19 July 2002

EXTRACASH WELCOMEBUTHOWANDWHEREWILLDEFRASPENDIT?

More questions than answers. It would be mean-spirited not to acknowledge the £93bn public spending programme Chancellor Gordon Brown delivered this week in the governments comprehensive spending review. But it raises more serious questions about the future of British farming than it answers.

Everyone will benefit from the boost to public services particularly education, transport and health care, not least those in rural communities who have seen local services ebb away after years of neglect.

But what the Chancellors spending plans will mean for UK farming is difficult to fathom. Early indications suggest the rural affairs budget will benefit from a £421m increase paid over three years. Some of the money will be used to implement the core recommendations made by Sir Donald Currys Commission on the Future of Farming.

At the heart of its plans is modulation – an idea considered and apparently abandoned by almost every other EU country. At first sight, modulation, or the transfer of rural subsidies from food production to environmental and other schemes, seems sensible. In reality, it threatens to impose massive bureaucracy and to cripple UK farmers at a time when they are being asked to take on the best of world competition. Even a 10% switch from production to environmental support could cut already rock-bottom farm incomes by more than 20%, according to recent research by the Royal Institution of Chartered Surveyors. And when farming suffers so does the rest of the rural economy.

How precisely will DEFRAs extra money be spent? Strengthening flood defences will swallow some, but how much money will reach farmers pockets? And to what extent are Sir Donalds proposals compatible with the EU Commissions plans to reform the CAP? Until those questions are answered, farmers can have little confidence that their future will be anymore secure after the Chancellors statement than before it.