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Single Farm Payments

Oral Answers to Questions — Environment, Food and Rural Affairs – in the House of Commons at 11:30 am on 11th March 2004.

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Photo of Alan Beith Alan Beith Chair, Constitutional Affairs Committee 11:30 am, 11th March 2004

What assessment her Department has made of the likely impact of her proposals for single farm payments on (a) tenant farmers and (b) livestock farmers in Northumberland.

Photo of Margaret Beckett Margaret Beckett The Secretary of State for Environment, Food and Rural Affairs

My Department will publish shortly an analysis of the economic impact on the English farming industry of the decoupling of common agricultural policy direct payments and the decision to allocate entitlement on the basis set out in my statement to the House on 12 February.

Photo of Alan Beith Alan Beith Chair, Constitutional Affairs Committee

Did the Secretary of State have that analysis before her when she made the original decisions about payments? Did it take account of the position of hard-pressed tenant farmers, for whom quota is the only capital asset for retirement, or the position of farmers in severely disadvantaged areas—SDAs—where the choice of the SDA line rather than the moorland line means that livestock farmers will be hard hit while the main benefit goes to grouse moor owners, and while their neighbours and competitors in Scotland do not face a similar loss of income?

Photo of Margaret Beckett Margaret Beckett The Secretary of State for Environment, Food and Rural Affairs

Of course extensive economic analysis was available to us, but we continue to develop that as time goes on. We are aware of the concerns about the SDA-moorland split and we are carefully considering the different representations that we have received. I cannot honestly say whether we can make any change, but I assure the right hon. Gentleman that we take the concerns that are being expressed very seriously.

Photo of David Drew David Drew Labour/Co-operative, Stroud

Will my right hon. Friend hold urgent discussions with the Tenant Farmers Association? The issues raised in the question are linked to tenancy reform, and there is an ideal opportunity to give some guidance and leadership to tenants who are considering their future. There is no better way of doing that than by talking to members of the TFA.

Photo of Margaret Beckett Margaret Beckett The Secretary of State for Environment, Food and Rural Affairs

We are always happy to talk to the TFA. Indeed, I understand and share my hon. Friend's anxieties, especially about the position of tenant farmers. We shall continue to discuss with them what problems arise in particular and what we can do to assist.

Photo of Michael Jack Michael Jack Conservative, Fylde

When the noble Lord Whitty gave evidence to the Select Committee's inquiry on milk pricing, it became evident that no formal research had been carried out on the impact of the proposals for single farm payments on the SDAs. Will milk producers be included in the work that the Secretary of State is undertaking? A report on "Farming Today", which contrasted two 200-acre farms with 300-odd cows, suggested that the SDA farm would receive £23,000 less in income than a similar farm further down the hill. Will she assure me that she will consider the matter?

Photo of Margaret Beckett Margaret Beckett The Secretary of State for Environment, Food and Rural Affairs

As I said to Mr. Beith, we are continuing to develop the analysis further and we are considering all those issues. We shall do what we can to assess them carefully and take them into account. Of course, Mr. Jack will be mindful, as I am, of the potential for major changes for individuals through the different system. That is one of the main reasons for phasing it in over some eight years.

Photo of Andrew George Andrew George Shadow Minister (Environment, Food and Rural Affairs), Shadow Minister (Environment, Food and Rural Affairs)

On the impact of Government decisions on livestock farmers in Northumberland, will the Secretary of State confirm that Mr. Jim Dring, a Government vet, would, on his admission, have prevented the devastating foot and mouth outbreak in 2001 had his inspection of Burnside farm in Northumberland been more rigorous? Does she accept that that vital evidence was withheld from Dr. Anderson's inquiry into the lessons learned from the outbreak? Does she agree that that narrow but crucial matter should be properly investigated—it is the only reasonable thing to do—through an independent inquiry?

Photo of Margaret Beckett Margaret Beckett The Secretary of State for Environment, Food and Rural Affairs

No, I cannot confirm what the hon. Gentleman says. Nor, indeed, is it the case that the issues that lay behind the memorandum—the note that Mr. Dring made for himself was withheld from the Anderson inquiry—were withheld from the inquiry.

I cannot confirm the hon. Gentleman's allegations and it would be wholly wrong, and very unfair to Mr. Dring, to suggest that in some way—and this is the implication—he was responsible. It was the person who employed certain standards that helped to foster such an outbreak who was responsible. Mr. Dring has done no more than any one of us might do in musing about the matter, examining his conscience and asking, "Oh dear—is there more that I could have done?" It is what any reasonable human being should do. The idea that he should be held guilty for doing that is very unfair.

Photo of John Whittingdale John Whittingdale Shadow Secretary of State for Environment, Food and Rural Affairs

Is the Secretary of State saying that, when making decisions on single farm payments, she was unaware that that would lead to up to 5,000 farms in SDAs, such as those in Northumberland, experiencing cuts in support payments of up to 75 per cent.? Does she accept that the loss of those farms will be a disaster not only for the farmers but for the environment? Although I welcome her willingness to examine the matter, does she accept that changes have to be made to the system to avert a potential catastrophe?

Photo of Margaret Beckett Margaret Beckett The Secretary of State for Environment, Food and Rural Affairs

No, I am not saying that I was unaware that there would be an impact. There will inevitably be winners and losers when there is such a change. However, overall we think that about 13 per cent. of present entitlement will be redistributed over eight years. With any change, there are shifts and some individual businesses are particularly affected—however, every business should be able to benefit from the economic opportunities of decoupling. I repeat what I have said before, namely, that one of the chief reasons why we have agreed to phase in the changes over eight years is precisely to allow affected businesses to adapt.