Margaret Beckett has announced a change to the basis on which the new single payment, which farmers in England will receive from next year under Common Agricultural Policy (CAP) reforms, will be calculated.

Government Response: Department for Environment, Food and Rural Affairs

Margaret Beckett, secretary of state said: "On February 12 I announced the basis upon which the new single payment will be calculated in England once the scheme comes into operation next year.

"As part of those arrangements, I said that England would be divided into two regions, namely the Severely Disadvantaged Areas of the Less Favoured Areas (SDA) and land outside the SDA.

"Since that announcement, I have been approached by a number of key representative interests who have argued that the original proposal did not adequately reflect the extent of the different land types in England.

"They have requested a further division of land in England that would identify moorland within the SDA as a separate region. They argued that this would more closely reflect land conditions and productive capacity and, therefore, current subsidy payments.

"I have given careful consideration to those representations and to others which have argued for alternative solutions. However the further refinement of a Moorland line within the SDA was ultimately the proposal of all the main representative bodies.

"One of the purposes of setting the regional boundaries as proposed was to provide some limitation on the redistributive effects of the move to the new flat rate single payment.

"I accept that the boundaries as announced might have resulted in redistribution of subsidy away from more productive SDA land to less productive moorland. I have therefore decided to amend the regional boundaries as announced on 12 February.

"The regions in England will now comprise the moorland within the upland SDA; the rest of the upland SDA; and all land outside the upland SDA.

"The upland SDA comprises all the areas classified in accordance with Article 3(4) of Directive 75/268/EEC. It does not include the Isles of Scilly which were classified as a less favoured area in accordance with Article 3(5) of that Directive.

"In selecting moorland in the SDA as one of the regions, I am aware that it is possible that there may be some minor inaccuracies in the location of the boundary at certain points.

"I am therefore considering whether and what practical arrangements can be made for consideration of representations on this issue as part of the arrangements for the introduction of the new scheme. I will make a further statement on this at an early date.

"I recognise that this decision to amend the regional boundaries may come as a disappointment to some. Although there will be farmers in the SDA who will gain from this decision, some others, particularly
those within the moorland line, will see payments at a lower level than would have been the case under the original announcement, and in some cases less than their coupled historic receipts.

"We will need to see that hill farming communities receive appropriate support from other sources, including the England Rural Development Programme. The Hill Farm Allowance Scheme will continue to operate for the remainder of the current England Rural Development Programme (up to the end of 2006).

"In addition, I want to ensure that farms in the uplands have a full opportunity to be rewarded for improved environmental management of their land, including through agri-environment schemes.

"I have therefore asked my officials to consider how the next round of rural development programming (from 2007 onwards), can better reflect the needs of upland communities, and the public interest in good management of some of our best-loved landscapes."

Forum Response: Country Land and Business Association

Mark Hudson, president of the CLA said: "Mrs Beckett is right to subdivide the Severely Disadvantaged Areas (SDA) into the Moorland and the rest of the SDA to create three regions for England.  It would have been deeply damaging to the economy and environment of the uplands of England to have stuck to the decision to offer the same regional average payment across the whole SDA region.

"This would have simply taken money from beef and dairy farmers in the SDA and given it to sheep farmers for no defined policy reason and to the detriment of mixed farming in the uplands. We are relieved that Mrs Beckett has finally listened to the wide coalition of industry organisations which the CLA brought together last month.

"There is no unique discoverable way of doing this.  To which regions should the animal's money go?

"Even the wisdom of Solomon cannot say how payments should be allocated on a farm on which the animals graze the Moorlands in summer, are housed in the buildings in the uplands in winter, and eat the hay made on the lowland pastures.

"This gives DEFRA some scope to make the allocation in such a way as to ensure fairness between producers of the same products in the different regions. The CLA is already working with partner organisations to address these practical issues."

Forum Response: National Farmers Union

Tim Bennett NFU president said: "Although this is the decision the NFU lobbied the Secretary of State for, we continue to be concerned for beef and dairy producers in the SDA. The NFU is absolutely determined to find other ways of helping these farmers.