There is a well known saying, 'no pain, no gain' and that will be ringing true in the minds of Milk Link’s 1,600 producers, who are on the brink of reaping just reward for 12 years of loyalty and investment.The big challenges facing the next Government
THE election, whatever the outcome, is likely to herald a new Ministerial team at Defra. Alistair Driver outlines some of the big issues they will face as a new era dawns.
Budget constraints
THE single biggest challenge facing the next set of Ministers to enter Nobel House is likely to be how to deliver credible policy with a vastly reduced budget.
The full extent of the spending cuts and tax rises the new Government will be forced to implement has been portrayed as the three main parties’ ‘dirty secret’.
The figures are frightening. According to the Institute for Fiscal Studies (IFS), the Conservatives, would seek cuts of £64 billion a year by 2014/15, while Labour would need to make cuts of £51bn and the Liberal Democrats £47bn.
Some priority spending areas such as health, education and defence are protected. Defra’s budget is not. One economist has predicted unprotected departments could face cuts of 16 per cent.
Has anybody any bright ideas?
Pre-election, the Government outlined plans to cut £194m from the Defra budget by 2012/13 through measures like cutting back on consultants and efficiency savings in areas like IT and finance, particularly in its agencies.
The Conservatives put the emphasis on ‘cutting back on rural quangos’, while the Liberal Democrats would also look to clip the wings of Defra’s quangos.
But all this will only be scratching the surface, if the IFS is to believed. The true scale and details of the efficiency drive – whether in the form of staff cuts, down-sizing and axing quangos, cuts in the research, further cost sharing or removal of tax breaks –
will only emerge over time.
Headache rating – 10/10
Sorting out the RPA
FARM leaders believe the RPA is on the verge of another meltdown. When the 2005 SPS started to implode, Defra threw money at the problem.
The next Defra team will have the simple task of trying to drag the floundering RPA away from its current pit of despair while imposing further cuts on the agency’s budget, which has already been clipped significantly over the past few years.
Key aims included improving delivery of SPS payments in England and cutting the cost of processing, currently estimated at £1,740 per claim compared with £280 in Scotland.
This is against the backdrop of the knock-on effects of the mapping fiasco, increasingly disillusioned RPA staff, an outdated and cumbersome IT system and an erosion of industry confidence in the agency’s management.
Any bright ideas?
The Conservatives have promised ‘fundamental reform’ of the RPA and have said they would appoint the Agriculture Minister as chair of the management board to ensure greater accountability.
The Lib Dems would transfer non-SPS functions of RPA to Defra to enable greater focus on the scheme. They would also set a minimum payment of £300 to remove 11,000 claims to streamline the system.
The Government instigated a review of the RPA in September, which is still to be completed.
Headache rating – 9/10
Tackling Bovine TB
NO other issue, not even foot-and-mouth in 2001 and 2007, has defined the Government’s relationship with farmers over the past 13 years more than bovine TB (bTB).
When Hilary Benn stood up at the at this year’s NFU conference and reeled off a list of all the things he had done to help farmers, it sounded impressive.
But it was all quickly overshadowed by the angry exchanges on TB which followed.
It was ever thus. Coming up with a credible package of policies to tackle the disease in England could achieve even more than the prime aims of reducing the vast annual toll of animals needlessly slaughtered, the public money frittered away and the human suffering associated with it. It could also go along to restoring farmers’ trust in Government.
The imminent introduction of a badger cull in Wales will only intensify the focus on how the next Government handles the disease in England.
Any bright ideas?
The Conservatives made a manifesto commitment to culling badgers as part of a package of bTB measures, although the detail and timing are as yet unclear. The Lib Dems left the policy out of their manifesto, but have since insisted they would introduce a cull. The Labour Party has said it would stick to the policy of developing badger and cattle vaccines.
Headache rating – 8/10
CAP reform
DEFRA Ministers will be treading a fine line when it comes to negotiating the next round of CAP reform.
Whoever forms the next Government, their instinct will be to seek radical reform in the form of a reduced budget and a big shift from Pillar One (direct payments) to Pillar Two (rural development).
The UK Treasury will undoubtedly be keen to see Defra make the case for this sort of reform.
However, they will have to balance these desires against the wishes of much of the UK farm lobby to retain Single Payments and, perhaps more importantly, the wishes of most other member states to retain more of the status quo when it comes to reform.
The nightmare scenario for UK farmers, according to the NFU, is that Government isolates itself in the negotiations and ends up with a deal where member states are able to mould their own agricultural policies. British farmers are unlikely to be the winners should that happen.
Any bright ideas?
Pre-election, the Government said it would ‘press hard’ for reform, but would be ‘pragmatic’. The Tories want ‘free and fair’ world trade and a ‘gradual shift to Pillar Two, while the Lib Dems also want a shift over time, but would ‘fight to retain’ Pillar One payments.
Headache rating – 6/10
Fairness in the food chain
ALL parties have agreed to introduce a supermarket ombudsman to oversee the Grocery Supply Code of Practice.
A consultation on the details closed just before the election. It is just the detail which has to be resolved. Outstanding questions include whether the ombudsman should be a stand-alone department or a ‘ring-fenced part of another body, probably the Office of Fair Trading and the degree of anonymity complainants are given.
The farming industry will want Ministers to ensure the ombudsman has sufficient teeth to enable it to truly rein in supermarket abuses of power.
Any bright ideas?
The Tories would house the ombudsman within the OFT as this is consistent with their anti-quango drive. The Lib Dems have talked about extending the ombudsman’s powers to ensuring fair prices, something that goes well beyond the recommendations of the Competition Commission.
All parties have pledged to introduce fairer country of origin labelling. The Tories have also pledged to increase British sourcing among Government departments.
Headache rating – 5/10
Responsibility and Cost Sharing
IF budget constraints are anywhere near as bad as predicted, it is inevitable the next Government will increasingly look to pass more costs on to farmers.
A draft Animal Health Bill setting out plans for a new body for animal health in England awaits the next Government. But still very little is known about how cost-sharing would work.
This is partly because the Treasury wrestled control of the cost sharing side of the process before Defra published its draft Bill. The Treasury planned to publish a separate cost-sharing Bill after the election.
Any bright ideas?
The Tories and Lib Dems have signalled they accept the principles of responsibility and costsharing, but made no pre-election commitments to taking the Defra Bill forward. In Scotland and Wales, debate will continue over who controls the health budget. The industry fear, post-election, is that the cost-sharing debate will not be confined to animal health, but could be extended to other areas of farming policy. All parties know cost sharing will be the norm in future. However, if they have any grand plans as to how this will work, they have been keeping them close to their chests.
Headache rating – 6/10
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