1 December 1995

Budget delivers nothing but disappointment

By Shelley Wright

THERE was nothing but criticism from the farming industry for this years Budget.

Despite months of concerted lobbying from farming groups, hill livestock compensatory allowances remained frozen for the second consecutive year. The NFU denounced this as a rejection of the legitimate needs of struggling family farms.

But farm minister Douglas Hogg said that, against the background of a very tight public expenditure round, he was delighted that MAFF had been able to persuade the Treasury not to cut HLCA payments.

Mr Hogg conceded that hill farmers had suffered a mixed year, and that poor weather conditions last year had left many with low feed stocks. But prices during the autumn sales had been good, and many livestock subsidies had increased due to the 1992 CAP reform and green £ devaluations.

In Scotland, where 86% of the land is designated less favoured, both the Scottish NFU and the Scottish Crofters Union were disappointed by the Budget.

SNFU hill farming convenor John Scott said the HLCA cut in real terms was incompatible with the governments claims to be supporting hill farms and crofts in economically fragile areas.

Alistair Davy, spokesman for the Hill Farming Initiative, added that the HLCA standstill could bring 70% of the 60,000 traditional hill farmers in England and Wales to the brink of bankruptcy.

The funding of the Countryside Stewardship scheme also infuriated many. Mr Hogg announced that an extra £10m would be given to the scheme over the next two years, in line with the Rural White Paper commitment to find extra money to allow the scheme to expand.

But the CLA and the Wildlife Trust both said the funding was insufficient. Nicholas Milton, agricultural campaigns officer with the Wildlife Trust, condemned the governments failure to invest an extra £100m in the scheme as a betrayal of the Rural White Paper.

The squeeze on public expenditure will force MAFF to cut its running costs by 12% over the next three years. Mr Hogg said that the savings would come from further efficiency gains, some job losses.

There will also be cuts in research and development and flood defence, but BSE research will be increased by £1m.

Further cost-cutting will come from the withdrawal of some marketing and other grants.

MAFF has also decided to withdraw from the EC Surplus Food Scheme.

The UK will also pull out of the EC Processing and Marketing Grants Scheme, but Mr Hogg stressed that Objective 5b grants would be unaffected, as would MAFFs own market taskforce initiative.

The minister caused uproar by his decision to end the discount milk scheme for secondary schools and school catering. This will save MAFF £4m, but the move was slammed by the NFU and the Dairy Industry Federation.