Farmers given'breathing space'with aid package

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Britain's farmers were given an aid package worth more than £200m yesterday and promised a raft of measures to take farming in a new and profitable direction.

The Prime Minister, Tony Blair, announced the deal after a summit on the farming crisis was held in Downing Street with farmers' leaders and senior figures from the food and retail industries.

Mr Blair told the National Farmers' Union President Ben Gill that he recognised the deal "would not solve all your problems", but it would answer some of farmers' most urgent concerns. Welcoming the aid package, Mr Gill said although it could in no way make up for the £3bn loss of revenues farmers had suffered in their current economic troubles, it provided "a breathing space".

The deal is worth £203.5m over the coming financial year, which Agriculture Minister Nick Brown said was new money from the Treasury reserve. Its immediate cash element, worth £152m, is directed at the livestock sector, which has been the hardest hit.

The most troubled group of all, pig farmers, who are together thought to be losing £4m a week, are to be offered a three-year restructuring package worth £26m in the next 12 months. This will help with the costs of moving out of the industry, although it will be for measures such as converting buildings rather than direct redundancy payments. About 1,500 pig farmers, more than a quarter of the total, have left the business over the last year.

Dairy, beef and sheep farmers, hit by the BSE crisis and plunging prices for milk and lamb, are also promised immediate cash. Each group is to be offered £22m of "agrimonetary" aid (nominally EU payments that compensate for the high pound, but in practice mostly paid by the Treasury) over the next 12 months, and another £60m is to be made available to hill farmers.

The Government will also seek EU permission to increase the maximum weight per animal on which compensation is paid when cows are slaughtered through BSE precautions, worth about another £20 to cattle farmers.

A series of initiatives to help farmers move in new directions is also on offer. They include stress on the value of horses for leisure in the countryside, with rate relief on livery stables and riding schools, a £2.3m European centre for organic fruit and vegetable seeds, and a further spread of the mobile phone network into the countryside "while keeping environmental intrusion to a minimum".

And in a bonfire of regulations, the Government is cutting back on much of the red tape that farmers say is burdensome, in particular making it easier for them to comply with new and complex Brussels regulations on nitrate pollution, waste, groundwater and integrated pollution control.

Notably, the Government has promised a high-profile review of the main BSE controls, including the slaughtering of all cattle over 30 months old, to see if the measures are "proportionate to the assessed risk". It will take place after the report of the BSE enquiry in the autumn and will be carried out by the Government's Chief Scientific Adviser, Sir Robert May, Chief Medical Officer Professor Liam Donaldson and Chairman of the Food Standards Agency, Sir John Krebs.

Mr Gill said he was happy with the package because it showed the Government recognised the role of agriculture. "Farmers had begun to wonder if there was any role for them at all," he said.