The government’s £200 million organic farming scheme is grappling with high IT costs, according to Whitehall auditors.

The Organic Entry Level Stewardship scheme is aimed at encouraging farmers into organic practices, in order to help the environment, and provides European Union subsidies to those certified.

In a report today, the National Audit Office said that £535 was spent on IT costs for each claim. This represented 84 per cent of total administration costs, and was an amount the NAO called “high in comparison to the relatively small number of agreements”. Nearly 2,300 farmers are part of the scheme.

Nevertheless, the costs were significantly less than the £1,743 administration expense on each claim under the troubled separate Single Payment subsidy scheme. Additionally, the introduction of an online application system was cutting the time needed for processing each form.

The organic scheme costs reduced in the last year, the NAO noted. The total IT costs for the organic scheme were £1.2 million in 2008 to 2009, compared with a peak of £1.5 million a year earlier.

Natural England, an agency running the scheme alongside the Rural Payments Agency, has to pay a charge on the Genesis IT system in use, but has “little control over the cost” of the system, the NAO noted. The system is an asset of the Department of Food and Rural Affairs, which oversees Natural England and the RPA.

The government had also been too optimistic about the rate of take up of the organic scheme, the NAO found. Edward Leigh MP, chairman of the Public Accounts Committee which will hold hearings on the NAO findings, said that unless take-up improved, “there is every risk that EU funds might not be used and hence have to be returned”.