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The eradication group was set up in November. Through it, the Government and the industry are working together to draw up a base strategy to bring about the eradication of the disease. I have met the group. The views of its representatives carry a great deal of weight, based on their experience and knowledge of farming and of the disease. I am hopeful that it will bring forward a strategy that will carry the confidence and support of the farming community. That is my objective for the group.
We rolled out a successful vaccination campaign against bluetongue. I am grateful for the right hon. Gentlemans kind comments on that campaign, which was a great example of farmers and Government working together. The seriousness with which farmers took the threat was indicated by the high take-up of the vaccination, which remains the only effective tool against the disease. Even now, I encourage farmers to continue to vaccinate to ensure that we remain bluetongue free. I listened to what he said about the developing strains of bluetongue and the need to ensure that our vaccines are kept up to date. Work on that is ongoing.
In that context, and bearing in mind our memory of foot and mouth disease, the Government have been discussing with representatives of the livestock industry how to change the arrangements for sharing the responsibilities and costs of animal health. Those discussions have been under way for some time. We plan to consult in the near future, and my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs hopes to bring forward some specific proposals soon. We anticipate that they may include a proposal to establish a new independent, arms-length body for England to deal with animal disease policy, and a livestock registration scheme to raise revenue for it. Those are difficult issues, especially given the potential costs for the industry, but there is a willingness to discuss how best to reduce the threat of disease. The scheme would differentiate the financial contribution according to the risks involved, which would provide an incentive to livestock keepers to improve their risk management. The consultation that we are considering would also seek views on the potential for private insurance to play a role.
The right hon. Gentleman mentioned the economic climate, which provides a serious challenge to all industries. However, farming as a whole is well placed to weather the difficulties, because demand for food will remain reasonably stable, even if different sectors face different difficulties, as he rightly said. For many farmers, 2008 was a relatively prosperous year. Total income from farming has increased by 9 per cent. in real terms and the outlook for livestock farms in 2008-09 is more favourable than it was in 2007-08. Average prices for fat cattle and finished and store lambs increased in 2008 by around 30 per cent., and store cattle prices increased by between 10 and 15 per cent, although I appreciate that his primary concern is the dairy sector and the price of milk.
The right hon. Gentleman will know that the current exchange rate has increased the value of all farmers income from European Union payments, and the exchange rate is good for exports. The reduction in the base rate
of interest will also help all businesses to invest by reducing the cost of borrowing. It is an ill wind that blows no one any good.
The Rural Payments Agency is making good progress towards its 2008 single payment scheme targets. I pay tribute to the work of my predecessor, the noble Lord Rooker, on the subject. He rightly takes a lot of credit for improving the RPAs performance. Nationally, £1.3 billion80 per cent. of the total fundshas been paid out to almost 93,000 farmers. However, I hope that the right hon. Gentleman will be reassured to hear that I am not complacent. Once the main bulk of the RPAs work on the single payments is concluded, I intend to undertake a review of the system, how we could introduce improvements without too much disturbance to the system, and the appeal process for the kinds of cases that he described. I anticipate a significant correspondence with him on that in the weeks to come.
West Dorset, like other parts of England, will benefit from social and economic investment under the rural development programme for England. The budget for the south-west region as a whole is more than £150 million. Officials meet regularly with the regional development agencies to discuss the development programme and to identify how we can improve its delivery. The South West of England Regional Development Agency is taking steps to speed up delivery of the programme and to ensure that it has sufficient capacity to appraise projects and administer funding.
Successful farmers are entrepreneurs who respond effectively to market demands. The EU protected food name scheme provides farmers and producers with a way to add value to their food products and to develop the market for regional and local food. The right hon. Gentleman may not be aware that an application is being made to include south-west beef and lamb in the scheme. I encourage local producers to use European standards, kitemarks and protection of names to their best effect.
Farmers look after much of our countryside and how they farm has a huge impact on the environment and biodiversity. The right hon. Gentleman rightly expressed concern about the impact of regulation, but it has an important role in safeguarding our environment and public health, as the latest food scareabout dioxins in Irish pig meatdemonstrated. That British pork could be demonstrated to be safe resulted from the farm assurance scheme. Regulation of that type brings huge benefits, but I want to ensure that we do not hold back farming with the burdens of excessive regulation. I am working to strike the right balance. Part of the problem is understanding the likely impacts of proposed new regulation. We are working hard in Europe to ensure that decisions are based on solid analysis of what needs to be done and the impact that decisions will have. A good example of when that did not happen is the electronic identification of sheep, on which he and I agree.
The Nitrate Pollution Prevention Regulations 2008 came into force at the beginning of this year. The right hon. Gentleman described them as barmyI am sure that he would have been sent out of the Chamber had he used stronger language. Some 60 per cent. of nitrates enter water from agricultural land. The new measures will help to tackle the problem, but I understand the concerns of farmers in nitrate-vulnerable zones. An extensive programme of advice and support is being
rolled out to help farmers to control nitrate pollution, with guidance documents, practical workshops and a helpline. I saw the potential impact for myself when I visited a pig farm. The farmer met the higher welfare standards by raising pigs in barns where they had proper bedding and strawthere was a mountain of bedding. The consequences for that farm were significant, considering the potential impact on the environment and the regulations. I am studying the situation carefully.