Examination of Witness (Questions 120
- 139)
TUESDAY 29 FEBRUARY 2000 (Afternoon Sitting)
RT HON
NICHOLAS BROWN
120. Not the activity of the individual applying?
(Mr Brown) No, it is the—I am trying to think
if there would be any disallowance. I think not.
121. From a quick look through I could not find
any.
(Mr Brown) I think you are on the right lines. I am
just trying to think how you would devise a Countryside Stewardship
Scheme that did not involve some working of the land in some way
or another. It is difficult to see how you would do that. We will
wait on the applications with interest.
122. Some of the categories here are things
like restoring hedgerows and those sorts of goals which do not
necessarily involve active working farms.
(Mr Brown) Most landowners like to derive an income
from the land and that almost entirely means agricultural working.
Chairman: Just wait until they get walloped
by business rates on their livery stables.
Mr Paterson
123. Could we turn to another subject. Why is
such a small percentage of the available funding going into marketing
and processing?
(Mr Brown) I am not sure it is that small. The division,
as I said before, is roughly two-thirds/one-third. There is scope
for moving money around when we see what bids come in. I have
also spent some money this year that we were able to get from
the Treasury essentially on marketing grants and projects. I was
very impressed by the calibre of the schemes that came in to bid
for that money because we took bids. Maybe you are right, maybe
there is more demand out there. None of this is set in stone.
124. There are two streams, the processing and
marketing grant scheme for capital projects and other marketing
activities that can be funded under the Rural Enterprise Scheme.
How much of the Rural Enterprise money is likely to be spent on
marketing and other projects to add value to farm produce?
(Mr Brown) If you are trying to sort the bids into
separate categories, I am afraid it will depend on the bids themselves.
I have not made an estimate of that.
125. So there is no clear plan on that at all?
(Mr Brown) We know there are bids, as I say, because
we have just asked for some. I said in my statement that I would
try to give priority to bids from those parts of agricultural
sectors that are not aided through the First Pillar of the CAP.
So we gave priority to bids from horticulture, from the poultry
sector and, above all, from the pig sector. There is no doubt
in my mind there is a pent up demand for measures of this kind
just from the bids that we have received this year.
126. Will it be possible to bid for both streams,
to qualify for both streams?
(Mr Brown) I would have thought so, yes.
127. Have you looked at other countries? We
had a case quoted this morning by the President of the NFU of
a remarkably small dairy farm near Geneva which was prospering
because it had a home cheese business.
(Mr Brown) I have actually visited such businesses.
Peninsula Milk in the South West is run by dairymen. They do their
own processing, they have their own cheese products, their own
cream and, of course, their own milk rounds. These things are
flourishing already.
128. Have you visited projects abroad to see
how marketing is done there?
(Mr Brown) I have done some visiting. I cannot specifically
say that I have visited a small independent dairy co-operative
that does its own marketing abroad but I have visited them in
this country.
129. What steps have you taken to make sure
the application for these farmers is simple and also quick?
(Mr Brown) You are preaching to the converted on all
of that. We have not opened up the schemes yet. We were able to
administer our own marketing grant scheme this year which meant
we had to get it in within this financial year or we would lose
the money, and we were able to do that within a matter of months.
So it can be done by us.
130. What is the time limit on making decisions?
From the moment the form arrives at your Ministry, how quickly
will a decision be made?
(Mr Brown) The administration is being done at regional
level so it will be a matter for the regional partners. I want
this to work expeditiously. Pretty obviously nobody wants long
delays.
131. You have not set a formal limit?
(Mr Brown) We have not looked at the details of administering
the schemes yet. Remember this has all got to be approved by the
European Union and we are not there yet. If you are saying can
we run schemes of this kind expeditiously, certainly the Department
just has done. It took a couple of months to administer quite
a large budget.
Mr Jack
132. Under the processing and marketing heading
why is there no expenditure planned for the 2000-01?
(Mr Brown) Because of the rate at which the monies
will come on stream is the blunt answer to that. Projects that
we currently have in hand continue. This is a key point. This
is a rising profile of expenditure. I guess the Committee has
got this. The way the expenditure profile rises is very well set
out on this. In England the marketing grants area was closed,
not by me but by previous Ministers, so I am trying to rebuild
it. As you can tell I am very keen on this area, I think it is
an economically rational way to get farm businesses closer to
the marketplace. I am starting, unlike my territorial colleagues,
from zero. The extra money we spent this year had to be gone for
especially from the Treasury, which it was and I got it and I
spent it.
Mr Hurst
133. Minister, this system is devised rather
like a strange sort of cheesecake. One of the slices I want to
ask you about is the Rural Enterprise Scheme and clearly there
are various categories of enterprise which might be eligible.
Have you formed a view about how you might achieve the balance
between the application and—
(Mr Brown) No, because I think it will be different
in different regions. I am leaving it to regional partners, acting
under national guidelines, to make the decisions themselves. I
want decision making on individual schemes devolved downwards.
I think as a Department we still want to see, as we do now under
the 5b schemes, the very large bids just for the purposes of keeping
an eye on what is going on. In general I am content for it to
be administered at regional level with our partners across Government
and the MAFF Regional Director chairing the meeting in most cases.
134. Would you be able to say what kinds of
factors would affect the regional variations on the national scheme?
(Mr Brown) The nature of the farm businesses themselves.
You would expect something a little different coming from the
South West, for example, where by and large the farms are traditional
family farms, smaller than the average size but there are more
of them. In those circumstances you could envisage bids for co-operative
working amongst farmers, for example, a machinery co-operative
or a marketing co-operative or some other working combination,
where that would be a less likely bid coming from an area of large
arable farming where one group or company own the whole business.
135. What sort of level of the expenditure would
actually be going on training and consultancy and business plans
or will it be, in fact, direct money to enterprises to kick start
them?
(Mr Brown) The money that we have forecast for training
expenditure is on a rising profile starting at one million. It
is the same point I made to Mr Jack earlier. It is a new area
of expenditure for us so it has to come from a modulated amount
of matched funding so it kicks in slightly later than some of
the other things which are successor schemes. It starts in the
year 2000-01 at one million and then rises across the period to
a budget of four million or thereabouts. That is at the end of
the period, that is 2006-07. It is not the largest proportion
of the total.
136. I understand that. The tenant farmers in
their submission to us had particular difficulties which owner-occupier
farmers do not with regard to accessing the number of grants and
schemes available. They are particularly interested in community
based schemes, community based projects, that might involve public
transport or other public services. Have you formed a view about
how you might encourage those applications?
(Mr Brown) The Ministers in the Department of the
Environment, Transport and the Regions and Department of Trade
and Industry have schemes that they operate. The officials of
those Departments will be part of the regional groups that look
at the different bids. The whole purpose of that is to see if
we cannot sit different parcels of public money alongside each
other and combine projects to get the best possible outcome for
the money that we are spending. That is the whole purpose of putting
these things together at a regional level. It may well be that
the money to assist a rural transport scheme is held in the DETR
budget rather than in my Department's budget; in fact that will
almost certainly be the case.
137. Does that affect the overall budget? Is
there more budgetary money coming into these schemes as a consequence
of that or were the fees you mentioned inclusive?
(Mr Brown) I have discussed this with other Ministers
and we are determined to work together on these things and to
make sure that the schemes that are being run at a regional level
by other Departments are discussed with our Department and vice
versa so we can get the most integrated effect that we can. A
good example would be the desire to have some project to lift
flagging market towns. A farmer's market could be my contribution
to such a project and maybe a rural transport scheme that brought
people in at market time would be the DETR's contribution to such
a project and you can see how the Department for Culture, Media
and Sport might want to put in some funding for something that
was orientated towards their responsibilities, and indeed the
small business element of the DTI might want to put something
in. Together you can have quite an interesting and strong package
of measures that could achieve the effect you are looking for.
It is not for me to describe individual schemes.
138. I understand that.
(Mr Brown) It is to make sure that we are facilitating
that sort of thing and joining up the work at a regional level.
139. Am I right in my arithmetic deduction that,
in fact, there will be more money available for these schemes
if you have the co-ordination between various Government Departments?
(Mr Brown) There will certainly be more money for
an overall project, some elements of which would fall within the
Rural Development Regulation and some elements which would sit
happily alongside it but would not come under what is, after all,
a Common Agricultural Policy instrument. The scope for these schemes
is constrained but there is not any rule that prevents you working
rationally with others to get the best possible outcome and that
is what we are setting out to do.
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