DAVID RICHARDSON
DAVID RICHARDSON
DEFRAs rate relief
proposals to encourage
diversification might
prove to be as big a
fiasco as the
Countryside
Stewardship Scheme
I honestly cannot think of anyone among my farming friends who has not expanded, diversified or both. Almost every farmer in Britain has been acutely aware of the need to enhance his or her income for the past five years, if not longer.
In fact, MAFF statistics have referred to non-farming income in comparison to "income from farming" for years in justification for allowing straight farming profits to decline.
So, pundits who lecture farmers on the need to make those same changes, as if they were new ideas, are either out of touch or deliberately insulting our industry. Moreover, there are probably far more farmers legitimately wondering whether to give up the unequal struggle of farming which, in the present economic climate, amounts to subsidising consumers, than are, or should be, contemplating more diversification. For most of those with the resources – both physical and financial – appropriate to diversification are already doing it. And splitting management expertise too many ways can be counter-productive.
But DEFRA and others have shown their lack of understanding and/or imagination by once again giving tired advice as if it were the newly discovered Holy Grail. Furthermore, they have compounded their ineptitude by trotting out yet another solution first put forward many months ago. They have proposed, to encourage new diversification among farmers, that new enterprises should qualify for business rate relief. Not for all of it, as originally proposed, but just 50% for five years. Meanwhile, if local authorities choose to be generous they will be able to exempt the other 50%.
Given the financial constraints under which most local authorities work, and the perceived lack of importance of farming in the economy, it would be unwise to hold your breath anticipating further relief from most councils.
But by far the worst aspect of the proposal is the discriminatory way in which it is planned to be applied. For farmers who showed initiative before the current crisis in agriculture (not just F&M) are to get no such relief.
If they pay business rates now they will be required to continue to do so. Indeed, there are rumours in some parts of the country that rating officers are about to get tougher on farm premises used for other purposes, but not yet rated, because they regard them as an untapped source of revenue.
So, very soon, presumably, we shall have farmers attempting to produce diversified goods or services from farm premises, some of which may be fully rated, some of which may be benefiting from a 50% relief, and some of which may be paying no rates at all. The unfairness in that situation is plain to see. And given that most activities that can be adapted to farms are small niches, it is obvious, if some are given preferential treatment to set up and develop, while others pay full rates, there will be casualties.
I cannot believe that this is the intention of the proposed legislation. It is just that nobody has thought through the implications. Quite likely too, that cash limitation is so severe that there is insufficient available to do the job sensibly or properly. It is, in other words, yet another example of the penny pinching attitude of DEFRA to farming. They would deny this, of course, and point to the vast amounts of cash being spent on F&M.
To which I would retort that the epidemic, its origins and management are the governments own responsibility and have little to do with UK farmers except they and their livestock are the chief victims.
The rate relief injustice is not the first of its kind. A few years ago there was a similar anomaly over funds for Countryside Stewardship. Like rate relief, it was a cash limited scheme. Like rate relief it was something to which the government paid lip service. But it ended up causing more damage to the countryside than if it had never been introduced. May I remind you that at one stage there were twice as many farmers applying for a Countryside Stewardship Scheme as were being granted them. The reason – there was not enough money in the kitty.
Worse still, it was the farmers who had already taken measures to improve the conservation on their farms who were being rejected "because government money must be spent on providing the most public good". So what happened? To my certain knowledge some farmers ripped out conservation features already established to qualify for the scheme, thereby depleting the environment and delaying any conservation enhancement until after their new scheme had matured.
Fortunately, the MAFF people in charge at the time saw the error of their ways and after a few unsatisfactory years funded the initiative more fully to the advantage of both farmers and the environment. My fear is that this rate relief proposal could turn into an even bigger fiasco than Countryside Stewardship. It should not be too late to correct this error and to enable all UK farmers to compete on a level playing field, at least here at home.
By far the worst
aspect of the proposal is the discriminatory way in which it is planned to be
applied