18 July 2000
Chancellor increases farm budget

By Johann Tasker

THE government has announced a surprise 6% increase in the annual agriculture budget as part of its Comprehensive Spending Review.

Chancellor Gordon Brown told the House of Commons that the aggregate farm budget will increase from 1 billion a year to 1.35bn by 2004.

The figure includes the budget for the intervention board and is equivalent to an average annual real-terms increase of 6%, he told MPs on Tuesday (18 July).

The money is designed to help farmers restructure and meet the challenge of moving from production subsidies to environmental payments, said Mr Brown.

It is in contrast to the Labour governments first spending review in 1998, which slashed 135m from the Ministry of Agriculture (MAFF) budget.

This time round, MAFF officials said they expected little or no money to come out of the spending review which sets targets for the next three years.

However, a Whitehall statement said farmers and traders would benefit from a reduction in red tape and a more efficient processing of subsidy payments.

The Comprehensive Spending Review also contains government plans for 95% of farmers to make their subsidy claims over the Internet by 2004.

“Over time, there will be significant savings for taxpayers, with a 10% cut by March 2004 in unit costs of administering payments,” said the statement.

It added: “The overall aim of these changes is to ensure that MAFF provides a streamlined, modern service to all its customers.”

The move towards using the Internet for subsidy claims has been opposed by the Public and Commercial Services Union, which represents MAFF employees.

Using the Internet could result in thousands of job losses and the closure of MAFF regional offices which would isolate farmers, claims the union.

But the Whitehall statement said MAFF wanted to use the new technology while maintaining its links with farmers through a strong presence on the ground.