongly and overpayments to farmers in those two years totalled pounds 37m, a report found.

Individual farmers who were overpaid have yet to be told how much they owe and when repayment is requi red, leading t o "uncertainty for many farmers".

The scathing report sheds light on the errors that persist in the Rural Payments Agency, an agency of Defra.

The RPA has been widely criticised for its rushed implementation of the Single Payment Scheme, which replaced previous EU agricultural subsidy schemes in 2005.

In its haste to get the scheme ready on time the agency created thousands of payment delays and caused widespread stress and anxiety for farmers.

This month Environment Secretary Hilary Benn said 700 farmers had still not received their subsidy for 2007.

MPs today described the scheme as the "most complex option for reform" implemented in the "shortest possible timescale" and said the RPAhad badly underestimated the scale of the task.