12 September 1997

Country faces town in competition for share of the funds

RURAL financial aid will face increased competition from urban projects under proposals to merge EU structural funds, farming organisations warn.

Both the NFU and CLA are upset that the government is not doing enough to support the EUs objective 5b grant scheme covering declining rural areas. And they fear EU plans to place the scheme in a new urban-dominated structural fund (objective 2) under the Agenda 2000 plans for CAP reform will further undermine spending in rural areas.

If adopted, funding for dry- stone walling, agricultural co-operative marketing schemes and other farming projects are likely to be hit substantially.

The NFU claimed MAFF has spent only a fraction of the £140m allocated under the 5b scheme for the 1994-99 period. "Although we are half-way through the programme, just £5m has so far been committed, which is really pathetic. There are big problems looming ahead and money available for rural areas is simply not being spent," said a spokesman.

Tony Bailey, CLA senior policy adviser, said that while rural areas constituted 80% of the area of the EU, they were becoming increasingly under-represented in terms of political power.

"There is a significant risk that rural areas will be competing with other areas undergoing economic change – it will become an urban versus rural competition for resources.

"The agricultural commission has lost an important battle, and needs to be encouraged to recover the lost ground," he added.n