Press Release - Department for Environment, Food and Rural
Affairs: Helping farm businesses in England
16 September 2004
Sir John Bourn, head of the National Audit Office, reported
today on programmes run by the Department for Environment, Food and
Rural Affairs (Defra) to help English farm businesses adapt to
changing markets and reforms to the Common Agricultural Policy
(CAP). Farmers in the United Kingdom currently receive nearly £3
billion a year in subsidies under the CAP, but the substantial CAP
reforms agreed to in June 2003 will necessitate major changes to
the way support is delivered in the future.
Defra is keen for farm businesses to be seen as part of the
economic mainstream and to provide them with the support necessary
for a successful transition. The transition to a more open and
competitive market, combined with new environmental requirements,
will be difficult for some farmers, particularly the roughly 90,000
individuals and families operating small- and medium-sized farm
businesses. Defra has a range of measures in place including the
provision of advice, capital grants, and where appropriate,
regulation. It also operates four specific schemes to help farmers
become more business-like, three of which are co-funded by the
European Union. Some £250 million has been allocated to the four
schemes between 2000 and 2006, but independent evaluations suggest
a number of problems with them. Take-up and awareness levels are
variable and application procedures are perceived to be complex and
costly. Defra has initiatives under way to address these concerns
and has taken steps to improve the administration and accessibility
of its existing schemes.
The emphasis on capital grants schemes in England – which
comprise 80 per cent of the funds available from Defra – differs
from assistance in other countries. The National Audit Office, with
the help of experts in each country, looked at farm business
development schemes in Ireland, France, Germany, Denmark, Sweden,
New Zealand and Wales and found much greater emphasis on providing
advice and training to help farmers develop business opportunities
and re-connect with the market.
Based on the good practices examined in these countries, the NAO
report makes a number of specific recommendations as to how Defra
should adapt its programmes. These include: increasing the
proportion of funds spent on advice to farmers; making it easier
for farmers to apply for support; merging farm business development
schemes so that they can be accessed as a single package; widening
the support available to farm businesses by making them eligible
for existing loan-guarantee schemes available to other businesses;
encouraging the use of local partnerships to join up
agri-environmental initiatives with farm business development;
giving farmers and others in the local community a greater say in
how support is delivered; and shifting some support away from
individual farms to support wider local initiatives to promote
demand.
Sir John Bourn said today:
"Farming remains an important business in the UK,
employing some 530,000 people and generating over £8 billion a year
in income. Many farm businesses face an uncertain future, and
Defra’s efforts to find innovative ways to help them adapt to new
realities should be encouraged. My report considers good practice
emerging in other countries, and makes recommendations as to how
the Department can use this experience to improve its efforts to
help farmers adapt to the commercial marketplace."
Notes for Editors:
- Small and medium sized farm businesses are defined as those
between 8 and 100 European size units. These units measure the
financial potential of a holding in terms of the margins which
might be expected from crops and stock. The threshold of eight
units is judged to be the minimum for a full-time holding.
- The four schemes run by the Department to help farm businesses
develop are the Rural Enterprise Scheme, Processing and Marketing
Grants, the Vocational Training Scheme – all 50 per cent funded by
the European Union – and the Farm Business Advice Service.
- Under European Union rules, all Member States had to commission
an independent "Mid Term Evaluation" of their Rural Development
Programmes during 2003. For the Department for Environment, Food
and Rural Affairs, this work was carried out by ADAS and SQW
consultants: "The Mid Term Evaluation of the England Rural
Development Programme". The Department commissioned a review of the
Farm Business Advice Service from the Rural Business Unit,
University of Cambridge during 2003.
- The NAO commissioned Dr. Janet Dwyer, of the Countryside and
Community Research Unit, University of Gloucestershire, and David
Baldock, of the Institute for European Environmental Policy, to
review the experiences of other countries in helping farm
businesses. The review looked principally at Denmark, France,
Germany, Ireland, New Zealand and Sweden.
- Press notices and reports are available from the date of
publication on the NAO website at www.nao.org.uk
Hard copies can be obtained from The Stationery Office on 0845 702
3474.
- The Comptroller and Auditor General, Sir John Bourn, is the
head of the National Audit Office which employs some 800 staff. He
and the NAO are totally independent of Government. He certifies the
accounts of all Government departments and a wide range of other
public sector bodies; and he has statutory authority to report to
Parliament on the economy, efficiency and effectiveness with which
departments and other bodies have used their resources.
Press Notice 56/04
All enquiries to Bill Schaper, NAO Press Office:
Tel: 020 7798 7335
Mobile: 07795 120838