Gildernew proposes additional funds for Less Favoured Areas scheme

Agriculture Minister Michelle Gildernew MP, MLA has updated the Agriculture and Rural Development Committee at the Assembly on a range of issues.

The Minister began her address to the Committee by outlining details of a proposal to pay an additional £6million of funds to farmers in Less Favoured Areas (LFA). Under the Less Favoured Areas Compensatory Allowances Scheme (LFACA), farmers in LFAs are paid in recognition of the difficulties they face in farming. The scheme, which is funded under the Rural Development Programme 2007-2013 (NIRDP), provides a budget of around £22million per annum for area based payments to approximately 13,500 recipients.

Announcing the additional funding, the Minister said: “In the coming months we will pay £3.3million to LFA farmers as arrears in respect of the current and previous years. These payments arise because of the movement in exchange rates from when we set the rates in the Rural Development Programme. This represents a very substantial boost for farmers who have to cope with the difficulties and disadvantages of farming on the hills. Farmers do not need to apply for these arrears as they will be paid automatically.”

The Minister also focused on the 2009 claims, which are due for payment in early 2010, saying: “For 2009 claims I want to strike a balance between capturing the benefits of exchange rates movements, which are currently working in our favour, but without exposing hill farming to unnecessary risks arising from future exchange rate volatility.”

She continued: “Farmers in LFAs face long term disadvantages and I don’t believe it would serve them well to have an LFA payment that rises and falls in line with an exchange rate on a single day of any given year. We have to find a sustainable level of payments that is affordable and which gives the sector some certainty. I also have to bear in mind that we are in the middle of a consultation on the future of LFA support, and I don’t want to take short term, opportunist decisions which change the shape of the current scheme before we know the shape of the new one. Again, it’s all about creating stability and charting a clear way forward.

“I propose to increase the rate for farmers in disadvantaged areas to whichever is the greater of the sterling equivalent of €25 or £22. For the 2009 claim year, that will result in a payment of £23.81 per hectare. To maintain the differential for severely disadvantaged areas, I propose a fixed rate for 2009 and any subsequent claim years of £44 per hectare.”

The effect of the Minister’s proposals for the 2009 claim year would be an overall increase in expenditure of £2.65million. The Minister also said that she would be consulting both the ARD Committee and the Monitoring Committee for the RDP, before putting a formal request for a modification to the European Commission.

The Minister also added that she would continue to look for opportunities to maximise the current exchange rate gain, explaining: “In addition to the LFA, it is important to keep looking for opportunities right across the Rural Development Programme to maximise any gain because of the current euro exchange rate, but we have to be mindful that rates can go down as well as up. My officials are currently examining what scope there is to increase the expenditure on existing schemes or develop schemes that could benefit from the gain and which could be added to the Programme after the necessary consultation has taken place.”

An update on the Farm Modernisation Programme was also provided by the Minister. She said: “My officials have been working intensively to try and reach an agreed position with the Commission which would allay their concerns about the selection process used under the scheme and which would allow Tranche 1 of the scheme to continue as planned.

“I remain optimistic that Tranche 1 of the scheme can proceed and I hope to be able to make an announcement on the way forward in the coming days.”

Moving to the resolution of the contaminated animal feed issue, the Minister discussed details of the progress so far on the voluntary cull, rendering and disposal of the effected cattle.

She said: “All the affected herd owners agreed to participate in the cull. Approximately 4,300 animals were entered into the scheme and 2,500 animals have been culled to date. The cull commenced on 21 March and we anticipate that this will be completed by 9 April. Hardship Assistance payments will be issued during April.”

During her statement to the ARD Committee the Minister also raised a number of other important issues, including the recent NIAO report into the control of Bovine TB and the subsequent Public Accounts Committee hearing. She informed members that the 11 affected farmers in the Wind Energy for Rural Businesses project have now received an ex-gratia payment.

Progress to date on the payment of DARD’s allocation under the Executive’s economic hardship package was also dealt with by the Minister. Hardship funds totalling £500,000 to farmers affected by flooding last summer are now complete and the provision of financial assistance for the fishing industry during the current economic downturn is underway.

Notes to Editors:

1. A consultation on future options for support arrangements for Less Favoured Areas (LFAs) was announced by the Minister on 5 March 2009 and is currently seeking the public’s views. The closing date is 29 May 2009 and details are available online at: http://www.dardni.gov.uk/index/consultations/active-consultations/consultations-lfa-review.htm
2. All media queries to DARD Press Office on 028 9052 4619. Out of hours, please contact the Duty Press Office via pager number 07699 715 440 and your call will be returned.