Oral - Rural Development Plan Wales 2007 - 2013

The purpose of my statement is to inform the National Assembly as to the latest position on the rural development plan for Wales for 2007 to 2013. I am pleased to say that the plan was approved by the European Commission in Brussels this morning. The fact that the plan has been approved means that the Welsh Assembly Government has secured £195 million of European money to support an overall spend of £795 million that will be invested in the farming and forestry sectors and our rural communities through to 2013.

Over the past six months, there have been intensive and difficult discussions as the commission examined the detail set out in the plan. Members will need to appreciate that the requirements set by the commission as to the structure and content of the plan resulted in a document that ran to some 800 pages. The negotiating process covered the totality of the submitted document. The fact that the commission has approved the scheme means that the Assembly Government can now further advance actions to deliver activities under the plan.

The plan itself has four major themes or axes. Axis 1 aims to improve the competitive position of our agricultural and forestry sectors. Here, we will provide a new farm advisory service and a refined farming connect scheme, both of which are specifically geared to providing relevant and specific advice that will include help in terms of meeting EU standards as well as assistance aimed at developing and sustaining individual businesses, whether they are agricultural businesses or forestry businesses. Taken together, the processing and marketing grant scheme and the supply chain efficiency initiative will further build on what has already been achieved in relation to adding value to Welsh farm produce.

Under axis 2, we will be delivering the expansion of agri-environment activities under the Tir Gofal, Tir Cynnal and organic schemes, as well as maintaining support to develop woodlands through the better woodlands for Wales scheme. The support scheme for the less favoured area, Tir Mynydd, has proved to be a particularly difficult aspect of the negotiation process. The Tir Mynydd budget for 2007 was set at £24 million and this amount was released last March. For the scheme years from 2008, the plan had proposed an annual spend consistent with that which was voted for in Plenary in March 2007: that is, £29 million in 2008 and £25 million for each year thereafter.

Following negotiation on the spending profile of Tir Mynydd and its conditions, the commission has agreed, from 2008 onwards, a baseline of £25.5 million as the amount that can be paid through Tir Mynydd under the current scheme conditions. For the 2008 scheme only, the commission has permitted the introduction of a grazing enhancement payable to farmers who have a mix of cattle and sheep within specified limits for livestock densities. It is estimated that some 4,300 farmers will be eligible to receive the enhancement, which means that the overall cost of the scheme in 2008 will be £29 million.

Not all in the less favoured area will be eligible for the mixed grazing enhancement. The outcome reached was the best that could be negotiated with the commission and ensures that the scheme can be provided in 2008 for the £29 million initially proposed when the plan was submitted. Earlier this afternoon, I met the farming unions and opposition spokespeople on agriculture to explain the position. The Tir Mynydd payments under the £25.5 million baseline will be released from early March onwards, with the enhancement payments being made available from late April onwards.

Under axis 3, the measure to assist the diversification of the rural economy and improve the quality of life in rural areas, and axis 4, LEADER, a lot of work has already been done by local partnerships to develop business plans to support action at a local level. Plans have been received from 18 partnerships from every corner of Wales. The assessment process is under way and I would expect to be in a position to announce the outcome in May.

The approval of the plan provides a solid platform to take forward an overall investment of £795 million through to 2013 that will sustain the economic, social, environmental and cultural fabric of our rural communities as part of the Welsh Assembly Government’s broader commitment to long-term prosperity for the whole of Wales.