Examination of Witnesses (Questions 80
- 99)
MONDAY 26 JANUARY 1998
MR RICHARD
PACKER AND
MR FRANK
MARTIN
80. I am glad to hear that. If you look
at the table below, there are a number of cases listed and let's
take for example one area, the Broads, where there were 36 inspections
revealing non-compliance. There is a range of actions taken in
respect of various of these non-compliances. I wonder in what
kind of circumstances you would, upon finding non-compliance,
decide to take no action?
(Mr Packer) For instance if a further visit found
the matter had already been rectified.
81. Right. There are also warning letters
sent, in the case of the Broads in 22 cases, and I wonder in what
kind of case you would send a warning letter?
(Mr Packer) This is a good case. You will have
noticed "injurious weeds" is the main problem and the
report I think indicates that was due to fencing. Obviously the
habit has grown up in the Broads of fencing land to stop sheep
falling into the rivers or dykes, or whatever they are called,
and this was leading to unacceptable weed problems. We have broadly
told the farmers we do not accept the erection of fences is a
sufficient reason for inadequate control of weeds, and we have
sent them letters to say as much.
82. Would those letters threaten further
sanctions if matters are not put right?
(Mr Packer) They might, yes. They might wrap it
up a bit but that would be the ultimate and they would explicitly
say so.
83. I see there are twelve cases where it
says "Revised agreement and money recovered". Under
what circumstances would you recover money?
(Mr Packer) Normally on the basis there had been
a significant lapse from the agreement which could not easily
be rectified.
84. Would you then take further steps in
respect of making sure that such farmers do not make further claims?
What you keep track of the ones who perform badly in that way?
(Mr Packer) Under this scheme or under other schemes?
85. Under this scheme.
(Mr Packer) Yes, we would. We were discussing
just now the risk assessment procedures, but even before we had
specific risk assessment procedures we would follow up such cases
on a regular basis.
86. Would bad behaviour on the part of the
recipients of funds impinge upon that farmer's applications for
grants under other schemes?
(Mr Packer) No, legal entitlement is legal entitlement.
87. But perhaps there would be not so much
entitlement as other opportunities for obtaining grants?
(Mr Packer) No, their entitlements would be unaffected.
We might monitor their performance more closely[11].
88. Right. It says that grants paid out
in this year on this agreement where there was non-compliance
totalled £310,000. There are a number of instances of you
recovering money, what percentage of that £310,000 has been
recovered as a result of action taken on non- compliance?
(Mr Packer) I will have to follow up on that one[12].
Maria Eagle: Would you? Thank you.
That is all I have.
Mr Love
89. Can I start off with payment rates?
Page 40, Figure 26, "Comparison of payment rates". You
have a very, very large spread, from 13 with a payment rate of
more than 20 per cent higher, and 63 with a payment rate more
than 20 per cent lower. Do you think your Department has done
an effective job in deciding how much you would recompense farmers
for the amounts they have foregone?
(Mr Packer) That is a valid consideration but
it is not the only one. We need to take a view on income foregone
and on the environmental benefits to be gained from the scheme.
So the spread reflects the ease with which farmers enter the scheme,
the value for money which we assess broadly can be achieved from
that particular tier of that ESA subject to the constraints of
the budget, obviously, and the income foregone criterion. So it
is a complex range of considerations.
90. Let me ask the question in a different
way. Are you saying it was not because of inaccuracy in the calculations
you made about the income foregone but it was because of the complication
of those other factors that it was spread so wide?
(Mr Packer) Yes, I am saying that.
91. Can I take you to paragraph 4.19? The
Treasury sought assurance in 1993. You mentioned earlier, I believe,
that you had a target limit of 120 per cent over the amount. There
are 13 tiers which are paying over that amount. There is the Treasury
guidance, has that been ignored?
(Mr Packer) All payments are made at the levels
they are with the agreement of the Treasury. In the long-run payments
would not be allowed to continue at above the 120 per cent figure.
Of course the 120 per cent figure will vary from year to year
with farm incomes necessarily. So it is not always appropriate
to take a sort of instant view. Certainly I would hazard an informed
guess that all the payments which are more than 20 per cent higher
in Figure 26 on current incomes are way above that figure, as
some of the ones below it would be now, hence the two yearly consideration
of the levels. I am sorry, I may not have made that clear. I am
sure there are a lot more than 13 which are now above 120 per
cent because of the fall in farm incomes. This will be addressed
through the revisions to the level of payments which occur every
two years under all the schemes.
92. If you are revising them every two years
does not it come back to the original question I asked, should
you not be more accurate in the number of schemes that are above
and below the income foregone level?
(Mr Packer) As I have indicated, you could devote
a lot of resources to being precisely accurate on a given date
and by the time you had done the calculations you would be wrong.
I think there is a necessary limitation of resources that it would
be helpful to direct to that end.
93. I was rather surprised in the answer
to Mr Page about how do you incentivise farmers when you said
you could speculate on some of the non-financial reasons. Can
I re-ask the question in the sense that he asked it: what experience
has the Department built up on how to incentivise farmers, either
financially or by non-financial measures, in order to take up
these schemes?
(Mr Packer) In our experience the best incentive
is that their neighbours have taken up the scheme so that if the
take-up in an ESA is large, as in West Penwith, others in that
area are also likely to take that up. In other words, farmers
are influenced every bit as much by their neighbours and colleagues
as they are by officialdom, understandably so perhaps.
94. Let me take you to Figure 16 where there
has been a survey carried out. I wonder if arising from the outcome
of that survey whether you made any changes to the scheme. Let
me take one particular example. It says clearly that joining this
scheme that little change may be an important factor amongst those
who have joined the scheme. What effort you have made to incentivise
them to join?
(Mr Packer) Well, there are two forms of incentive.
There is the financial incentive, and we have discussed that,
and there is encouragement, which from the Department is properly
represented by ministerial statements and so on, but also by the
project officers referred to in this report. Those are the two
forms of incentive which we can offer in the Department. We try
to use both forms of incentive but not all farmers want to join.
95. Let me press you. You said that it could
be assisted by the fact that little change was required to existing
farming practice. I will not interpret that but have you ever
looked at whether you could incentivise them in terms of ensuring
that the hurdle to them joining the scheme was relatively minor
and then the tiers once they had joined the scheme would be a
little more effective?
(Mr Packer) I would be a bit hesitant of going
down the path of trying to devise schemes that are attractive
because there is not much to do and not much obligation on people
once they have joined. I think we need to define obligations which
produce the environmental benefits we seek. I agree with you that
there is no need to put unnecessary bureaucratic hurdles in the
way of people joining. Perhaps if I interpret what you say in
that sense I would very much agree.
96. Let me carry on a little further. This
socio-economic survey you carried out, as I understand it, cost
£80,000. Have the Department considered carrying out a further
study which may give them more insight into what measures they
could take of a non-financial nature to incentivise farmers to
join and be involved in the scheme?
(Mr Packer) I am sure that we would want to have
another look at these factors in due course. This of course was
in 1996. We would not want to repeat it too readily though. To
take up something I said myself, the change in farm incomes may
have altered the perspective sufficiently to reflect a different
approach. That is something we would have to reflect on.
97. One of the things that is clear here
if you look at paragraph 4.1 is it talks about the amount that
has been paid over and above and the amount paid below. There
is some suggestion that it is difficult to move on any of these
figures because to reduce the amounts paid to farmers would perhaps
cause a number of them to reconsider their position. I wonder
whether you have carried out any sensitivity analysis along that
basis about the impact that changes in the amount that is paid
through the scheme would have on take-up or on continued take-up?
(Mr Packer) I think actually a more prominent
factor would be the income foregone calculations which are likely
to require significant reductions in many of these payments over
the coming years and I think that that is likely to mask effects
of the sort to which you are referring.
98. So you think the overall levels of farm
incomes which have declined will cover any of these?
(Mr Packer) Will swamp minor effects, yes.
99. So it is not worth doing this sensitivity
analysis because of rapid changes in the overall level of farm
incomes?
(Mr Packer) It might be worth doing it if farm
incomes were stable over a period but given the very recent changes
I do not think it is worth doing now.
11 Note: See Evidence, Appendix 1, page 18 (PAC 156). Back
12 Note:
See Evidence, Appendix 1, page 18 (PAC 156). Back
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