David Miliband interview

Environment secretary David Miliband talked to the EDP about the latest £3.9bn Rural Development Programme. In a 35-minute interview with Rural Affairs editor Michael Pollitt, he explained the background to the announcement.

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He said that the new RDP for England was at the heart of the heart of the CAP reform strategy.

David Miliband: “This will get money away from paying for production and into the idea that we're paying farmers to do things for the public good and above all the environmental good.

“The NFUhave put out a press release. They have claimed credit for the amount of co-financing, which I think means that they're pleased about it. They can see the value of that. Their concern, of course, is that we drag the rest of Europe into this and that's what we're determined to do.”

With modulation, farmers will have money deducted while their competitors in Europe will not.

Q - How exactly does it help them to have money from their cheques now when their competitors elsewhere are not having it deducted yet?

DM: It is important to remember in the UK and elsewhere, there is no payment for production any more. The link between payment and production has gone under the new single payment system.

Secondly, remember, we are topping up. There is money coming out of one pocket and going into another pocket except it is a larger amount of money going into the second pocket because of the co-financing arrangements put in place.

“We've been using this voluntary modulation for several years now and during that time, industry, not least in East Anglia has actually been the most competitive and most sustainable in the EU.

“So, I think that our farmers win markets because of the quality of their product and I think that is the most important thing. We're agreed that we want to take distortions out of the agricultural market, partly through this process but also through the World Trade Organisation reforms.

EDP: East Anglia in 1984 and 1985 pioneered the whole concept of green and environmentally farming. Are new funding arrangements actually going to make it harder to actually deliver the new kind of environmental goods particularly if the funding isn't available there for the HLS (Higher Level Scheme)?

DM: “East Anglian farmers did some pioneering work. If you look at Natural England press release, then this deal will help secure funding for the HLS (Higher Level Scheme) and I welcome their confidence that the HLS is a scheme well worth having.

“I think the nature of this deal is £3.3bn going through the second Axis of the second pillar - almost a three-fold increase over the seven years to 2013.

“There is a real vote of confidence in the ability of farmers to make a big environmental contribution and big new funds which simply weren't there before. And, I hope that they will seize those opportunities.

EDP: If the funds are being directed to areas of much higher environmental value, such as SSSIs, the farmers next door or close to those SSSIs may not qualify for HLS because the funding is not available because it is a competitive scheme. And wildlife does not recognise farm boundaries.

DM: “You're raising an important point. £3.3bn is coming through the second Axis. There is a lot of money but there is a limit. However, we have broadened the envelope if you like of funding. Certainly, everyone who has applied for the ELS and the HLS up to now has got their money.

EDP: Many in the Norfolk Broads ESA and wider Norfolk ESAs would question, they have been doing major environmental projects to reverse the decline of farmland birds and flora and fauna and so on, but are they actually going to see those gains of 10 and 20 years actually lost because the funding is no longer available?

DM: “That would be a stronger criticism if I had come back to you with no more money. Actually, we're having a 40pc co-financing rate. That means that Defra, the government's budget is almost doubling the amount of money that is coming from the first pillar.

“I certainly don't pretend that money grows on trees or that there are no limits but equally I would say that this is a big vote of confidence in the ability of farmers to deliver in a big way and a commitment to put government money behind them.

EDP: The farmers would be the first to recognise that they're now paying 17pc - their payments are being diverted to modulation. So, they are actually paying for this. Some may well be paying but not actually benefiting because the ELS (Entry Level Scheme) payments are at a much lower rate.

EDP: The NFU's president Peter Kendall has asked for proper audited accounts every year on what these modulated funds have been spent on. Many are concerned that an awful of money is diverted into wonderful new initiatives of some questionable benefit.

DM: “I think the fact that 80pc is going into the Second Axis but the Second Axis is going to be focused on ELS and HLS, which are now increasingly established. In a way that runs across your previous answer. It is not that there are wacky new initiatives.

“We have got schemes that are of increasing credibility in rural England. It is obviously important that environmental stewardship budgets do deliver on the shared benefits that we're seeking out of agri-environement schemes. I have absolutely nothing to fear from full transparency in this area about how money is spent.

“I do want to do this in a non-bureaucratic way and I'm certainly keen to respond positively and will respond positively to the demand for transparency.

“We have absolutely nothing to hide. I want to make sure that this money doesn't just go to good causes but is seen to go to good causes.

And on progress on single farm payments -

DM: We have paid out a billion pounds of SFP money by the end of March compared with £200m last year shows a significant step forward.

“I have repeatedly said that I'm deeply sorry for the distress that has been caused by the difficulties last year and I'm never going to do anything other than say than we're doing our basic job in getting the money out in an efficient and effective way.

“We're working very hard and the leaders of the rural Payments Agency are working very hard and the staff as well to get the money paid effectively and efficiently. All we say is that we're doing significantly better than last year and we've got to keep on building on that.

And the critical question for the so-called average farmer.

“As long as the average farmer wants to be part of the environmental stewardship scheme, they will win. And the way this co-financial works, for every £6 that comes out of the first pillar is actually replaced by £10 in the second pillar. It is a big gain for the second Axis.

The second pillar has three Axis. From all the money that goes into second axis of the second pillar, we replace £6 with £10.”