Select Committee on Environment, Food and Rural Affairs Minutes of Evidence

Supplementary memorandum submitted by Sir Donald Curry (A 62)

  During my oral evidence to your Committee on 13 February, you asked me to let you have some further details on the costs of the proposals in the Policy Commission's report. I have provided this below.


  The £500 million figure we quoted in our press release was intended to give an idea of the scale of taxpayer funding required to support our package. It did not represent a fully scoped budget, an exercise that we simply lacked the time to carry out. The question of precisely how much funding is needed will now have to be worked through by the Government if and when they decide to take our proposals forward. However, for your information, our own rough estimate of costs was constructed on the following basis.

  Figures are for the period up to 2005-06.
£ million
Additional (1) modulation match funding in England 174
Additional (2) modulation match funding for Scotland, Wales, NI 103
Proposals for improved R&D structure (inc. demonstration farms) 50
Assurance, collaboration, local and regional food marketing, and improving food chain efficiency 65
More advice and better regulation (3) 27
DEFRA additional running costs (4) 30
Miscellaneous initiatives across Government (5) 40


  1.  Assuming 10 per cent modulation begins in 2004, this is the additional funding required to match the additional receipts raised by the new higher rate.

  2.  Though our remit applied only to England we say in the report that we would hope that modulation would take place on a UK basis. We therefore included an estimate of the costs of the additional match funding needed in Scotland, Wales and Northern Ireland.

  3.  Some costs are assumed to be met from 2004-05 onwards from modulated receipts and their match funding.

  4.  For reality we felt the need to include some measure of extra internal resources for DEFRA to support these various initiatives and especially developing the IT interfaces and other administrative support needed to run an easy to access, light touch "broad and shallow" agri-environment scheme.

  5.  This is a very broad figure covering items such as better regimes to police importation of illegal meat and development of a national nutrition strategy.

  These figures represent the additional public expenditure required to implement the Commission's specific proposals, on top of DEFRA's existing baseline and already planned commitments. Committee members also asked about the funding required from industry. We would expect there to be contributions from industry to the costs of the Food Chain Centre and its benchmarking work, and promoting Red Tractor assurance schemes. Initiatives on collaboration, improving food chain efficiency and local and regional marketing will also require industry contributions. But the main contribution from the food and farming industry would be in terms of the direct payment recipts being redirected through modulation. At 10 per cent modulation around £90 million a year of receipts would be being redirected, over and above the effects of the modulation already planned.

  I trust this is helpful to you.

Sir Donald Curry

28 February 2002

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