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Oral - Wales Rural Development Plan: Axis 2 Review

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Elin Jones, Minister for Rural Affairs

In line with the commitment in ‘One Wales’, last September I issued a consultation on the land management measures provided under axis 2 of the Wales rural development plan. These measures cover Tir Gofal, Tir Cynnal, Tir Mynydd, and the organic farming and better woodlands schemes.

 

The consultation paper set out the challenges and opportunities that climate change, carbon capture, water management and biodiversity present for farming, with a number of options proposed on how support under axis 2 might be redirected to address them.

 

Ninety-two formal responses were received, as well as the report by the Rural Development Sub-Committee, and a debate was held in Plenary. These have all been analysed carefully. In assessing the options, I have also had regard to the Welsh Assembly Government’s sustainable development and environment strategies. Following careful consideration, I have decided to introduce a new scheme to be called ‘Glastir’. It will have two elements: the first will be open to all farmers in Wales, and the second will be targeted at those areas that can deliver the environmental outcomes that are most important to Wales. 

 

Having listened to concerns that any change must be accompanied by sufficient time for farmers to plan ahead, I have decided not to introduce the new scheme from 2010. Instead, it will be introduced from January 2012, with transitional arrangements in place until 2014.

 

The current schemes have been effective, but were designed in a different context. The land management scheme for the coming decade must respond to the challenges set out in the common agricultural policy health check agenda, agreed last November. These challenges—climate change, water management and biodiversity—will form the basis of land management schemes across Europe from 2014. Any scheme introduced today that did not tackle these challenges may well have needed to be changed within a few years, causing upheaval to the sector and significant administrative waste. A major change to the common agricultural policy single payment scheme is also anticipated in 2014 and it is important to avoid two major changes running concurrently.

 

I considered carefully whether the current schemes could be adapted to meet these future challenges. Tir Mynydd is a compensatory measure to recognise the additional costs and income foregone associated with farming in more marginal areas. Under the European Commission’s rules for compensatory payments, this cannot be enhanced to deliver on the health check challenges within the budget available. I have therefore decided that adapting current schemes is not a viable option to secure the long-term stability of the industry.

 

In developing a new scheme, I am acutely aware that it must support a sustainable agricultural industry, with the family farm at its centre. Spend forecasts for our land management schemes for 2012 and 2013 are £89 million per annum and this level of farm payments will be maintained under the new scheme.

 

While there will no longer be a dedicated measure for the less favoured area, there will be a 20 per cent premium for all LFA farmers entering the all-Wales element of Glastir. This will include all dairy farmers who are currently excluded from receiving LFA payments. This will be a flat rate payment, with no distinction between severely disadvantaged areas and disadvantaged areas. Although much work remains to be done on the new operational arrangements, initial projections suggest that the all-Wales element of the scheme will attract a base payment of some £28 per hectare, with a 20 per cent premium for farmers within the current LFA boundary raising the payment to £33.60 per hectare. Under the Tir Mynydd 2009 scheme, payments per hectare were £24 for the disadvantaged areas and £28 for the severely disadvantaged areas.

 

Glastir will provide an annual £5 million capital grant from 2012 for the installation of renewable energy and energy efficiency technologies on farms, together with additional targeted support for the provision of educational and permissive access. Within nitrate vulnerable zones, grant assistance will be provided for capital works that are undertaken to improve manure and slurry handling and mitigate diffuse pollution. The rest of the proposed catchment-sensitive farming scheme will now become part of the targeted element of Glastir.

 

The consultation invited views on providing support for energy crops in Wales. There was no overall conclusive view emerging from consultation. I have decided therefore that our current approach of refocusing axis 2 and the planned capital grant scheme is a better use of the resources available to address the priorities that underpin my announcement today. However, we will continue to work with supply chains for local power schemes supported by the Assembly Government.

 

My announcement today will provide the delivery of targeted environmental actions in support of the delivery of biodiversity, climate change and water outputs. It will also provide broad support for the environmental improvement of farms throughout Wales, with access for all farmers to the basic Glastir scheme, and it will rationalise the current suite of schemes into one straightforward process for farmers. As a consequence of my decision, with immediate effect, the Tir Gofal and Tir Cynnal schemes are closed to new entrants. Those farmers who have already had their first farm visit by 8 May or whose agreements are further advanced than this will have their applications processed. The last payment under Tir Mynydd will be in March 2011. I am still considering the integration of the organic scheme into Glastir and I will be making a further announcement in due course. For 2012 only, farmers who enter contracts to deliver under the Glastir scheme will be eligible for an advance payment that would be released in September, with the balance payment paid in December. Thereafter, scheme payments would be paid in December.

 

The delivery of the new land management arrangements are subject to agreement with the European Commission. A formal proposal will be submitted to the Commission next month with the aim of securing approval in the autumn. Although the exact timeline is not yet finalised, it is likely that the first application window for the new scheme will open in summer 2010, with contracts coming into force in January 2012.

 

In the meantime, I have instructed my officials to work closely with the farming and countryside interests to deliver the operational detail for effective delivery of the new arrangements in 2012, especially with regard to a reduction in bureaucracy and red tape.

 

Glastir marks a major change. Farmers produce food and manage the land and they do so for their own commercial benefit and for the good of wider society. Glastir will pay farmers to manage the land in a way that will meet many of society’s priorities today.