11 July 2000
Spending review to overlook farmers

By FWi staff

FARMERS are unlikely to receive any money from the governments Comprehensive Spending Review, the Ministry of Agriculture has warned.

The review, which will set out the governments spending plans for the next three years, is expected to be announced next Tuesday (18 July).

But agriculture is not top of the agenda, despite forecasts that there will be about 40bn of extra money available to the government by the third year.

According to some reports, Chancellor Gordon Brown will announce billions of extra spending on the National Health Service, education and transport.

A Ministry of Agriculture senior spokesman confirmed: Analysis of conversations suggests we are not going to be one of the lucky departments.

He told Farmers Weekly: We have been told to expect to have to run on a very, very tight budget indeed.

The revelation came as the National Farmers Union warned that the governments spending plans threaten to cost producers 150m.

Union leaders helped launch a report sponsored by the NFU and other groups representing about a fifth of the UK economy in London on Tuesday (11 July).

The study, called Re-balancing the Economy – An Alternative Approach to Economic Policy, was prepared by consultants Oxford Economic Forecasting.

It says that the effect of the governments last Budget has been to increase interest rates, exacerbating the strength of the pound.

For farming, this has been the biggest factor in wiping 4 billion – or 20% – off the value of farm outputs over the past four years, says the document.

NFU President Ben Gill said the government could modify its policy to help farmers and other sectors without damaging economic growth and low inflation.

“Farmers have been hammered by the over-valuation of sterling in the last few years and current Government policy is making the situation worse.

NFU analysts believe ministers could prevent inflation and create an economic climate in which the entire economy, including farming, could flourish.

The report urges ministers to refrain from a pre-election spending spree and ensure any increase in expenditure is on investment rather than current spending.

The last Comprehensive Spending Review, in July 1998, wiped 135million off the MAFF budget over three years, equivalent to an 11.5% cutback.