Select Committee on Agriculture Minutes of Evidence


Examination of Witness (Questions 40 - 59)

TUESDAY 23 MAY 2000

RT HON NICHOLAS BROWN, MP

Mr Marsden

  40. Before turning to specific questions on hill farming, can I follow up what Mr Jack was saying about outputs. The last time this was tried was with the Five Year Plan in Soviet Russia and I do not think it was tremendously successful but I was interested that you talked about specific outputs in terms of the environment and countryside that are measurable to some extent. Does this then not inevitably lead to the question do we need MAFF to work separately from DETR or should there be the creation now of the Ministry of Rural Development?
  (Mr Brown) We are working jointly on these environmental targets because clearly they are supposed to be achieved by the work of both our departments not acting independently. You are also right to say that although we are trying to find some way of measuring the outcomes, it is not an exact science because of the nature of the yard sticks we have to use.

  41. Hill farming. Hill farmers typically are one of the hardest hit sectors. The Action Plan for Farming has said the Government will increase support for hill farmers beyond the level specified in the Rural Development plan. An additional £60 million is going to be made available to hill farmers in 2001 and this is the third consecutive year in which an extra £60 million has been found. Can I ask you how much of this increase do you expect to retain in 2002 and thereafter? Is it possible to say at this moment in time where the future lies?
  (Mr Brown) I have no commitments whatsoever from the Treasury about next year or the year after. The payment that was made two years ago was a one-off payment to meet the fall in farm incomes and was not to be repeated. The following year was a one-off payment, again not to be repeated, and this is the third year we have done it. Yes, the regime itself is going through a period of transition from headage based payments to an area based payment system and of course the measure is now consolidated in the Rural Development Regulation which we have had to submit to the European Union to cover a seven- year period. There are some underpinning assumptions in what we have submitted to the European Union but one of them is not a continuation of the enhancement of the LFA. That does not mean that I do not see the need to keep pressing on this issue and to make sure that what is done in the future dovetails with the Rural Development Regulation.

  42. So you would say it is still a priority outside of the RDR then?
  (Mr Brown) Yes, I take the current position of hill farmers very seriously indeed. It is perfectly clear that although farm incomes have been hit in general the income of hill farmers have been hit hardest and we have got to find a way through. A mixture of solutions as we have discussed many times before. What cannot be the answer is an over reliance on direct supply side measures, effectively livestock subsidies.

  43. The Action Plan for Farming indicated that most of the money could be used to increase LFA compensatory allowances and the remainder will be used on a consultancy programme designed to improve hill farmers' access to business skills. What proportion of the £60 million has been used to increase the LFA compensatory allowances system?
  (Mr Brown) The division is of the order of £50 million for the enhancement of the LFAs and £10 million for business advice. I would stress to the Committee the importance that I attach to intervening now with clear business advice. We have got to help people who are running farm businesses that have been in prolonged difficulty get their businesses through to better times and, remember, there are a whole range of public interests in this not just the need to try and help the farmers through. There are also environmental considerations and landscape considerations and some of these hill farm businesses are in some the most beautiful parts of the country and we have clearly got a broader public interest in keeping it that way and discussions on these aspects across government because the Department of Environment has an interest in it as well as ourselves.

  44. So can you give some examples of how the £10 million is going to be used to enhance business skills? What tangible examples can you give?
  (Mr Brown) We are hoping to buy in the extra expertise into the Department of Trade and Industry's small business advice service and then to be able to go to the individual farm businesses if the farmer wants it, it is not a compulsory measure, but to be able to go through their own business plans, point to the strengths, point to the weaknesses and then draw their attention to a range of possible ways forward. We think now is the right time to take stock.

  45. I want to press this point practically. Are you saying you envisage an agricultural consultant going out to meet the farmer and then helping him to prepare a sort of Action Plan of his own?
  (Mr Brown) That is exactly what I mean and, if necessary, to talk to the supporting bank managers as well. The way forward may not necessarily be an agricultural way forward, it may be a combination of things. If we are to intervene, if we are to help people look to the future, now is the time to do it.

Chairman

  46. Minister, one of the few regimes where the UK has a significant take in relation to what we give is the Sheep Annual Premium. Is it Government policy that should become degressive?
  (Mr Brown) There are about to be discussions within the European Union about the sheep regime. We are in very close contact with other Member States who have a particular interest in this. As you will know, and I certainly know, we are a minority. It is ourselves, France and Ireland, who are not the only interest but the principal interest. The review process has not yet started. I think I am right in saying that, correct me if I am not.

  47. The national interest in terms of pure take would be non-degressive, would it not?
  (Mr Brown) I really do not want to commit myself at the outset to what is going to be a competition within the overall CAP budget for resources.

Dr Turner

  48. Can I ask a supplementary question. I want to clarify the £10 million because elsewhere in the paper there is a £6.5 million sum for support for farmers in general to develop better business practices. I wanted to know if it was a total of 16.5?
  (Mr Brown) The extra money is for lowland farmers. The money you are referring to is targeted at lowland farm businesses.

  49. The total sum going is 10 plus 6.5?
  (Mr Brown) That would be right.

  50. Towards the small businesses.
  (Mr Brown) Although the 10 is shared across the United Kingdom.

Mr Todd

  51. Not just England.
  (Mr Brown) No, it is not just England. I think the six is, I suspect—

Dr Turner

  52. We came to the ten in the context of hill farming and I wanted to be clear whether the ten included the 6.5.
  (Mr Brown) No.

  53. Referred to more generally.
  (Mr Brown) No, the two figures are different.

  54. Different sums of money, the total is 16.5.
  (Mr Brown) Yes, the £10 million is part of the £60 million announced for the Hill Farm Allowance. We intend to spend £50 million as a direct aid, ten million paying for the hill farm advice and a further six million is to offer the same, not exactly the same but the same service to lowland farmers.

  Dr Turner: I just want to be clear.

Mr Jack

  55. Following Mr Todd's line of argument earlier on, the message you have given us about the support for hill farmers is "one more one-off payment and then you are on your own, boys". Have you given notice of MAFF pulling out support for hill farmers? Perhaps you could just enlighten us a bit as to what happens when this last one-off really becomes a one-off?
  (Mr Brown) I am sorry. I am being shoved a note in answer to the last question which confirms what I said, I think.

  56. Good.
  (Mr Brown) I am sorry. I intended no discourtesy.

  57. No, no. I know you did not intend any discourtesy. I shall repeat the question. Mr Todd put us in a mind of thinking which said MAFF is not going to be imposing prescriptive plans on any sector. If we follow that logic, what you seem to be saying with this one-off final special offer of a further £60 million, part of that money going to business help, is "after that, boys, on the hills, you are on your own".
  (Mr Brown) No.

  58. Right.
  (Mr Brown) That is not what I am saying. It is not my intention that the issue be left there. However, I am in exactly the same position as I was last year and the year before, I am not in a position to announce an enhancement of the LFA for the future financial years. I cannot give that announcement. Indeed, I remember saying exactly the same to this Committee last year.

Chairman

  59. It may not be three hits and you are out, as it were?
  (Mr Brown) You know perfectly well what sort of position I am in. I cannot give a commitment that the Government will spend the extra money next year. Indeed, I could not have given that commitment last year, and did not.


 
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