Struggling farmers get pounds 120m in aid

THE GOVERNMENT threw a pounds 120m lifeline to Britain's farmers, yesterday, with a pledge to protect rural communities from the worst recession in agriculture since the Second World War.

Nick Brown, the Secretary of State for Agriculture, said that the emergency aid package would offer extra compensation to livestock farmers hit by the beef ban and poor weather this summer.

In a long-awaited statement to the House of Commons, Mr Brown announced that pounds 48.3m in extra compensation would be given to beef farmers hit by the collapse in trade following the BSE crisis. A further pounds 60mwould be spent on increasing compensation to hard-pressed hill farmers, while the Calf Processing Aid Scheme, which helps farmers kill their calves to prevent a glut on the beef market, will be extended at a cost of over pounds 10m.

More than a third of the package will be funded by the European Union, with the rest coming from Treasury reserves.

Mr Brown told MPs that all farming sectors, but particularly the livestock sector, had been hit by the collapse in European, Russian and Asian markets. In recognition of these "extremely difficult circumstances", Chancellor Gordon Brown and Treasury Chief Secretary Stephen Byers had take the exceptional decision to allow access to the reserve. The package, which comes on top of pounds 150m worth of assistance already announced by the Government, follows months of protests by farmers.

Mr Brown said that his next task was to persuade the EU to lift the export ban on British beef. He would spend the rest of this week talking to his counterparts across Europe to prepare for a decision by the Council of Ministers at a meeting on the topic next week.

The Tories' Agriculture spokesman, Tim Yeo, welcomed the announcement, claiming it was in line with his party's demands.for assistance.

But the the measures were "necessary palliatives" and treated the symptoms rather than the causes of the problems, he said. "The reason this second farm rescue package in a year is needed, is because of the downturn in farm incomes, like the downturn in the whole economy, was made in Downing Street," he added.

Mr Yeo claimed that farm incomes had dropped by pounds 2bn and that the new package would be worth less than pounds 2,000 to each of the 60,000 UK farms in less favoured areas.

The National Farmers' Union gave the package a warm welcome and praised Mr Brown for gaining Government assistance at a time of tight budgets. Ben Gill, the NFU president, said the money would provide a "much needed injection" . But he added: "This package itself cannot cure all the ills of farmers, particularly for instance, in the pig sector. We need continued Government and Bank of England action to put downward pressure on interest rates and sterling, particularly against EU currencies."