27 June 2002

27 June 2002

The Deputy First Minister and Minister for Rural Development and Wales Abroad (Michael German):

I propose that:

the National Assembly notes, with approval, the progress made in 2001-02 in implementing the rural development plan for Wales, which includes provision for agri-environmental schemes, afforestation, Tir Mynydd and, for east Wales, processing and marketing grants and Farming Connect. (NDM1093)


This is a progress report on the rural development plan and follows on from motions that came before the Assembly last year. It gives us a chance to assess the progress of our long-term plans for rural Wales, particularly in the aftermath of the foot and mouth disease outbreak last year. The rural development plan, which covers 2000-06, was approved by the European Commission last October. It was the first of the United Kingdom plans to be approved, and covers expenditure of £450 million over seven years. The totality of what we can do is restricted by the disappointingly small allocation of European resources to the United Kingdom, which translates into only £12.6 million a year for Wales. We have reduced that problem by injecting additional Assembly resources—far more than is strictly necessary to match the European money—and by introducing modulation of direct subsidy receipts, and match funding that as well.The Assembly is implementing seven of the nine measures under the rural development regulation. These include, support for less-favoured areas, agri-environment schemes, afforestation and other forestry measures, processing and marketing, training as part of Farming Connect, and a raft of initiatives on wider rural development under article 33 of the rural development regulation. For less-favoured areas, Tir Mynydd is the Assembly’s new scheme for support in the hills. Gradually, that is moving from a headage payment to an area-based scheme with, importantly, extra cash available to farmers for environmentally beneficial practices on their holdings. In recognition of the effects of this significant change in the basis of payment, a safety net was negotiated to ease the transition to the new system, which has now been put into operation. This safety net, which protects those farmers disadvantaged by the new system, has been reduced from 90 per cent of previous entitlements in 2001 to 80 per cent for 2002. Payments of £36.1 million have already been made for 2002.The delivery of the agri-environmental schemes, Tir Gofal, and the organic farming scheme has been hampered severely by foot and mouth disease. It proved impossible to carry out any project officer visits between February and August 2001. As a result of that, only seven Tir Gofal agreements were signed during that period. However, since the resumption of visits, good progress has been made to address the backlog of agreements waiting to be signed.
For Members’ information, I propose to take interventions when I respond to this debate. Anybody who has not been able to ask questions will be able to do so then.Some 630 Tir Gofal agreements have been signed, bringing a total area of some 57,000 hectares into environmental management, and a further 200 agreements are close to being completed. Some 120 organic farming scheme agreements, covering 11,000 hectares of land, were signed in 2001-02. This brings the total number of holdings that have entered the scheme since its introduction in 1999 to 550.
On forestry, the woodland grant scheme continues to be the main tool for delivering new planting and woodland management. However, following the launch of the National Assembly’s ‘Woodlands for Wales’ strategy last summer, two reviews have been undertaken to evaluate grant aid in this sector. An examination of the results will be undertaken to see whether the grant delivery mechanism can be improved. The farm woodland premium scheme runs in conjunction with the woodland grant scheme, and has attracted some 650 farmers into the scheme, paying out approximately £365,000 in grant.Farming Connect continues to be a vital component of the rural development plan. This innovative scheme is designed to help farming families improve the viability of their businesses. Support is provided through initiatives such as free business plans, training, specialist advice, demonstration farms, and centres of excellence, to ensure that our industry is kept fully informed of, and is able to benefit from, the latest developments. The outbreak of foot and mouth disease delayed the launch of Farming Connect, which had been planned for spring 2001. It finally went ahead on 17 September 2001. The delay has restricted the extent to which consultants have been able to work up business plans with farmers and, therefore, initial progress has appeared at times to be limited. However, there has been high demand for business plans, with over 4,000 request coming in. Work on more than 1,800 of these plans is underway, and over 360 business plans have been completed. We are continually considering ways to streamline the service and reduce delays, and refinements to the business planning package are now being introduced. I am meeting shortly with the Welsh Development Agency, who progressed this matter, to ensure that we speed up the number of consultant visits and reduce the backlog.
Capital grants are also available through Farming Connect for farm improvement and diversification. These grants have been developed in partnership with other organisations such as the WDA, the Wales Tourist Board and the Forestry Commission, to provide a structured and co-ordinated service to farmers. The farm improvement and farm enterprise grants are dependent, of course, on the completion of a farm business plan. As a result, progress has initially been slow, but we have now received over 160 grant applications, resulting in 42 approvals. Processing and marketing grants are now available, and the WDA food directorate, which is administering the scheme on our behalf, is in active discussions with a considerable number of companies and has approved 20 applications across Wales, representing £17.3 million of new investment. A total of £3.2 million of this investment relates to non Objective 1 areas and represents three projects—in Deeside, Wrexham and Cardiff.Article 33 of the rural development regulation covers a total of 13 measures aimed at promoting wider rural development. Five of these measures are currently being implemented in Wales, and two of them are complementary to the capital grant scheme and Tir Gofal. For the other three measures, the Assembly is working with the WDA to develop proposals, and meetings will take place shortly. The emerging proposals will provide support for community partnerships for a range of activities. The aim is to enhance basic services for the rural economy and population, for the renovation and development of villages, for protection and conservation of rural heritage, and for the enhancement of the contribution that tourist and craft activities make to the rural economy, particularly those that will provide a high-value return from tourism or help to extend the tourist season in the area. I hope to be able to make a further announcement on my intention to assist in this area in the near future.
In some aspects, progress in implementing the plan has not been as rapid as we would have liked, but no-one could have predicted the outbreak of foot and mouth disease and its effect on the plan’s progress. Nevertheless, total expenditure under the plan is close to our original forecasts for the first two years, with substantial spending on support for less-favoured areas and on agri-environment schemes, including Tir Gofal and the organic farming scheme. In total, public expenditure of over £90 million had been incurred by the end of 2001. For those measures most seriously affected by the consequential effects of foot and mouth disease, the momentum is increasing as a result of the substantial efforts made to make up for the five months lost as a result of the outbreak. I am confident that all the measures being implemented will see full delivery in the current financial year.I now turn to the amendments, and start with Jonathan Morgan’s amendment 1. We should note the progress made to date with approval. This is a substantial programme with many benefits for rural Wales that has been subject to a difficult start. No-one could have foreseen the outbreak of foot and mouth disease or the extent of the problems that would arise as a consequence, yet we managed to commit and spend £90 million of the £100 million available in that financial year. As already stated, substantial efforts continue to be made to make up for the delays suffered by the programme. It is therefore correct to acknowledge the efforts of the agriculture industry in Wales, civil servants, agencies and others who have been helping to progress the development of this programme. Progress made in the light of these difficulties is the result of substantial effort by individuals across Wales. Therefore I reject amendment 1.Amendment 2 takes no account of the difficulties the programme has experienced and the significant progress that has been made by the variety of agencies, bodies and individuals, despite the problems faced. Therefore I will reject amendment 2. I will also reject amendment 3, because there is substantial support for agri-environment provision. Tir Gofal is an all-Wales scheme and makes available some £12 million per annum—a budget that is steadily increasing. The organic farming scheme is also an all-Wales scheme and makes available a further £2.7 million per annum. In addition, there are ongoing agri-environment schemes worth a further £10 million per annum. These schemes encourage environmentally-friendly best practice. However, we continue to look for opportunities to further these aims.I reject amendment 4 because it deals with a technical term used frequently and obviously in European Commission proposals. Just as we have ‘west Wales and the Valleys’, so we have ‘east Wales’. It is simply a matter of the way in which we phrase these matters.Finally, I am grateful for the efforts of all during this difficult period, in contributing to the plan’s progress and ensuring a successful outcome.

 

Alison Halford:

 Although Delyn is not the most rural constituency in Wales, I have paid close attention to the rural development plan. All schemes under this plan have brought great benefit to the people of Wales, and I welcome this opportunity to give my view on what is going well and what needs improvement. Farming Connect, although sadly delayed by foot and mouth disease until last September, has made a big impact. Diversification is the key to modern farming, and I am happy to see that more than 100 applications have been received for farm enterprise and improvement grants. Tying the promotion of diversification in with training has been essential. Today’s modern farmer must have business sense and husbandry skills. The key to further progress is advertising and communicating the benefits of diversification. Co-operatives and clustering are two good ways for the small farmer to boost production and reduce costs. In my constituency, I remember farm overstocking that led to many old sheep suffering badly as they were unable to eat because their teeth were falling out—reminiscent of what is happening with me—but it should never occur again.I am happy that Tir Gofal’s aims of improving and protecting our wildlife and heritage, and allowing more people access to the countryside, is being met. Two thousand additional heritage sites and over 700 kilometres of new pathways cannot be bad. I would have liked to have seen Delyn protect more habitats by now, but that is in the offing. However, the popularity of the scheme shows that there was a clear need, and I know that more money will have to go into the pot and that the need will be met.Organic farming is commendable. Has the Minister made a decision on whether to provide annual assistance funding for those farmers who have only recently converted to organic farming? The organic farming scheme has made a difference, because, as has been said, over 550 farms have decided to go organic since its establishment. However, if we are to boost organic farming in Wales, there must be a way of increasing incentives further.
A few months ago, I was delighted to invite Pren Cymru to make a presentation to the Economic Development Committee. It gave its views on making a business out of Welsh wood. Many of its ideas were innovative, especially with the newly reformed part L in housing building regulations that requires more use of wood. However, we have discovered that Welsh wood is unable to fully compete because it has too many knots in it, and therefore is undesirable. Creating more and more diverse woodlands is a popular objective, but how can such hurdles be overcome? I welcome the chance to comment on this plan. It makes a valuable and essential contribution to the future welfare of our rural communities, and enables our rural businesses to adapt and change in the face of challenges. Please listen to what is going on, and stop being negative.

 

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