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asked Her Majesty's Government:
Whether they will alleviate any economic problems facing farmers affected by foot and mouth disease and bluetongue restrictions by making part payments of the single farm payments at the beginning of the payment window which opens in December.
My Lords, the Rural Payments Agency's aim in respect of the 2007 single payment system is to make more full payments to more farmers earlier than last year. However, the Government will not undermine the agency's recovery, nor introduce unacceptable disallowance risks, by insisting on a particular start date for payments.
My Lords, I am grateful to the Minister for that Answer but disappointed by it because it seems to me that what I suggested would have helped. Would Defra be willing to commission a thorough study into the full economic impact of animal disease outbreaks in order to establish a system which will respond quickly and sensitively to what I fear threaten to be increasingly frequent outbreaks?
My Lords, I am grateful for the right reverend Prelate's acceptance of the Answer but the situation is a bit like last year. I shall not give any target start dates but we will make more payments to more farmers earlier than last year, which was a substantial improvement on the first year of the scheme in 2005. Defra is looking at the review of this year's animal disease outbreaks, which have cost the industry an enormous amount. I have just spent three days in the north-west and I am well aware of the direct cost to the industry. They have also cost the taxpayer an absolute fortune. These matters are being reviewed so that we can learn lessons. We are still adding up the full cost as restrictions are still in place in respect of bluetongue, foot and mouth and avian influenza.
My Lords, does the Minister agree that this Question does not apply to farmers in Wales and Scotland because they will have received the payment in full? As I see it, the great disadvantage of the dynamic model is that it penalises both government through the excessive bureaucracy of the Rural Payments Agency and farmers through the £30 million it will cost in interest. Have the Government investigated the whole business of scrapping the dynamic model and reverting to a simpler system?
My Lords, the answer to the last part of the question is yes. It was a non-runner to wipe the slate clean; it was not possible. It was looked at by myself and the former Secretary of State some months ago. While I was in the north-west, I met farmers from Wales and Scotland who did not waste any time other than saying, "Pleased to meet you. By the way, we've had our single farm payment". I told them that the system in England was designed to be far more efficient than that in Scotland and Wales but that we had not yet been able to make such early payments. All I can say is that we will seek to pay the farmers a lot more money a lot quicker than we did last year.
My Lords, regrettably, due to earlier springs and warmer summers, bluetongue will be a presence not just this year but will be back next summer and the summer after that. I predict that it will become a permanent feature of animal disease in this country. What plans are the Government making to combat the permanent presence of this disease in UK agriculture?
My Lords, the noble Lord is quite right. It will be very difficult to fight a disease transferred by the midge. At present, along with the industry, the decision has been taken to keep the bluetongue strategy at phase 1; to keep the restricted area and not go for the whole country being covered as a bluetongue zone. If—we expect it to be when—it comes back and hits us really badly, perhaps after a mild winter, or there is another plume from across the channel, clearly in terms of trade restrictions it would be a lot easier if the whole country was a bluetongue zone. By "the whole country" I mean GB, not just England. That is absolutely crucial but we have not yet got to that point. We are watching it carefully. By next spring and summer, we hope to have the vaccine available. All the tenders have been placed through the companies, and we will be working, as we are now, with industry on a bluetongue strategy on the assumption that it will hit us and become an endemic disease.
My Lords, the noble Baroness says "the animal health budget". Defra's budget is always under threat. We are looking at the consequences of the Comprehensive Spending Review and of the outbreak of disease this year. We have to pay compensation on animals slaughtered. That is fine, and that is important to eradicate the disease. We have paid out compensation on animals that should not have been slaughtered but had to be because of poor biosecurity on the farms in question. That has cost the taxpayer an enormous amount of money. There is no budget for compensation for animal disease as such, but Animal Health has an overall budget of £400 million which is designed to help the taxpayer deal with animal disease. The consequences for the individual parts of the Defra budget will become known only when we have made the final decisions on the Comprehensive Spending Review.
My Lords, the Rural Payments Agency has five operational centres for making payments in Exeter, Northallerton, Newcastle, Carlisle and Workington. The headquarters are at Reading. That is considerably fewer than the number of old MAFF offices. It could be that the number of offices will be reviewed but, given what the Rural Payments Agency has gone through with the single farm payment, the last thing that I have asked it to do is to start organising offices. I would rather get the payment system up and running well before it starts to look at these other issues.
No, my Lords, I do not think that it does, because it is not a Defra-run laboratory. It is not a government-run laboratory. Pirbright is the Institute for Animal Health, which is a charity. Defra is a customer of that laboratory, which is sponsored by one of the research science councils from where most of the funding comes. It obviously has commercial research contracts. To the best of my knowledge, we do not provide capital expenditure. There is a huge capital programme that Defra helps with, but the capital part of the Defra budget is not the difficult one, to be honest; it is the normal revenue spending budget.
My Lords, the Minister will know from his visit to the north-west that the industry there in the uplands has been devastated by what has happened in the past four months. Why is it that in Wales payment of three-quarters of single farm payments commenced on Monday whereas, for some reason or other, the Rural Payments Agency cannot replicate that in England?
My Lords, it is for reasons that I thought the noble Lord would have understood. The system is different. It is a hybrid system that is not the same as that in Wales. In four or five years' time, some of the farmers in Wales will be complaining that their single farm payments are based on 10-year-old calculations of what they get in subsidies; whereas the English farmers—notwithstanding the present difficulties—will have a modern payments system relative to what they are doing now, not to what the historical level of payments were. I suspect that, in time—and I do not say this as a claim—Welsh and, indeed, Scottish farmers will see the benefits of the dynamic system. Its introduction has been fraught with difficulties—including the computer systems, the rush, some of the decisions on changing the system, mapping problems and all the other issues. It is taking time, and we did say that 2009 would probably be the first year in which the system was stable.