Speaking to farmers in Leicestershire, Sir James said more money, not less, should be directed at agri-environment schemes. He added “I also think – and this is going to be a very contentious remark if it ever gets to DEFRA’s ears – that we are going to have to think about the funding.” He was not in any doubt that his successor would hear of his views!
He points out that ELS was developed when grain prices were £70-80/t. Farmers were happy to sign up on a no-cost or income foregone basis. But it is costing “serious sums of money” to leave land unproductive when grain is fetching more than £200/t, Sir Jim warned.
“We have to face the reality – otherwise the government and Natural England will have to explain why the number of farmers in ELS is going down unless they face up to that challenge.”
As Defra pointed out in response to Sir Jim's speech, “One option we’re exploring is transferring an ELS-type scheme into Pillar 1."
This would actually release a greater proportion of pillar 2 funds for higher level agri-environment measures, and for a more balanced approach to rural development.
It would not actually be possible for a higher proportion of available funds to be devoted to agri-environment schemes in England under current rules. Defra opted to devote the maximum proportion, 80%, of rural development funds to 'axis 2' measure, ie agri-environment schemes.
A Defra spokesman continued “We are also continuing to push for an increase in the proportion of CAP funds allocated to rural development where they can be used for public benefits and to promote growth.”
However, it is clear from other proposals, including European Council Herman Van Rompuy's budget proposals (see 'budget' section on this website), that the proportion of CAP funds in pillar 2 and available for rural development is likely to go down rather than to increase.
Eurinco has long made the case to Defra for a more integrated approach to delivery of rural development in England.
At present, Natural England is responsible for delivery of axis II schemes (agri-environment) which make up the vast bulk of the total, and also for energy crops scheme (ECS) - techically axis I. Forestry Commission also has a role in delivering axis II schemes.
The former Regional Development Agencies were responsible for axis I and III schemes until their abolition, when their teams were taken into Defra.
RDAs were also responsible for setting up LEADER local development action groups (sometimes referred to as axis IV), who were supposed to have some discretion as to the use of funds in their areas in line with their approved strategies.
Eurinco has suggested in response to earlier consultations that it would be more cost-effective, and also in line with the UK government's definition of 'sustainable development', which includes an approach which 'integrates the importance of a healthy natural environment
to our prosperity and quality of life'. At present, Defra delivery policy separates shemes with primarily environmental benefit from those with primarily socio-economic benefits.
For instance, no axis II funds have been made available for Leader schemes in the current round.
In future, post 2014 rural development policy is likely to be based on six or possibly seven broad objectives, rather than on three 'axes' as at present. This may offer opportunities for a more integrated approach in the future.