Rural Development Plan for Wales THE RURAL DEVELOPMENT PLAN

Rural Development Plan for Wales 2000-2006 THE RURAL DEVELOPMENT PLAN FOR WALES 2000-2006 CONTENTS Page No. 3 4 7 8 9 11 13 14 19 21 23 23 49 52 59 70 73 103 110 116 119 144 145 175 176 177 PART 1 - INTRODUCTION List of Acronyms List of Annexes List of Appendices 1 2 3.1 3.2 4 Title Member state and administrative region Geographical area covered by the Plan Regions classified as Objective 1 and 2 Planning at the relevant geographical area PART 2 - CURRENT SITUATION AND PROPOSED STRATEGY 5.1 Quantified description of the current situation Physical Context Welsh Rural Infrastructure Population and Society in Rural Wales Economic Position of Rural Wales Sectoral Position Agriculture in rural Wales Farm Diversification The Environmental Impact of Agriculture Strengths, Weaknesses, Opportunities and Threats (SWOT) Impacts of previous programming period Other Information Description of the proposed strategy with quantified objectives and rural development priorities selected Description and effects of other measures (outside rural development plan) Areas covered by specific territorial measures Time-scheme and uptake (proposed timetable for implementing the various measures, expected uptake and duration) 5.2 5.3 6.1 6.2 6.3 6.4 1 7 8 Appraisal showing the expected economic, environmental and social impacts, including employment effects Finance Tables 179 183 PART 3 - PROPOSED MEASURES 9 9.1 9.2 9.3 9.4 9.5 9.6 9.7 9.8 9.9 9.10 9.11 Description of the measures contemplated for implementing the plans Good Farming Practice Minimum Standards Economic Viability of Holdings Derogations to Article 37(3) Regulation 1257/99 Investment in Agricultural Holdings Training (Farming Adaptation) Less Favoured Areas and areas with Environmental Restrictions Agri-environment Processing and Marketing of Agricultural Products Forestry Promoting the Adaptation and Development of Rural Areas (Article 33 measures) 187 189 199 206 207 208 215 228 238 314 324 342 351 353 355 357 369 373 375 377 379 PART 4 - IMPLEMENTATION 10 11 12 13 14 15 16 17 Need for any studies, demonstration projects, training or technical assistance Designation of competent authorities and bodies responsible Provisions to ensure effective and correct implementation including monitoring & evaluation, controls, sanctions and publicity Results of consultations and designation of associated authorities and bodies as well as economic and social partners Balance between the different support measures Compatibility and Consistency Additional State Aids Ex-ante evaluation 2 THE RURAL DEVELOPMENT PLAN FOR WALES 2000-2006 PART 1: INTRODUCTION This part of the plan addresses points 1 to 4 of the Annex to Commission Regulation 1750/1999: List of Acronyms List of Annexes List of Appendices 1 2 3.1 3.2 4 Title Member state and administrative region Geographical area covered by the plan Regions classified as Objectives 1 and 2 Planning at the relevant geographical level 3 List of Acronyms Acronym RDP WOAD NAWAD EAGGF CAP LFA ATO SSSI AONB NNR ESA TENS ONS HLCA SDA ICT ISDN2 LAN GCSE TEC IT GP GDP Rural Development Plan Welsh Office Agriculture Department National Assembly for Wales Agriculture Department European Agriculture Guidance and Guarantee Fund Common Agriculture Policy Less Favoured Area Accumulated Temperature Sites of Scientific Interest Area of Outstanding Natural Beauty National Nature Reserve Environmentally Sensitive Area Trans European Networks Office of National Statistics Hill Livestock Compensatory Allowances Severely Disadvantaged Area Information and Communications Technolog Integrated Services Digital Network - with 2 lines Local Area Network Government Certificate of Secondary Education Training and Enterprice Council Information Technology General Practitioner Gross Domestic Product Full Title 4 Acronym DA ALC BSE GATT SAP ESU CCW SME HE ADAS FRCA RSPB USAM NPCI IDO OP ERDF ESF SPD WEPE LAG WDA NVQ FDG GNVQ MLC PAYE HACCPS BHP Fv/ha Full Title Disadvantaged Area Agricultural Land Classification Bovine Spongiform Encephalopathy General Agreement on Tariffs and Trade Sheep Annual Premium European Size Units Countryside Council for Wales Small and Medium Sized Enterpise Higher Education ADAS - there is no fuller name Farming and Rural Conservation Agency Royal Society for the Protection of Birds Unscheduled Historical Monument National Programme of Community Interest Integrated Development Operation Operational Programme European Regional Development Fund European Social Fund Single Programming Document Welsh European Programming Executive Local Action Group Welsh Development Agency National Vocational Qualification Farm Diversification and Improvement Grant General National Vocational Qualification Meat and Livestock Commission Pay As You Earn Hygiene and Critical Control Points System Basic Hectare Payment Farming Value / Hectare 5 Acronym LU BSP UKROFS IACS NFU FUW CLA CAIS SPA SAC WGS SNP OFS AAPS OCIS PMG UKWAS FSC DTI AMG LEAP Livestock unit Beef Special Premium Full Title United Kingdom Register of Organic Food Standards Integrated Agricultural Control System National Farmers Union Farmers Union of Wales Country Landowners Association Countryside and Agricultural Information Service Special Protection Areas Special Areas of Conservation Woodland Grant Scheme Snowdonia National Park Authority Organic Farming Scheme Arable Area Payments Scheme Organic Conversion Information Service Processing and Marketing Grant Scheme United Kingdom Woodland Assurance Scheme Forestry Stewardship Council Department of Trade and Industry Annual Management Grant Livestock Exclusion Annual Premium 6 List of Annexes These documents are intended to be part of the legally approved Rural Development Plan. Annex 1 Tir Gofal - Control Plan Annex 2 Tir Gofal - Costings Annex 3 Organic Farming Scheme – Control Plan Annex 4 Organic Farming Scheme - Costings 7 List of Appendices These documents provide information on the background to the Rural Development Plan and the measures proposed. They do not form part of the legally approved Plan. Appendix 1 Appendix 2 Appendix 3 Appendix 4 Appendix 5 Appendix 6 Appendix 7 Appendix 8 Appendix 9 Appendix 10 Appendix 11 Appendix 12 Appendix 13 Appendix 14 Appendix 15 Appendix 16 Appendix 17 Appendix 18 Appendix 19 Appendix 20 Appendix 21 Appendix 22 Appendix 23 Current position of the Agri-environment Programme approved under Regulation 2078/92 Review of the Organic Aid Scheme Monitoring and Evaluation report on Tir Cymen LFA policy in Wales : A Review of the Socio-economic and Environmental Effects of the Hill Livestock Compensatory Allowances Scheme Ex Post Evaluation of the Dyfed, Gwynedd and Powys 1987-1993 NPCI / IDO and Objective 5b CSF - Final Report Interim Evaluation of the Rural Wales Single Programming Document 1994-1999. Examples of projects supported under EAGGF Objective 5b. Details of the Priorities and Measures under EAGGF Objective 5b. Interim evaluation Report Action Plan - Rural Wales 5b Programme. Mid Term Evaluation of the LEADER II Programme for Wales Interim evaluation Report Action Plan - Wales LEADER II Programme Farming For the Future Consultation Document. Details of Lantra Training courses. Less Favoured Areas and their Role in Maintaining Viable Rural Communities and the Wider Countryside Codes of Good Agricultural Practice. State Aid Notification for Tir Gofal The Organic Aid Scheme (Wales) - Regulation 2078/92 (as amended). Eligibility of Land for Arable Area Payments (booklet) Agri-Food Action Plans and Executive Summary Evaluation of the EAGGF Processing and Marketing Grant Scheme 1991-1993 and 1994-1999 A Guide to the Woodland Grant Scheme Forecasts Table (Table 4) -Cumulated Indicators for Monitoring the Rural Development Plan Ex Ante Evaluation Report 8 1 TITLE 1.1 This plan, which is submitted under Council Regulation 1257/1999 and Commission Regulation 1750/1999, is entitled The Rural Development Plan for Wales 2000-2006. 9 10 2 MEMBER STATE AND ADMINISTRATIVE REGION 2.1 The plan, which has been prepared by the National Assembly for Wales (the competent authority designated by the Member State in accordance with Article 41 of Council Regulation 1257/1999), applies to the administrative region of Wales within the United Kingdom. 11 12 3.1 GEOGRAPHICAL AREA COVERED BY THE PLAN 3.1.1 Wales is predominantly a rural country. The plan is therefore intended to apply to the whole of Wales, except for those parts which are clearly urban and developed. All the administrative areas in Wales include some parts that exhibit rural characteristics and problems, and where rural activities are undertaken. 3.1.2 This plan therefore provides a framework for the development of the whole of rural Wales. It is important to recognise that, while the concept of "rural Wales" is readily recognisable, and indeed evocative, there is no distinct boundary separating the urban and rural areas of Wales. There is a natural and increasing interdependence between countryside and town: the boundaries are blurred by commuting and shopping patterns and by leisure and recreation choices. Nevertheless, there are significant economic, social and cultural differences between rural and urban areas, and consequently differing needs and priorities. The needs and priorities of rural Wales, whether of the remotest rural areas or of the accessible countryside, underlie this plan. 3.1.3 The conceptual difficulty in defining rural Wales is mirrored in practical terms, so that rural Wales is not an unambiguously identifiable economic region. As a result, statistical and economic information is not available on a predefined or commonly agreed basis. This problem is compounded by the recent reorganisation of local authorities, which means that it can be difficult to produce time-series data to a consistent definition. For statistical purposes we have used data at an all-Wales level, for the unitary authorities which are predominantly rural (namely the current local authority areas of Anglesey, Gwynedd, Conwy, Denbighshire, Powys, Ceredigion, Pembrokeshire, Carmarthenshire and Monmouthshire, which between them account for almost one-third of the total population of Wales), or for the Less Favoured Areas of Wales (defined on Map 1 in Section 5.1). Where data is only available on the basis of the previous local authority areas, the counties of Dyfed, Powys and Gwynedd are taken to represent Rural Wales. 3.1.4 As explained in 3.1.1, rural areas exist across Wales, and are not confined to the local authorities identified as "rural" in the analysis above. There is absolutely no presumption that the issues identified in this plan are confined to the areas listed above, nor is there an assumption that they are uniformly relevant across rural areas. The inevitable consequence is that some of the priorities and measures identified later in this plan must be tailored to the differing needs of different rural areas within Wales. In some cases measures are – and should be – available across the totality of rural Wales; an example is the all-Wales agri-environmental scheme, Tir Gofal. In others, such as that dealing with support for Less Favoured Areas, the extent of coverage is pre-determined by the definition of such areas. And in certain other measures, a degree of spatial targeting is necessary to ensure that best value for money is achieved from limited resources. Such targeting, which generally reflects the fact that the main focus of the plan is on the more rural parts of Wales, is explained in the relevant sections of the plan. The detailed eligibility rules and selection criteria for individual measures will be constructed so as to ensure that support under the measures is delivered exclusively in rural areas, and additional checks will be built into project assessment procedures to provide a further verification that EAGGF resources are not directed into nonrural areas. In particular the eligibility rules and selection criteria for the measure relating to processing and marketing of agricultural products, and the measures which it is proposed to implement under Article 33 of Regulation 1257/1999, will specify the circumstances in which actions financed under the Plan may be located within small market towns in rural Wales. 13 3.2 REGIONS CLASSIFIED AS OBJECTIVES 1 AND 2 3.2.1 The following local authority areas comprise the Objective 1 area in Wales for the period 2000 to 2006: Blaenau Gwent, Bridgend, Caerphilly, Carmarthenshire, Ceredigion, Conwy, Denbighshire, Gwynedd, Isle of Anglesey/Ynys Mon, Merthyr Tydfil, Neath Port Talbot, Pembrokeshire, Rhondda Cynon Taff, Swansea and Torfaen. The area eligible under Objective 1 is defined under the NUTS system as the West Wales and the Valleys NUTS 2 area. The extent of the Objective 1 area is indicated on Map 11. Rural development measures financed by the EAGGF Guarantee section (which must include agri-environmental measures and may include measures relating to less-favoured areas, afforestation of agricultural land and early retirement) are financed under this plan on an all-Wales basis, while those financed under the EAGGF Guidance section are explicitly financed under Priority 5 of the Objective 1 Single Programming Document which was submitted to the European Commission by the National Assembly in November 1999. 3.2.2 Coverage of the Objective 2 area in Wales is defined by ward. Eligible areas, based on indicators of deprivation such as, poverty, social exclusion, severely disadvantaged land designation and low population density, include 10 wards in Cardiff (population 117,600), 9 wards in Newport (population 51,900) and 84 wards in Powys (population 102,700) giving a total population coverage of 272,000. Eligible wards are listed in Annex A. 3.2.3 In addition, those parts of East Wales previously eligible for structural fund support under either the 1994-1999 Industrial South Wales Objective 2 (population 302,000) or the 1994-1999 Rural Wales Objective 5b (population 28,000) programmes, but not eligible for the new Objective 2 programme, will receive transitional funding. Eligible areas include parts of the local authority areas of Cardiff, Newport, Powys, Monmouthshire, Vale of Glamorgan and Wrexham. Eligible wards are listed at Annex B. 3.2.4 All those wards in Powys eligible under Objective 2, together with the rural parts of those areas receiving transitional funding, will be covered by the Rural Development Plan. 3.2.5 Map 11 indicates the Objective 2 area. It is intended that, where the relevant Regulation (1261/1999) permits, relevant rural development measures should be funded from European Regional Development Fund resources under Objective 2 rather than be funded by the EAGGF Guarantee section under the Rural Development Regulation. 14 Annex A OBJECTIVE 2 AREAS FOR WALES The following wards in Cardiff: Adamstown Butetown Grangetown The following wards in Newport: Marshfield Graig Rogerstone The following wards in Powys: Llanrhaeadr-y-Mochnant Llansillin Aber-Craf Bronllys Builth Cwm-Twrch Erwood Felin-Fach Llanafanfawr Llangamarch Llanwrtyd Wells Llywel Maescar Tawe-Urchaf Ynyscedwyn Yscir Ystradfellte Ystradgynlais Banwy Berrlew Cadfarch TOTAL POPULATION - 270,000 Caersws Carno Churchstoke Dolforwyn Forden Glantwymyn Gullsfield within Gullsfield without Kerry Llanbrynmair Llandinam Llandrinlo Llandysilio Llanfair Caereinion Llanfihangel Llanfyllin Llangurig Llanidloes East Llanidloes West Llansantffraid Llanwddyn Machynlleth No 1 Machynlleth No 2 Malfod Mochdre Montgomery Newtown Central Newtown East Newtown Llanllwchaiarn North Newtown Llanllwchaiarn West Newtown South Rhiewcynon Trefeglwys Trewern Welshpool Castle Welshpool Gunrog Welshpool Llanerchyddol Beguidy Clyro Disserth and Trecoed Galdestry Glasbury Glaescwm Knighton Llanbadarn Fawr Llanbister Llandrindod East Llandrindod North Llandrindod South No 1 Llandrindod South No 2 Llandrindod West Llanelwedd Llanfihangel Rhydithon Llangunllo Llansanfflraed Cwmdeuddwr Llanyre Nantmel New Radnor Old Radnor Painscastle Presteigne Rhayader Town St Harmon Tredegar Park Liswerry Llanwern Stow Hill Bettws Pillgwenny Riverside Ely Caerau Canton Splott Rumney Trowbridge 15 Annex B OBJECTIVE 2 TRANSITIONAL Ward Name Llanelly Hill Caerwent Caldicot Castle Cantref Castle and Grofield Croesonen Crucorney Dewstow Goetre Fawr Lansdown Larkfield Llanbadoc Llanfoist Fawr Llangybi Fawr Llanover Llanwenarth Ultra Magor with Undy Mardy Portskewett Priory Raglan Rogiet St. Arvans St. Christophers St Kingsmark St Marys Severn Shirenewton Thornwell Usk West End Allt-yr-yn Alway Beechwood Caerleon Gaer Population 1991 3,868 2,391 2,392 3,138 2,142 1,606 1,891 1,477 2,295 1,688 1,471 1,302 1,580 1,607 2,239 1,493 3,962 2,499 1,905 2,625 1,857 1,081 1,451 1,877 2,495 1,652 4,449 2,391 1,966 2,187 1,601 8,429 8,716 7,899 8,320 8,583 Population 1996 4,175 2,580 2,582 3,387 2,312 1,733 2,041 1,594 2,477 1,822 1,588 1,405 1,705 1,734 2,416 1,611 4,276 2,697 2,056 2,833 2,004 1,167 1,566 2,026 2,693 1,783 4,802 2,580 2,122 2,360 1,728 8,643 8,937 8,099 8,531 8,801 16 Ward Name Langstone Malpas Ringland St. Julians Shaftesbury Victoria Coychurch Lower St. Bride’s Major Creigiau Pentyrch Cyncoed Lisvane and St. Mellons Llanrumney Pentwyn Plasnewydd Roath Alexandra Baruc Buttrills Cadoc Castleland Court Illtyd Rhoose Sully Total Old Objective 2 Transitional Population 1991 2,655 8,583 9,048 8,688 5,365 6,453 2,687 3,193 2,766 3,581 10,477 6,148 12,403 16,695 14,002 10,438 11,109 5,478 5,613 7,716 3,893 5,221 7,461 4,447 4,275 287,160 Population 1996 2,722 8,801 9,278 8,908 5,501 6,617 2,681 3,186 3,026 3,918 11,430 6,726 13,570 18,561 15,319 11,420 11,086 5,467 5,601 7,700 3,885 5,210 7,446 4,438 4,266 301,629 17 OBJECTIVE 5B TRANSITIONAL Ward Name Ceiriog Ganol Chirk North Chirk South Bwlch Crickhowell Gwernyfed Hay Llanfrynach Llangattock Llangors Llangynidr St. David within St. John St. Mary Talgarth Talybont-on-Usk The Vale of Grwyney Total Old Objective 5b Transitional Total Objective 2 and 5b Transitional Plus Llangollen Rural pt Equals Rounded Total Population 1991 1,765 2,304 1,690 904 2,166 1,375 1,407 1,097 1,078 1,059 983 1,424 3,344 2,755 1,818 669 844 26,682 313,842 Population 1996 1,798 2,347 1,721 941 2,255 1,432 1,465 1,142 1,122 1,103 1,023 1,483 3,482 2,868 1,893 697 879 27,651 329,280 1,800 1,830 315,000 330,000 18 4 PLANNING AT THE RELEVANT GEOGRAPHICAL AREA 4.1 The rural development measures to be applied in Wales have been integrated into this single Rural Development Plan, to the extent that this is practicable given the complex inter-relationships which exist in terms of funding certain measures under the Objective 1 and Objective 2 programmes, the Objective 3 programme for East Wales, and the LEADER plus and INTERREG Community Initiatives. The planning documents required for these programmes and initiatives are at different stages of development; this plan reflects the position, and takes account of the information available, for each of the other documents at the time of submission. The Objective 1 Single Programming Document and the Objective 3 Operational Programme have been approved by the Commission and this plan reflects the outcome of those negotiations. The Objective 2 Single Programming Document and the plans for the Leader plus and INTERREG initiatives are in preparation but are not due to be submitted until 2000. These plans will be in line with the strategy and priorities set out in this Plan. 4.2 This plan provides an overview of the current situation in the whole of rural Wales and of the problems with which it is faced (Section 5) and a proposed strategy required to combat those problems (Section 6). In each of these Sections the general overview is followed by more detailed consideration of the issues which can most directly be addressed through the measures available under the Rural Development Regulation, while Section 7 summarises the global impact of the proposed strategy and Section 9 describes in more details the actions which it is intended to undertake under the priority measures. 19 20 PART 2: CURRENT SITUATION, PROPOSED STRATEGY AND EXPECTED IMPACTS This part of the plan addresses points 5 to 8 of the Annex to Commission Regulation 1750/1999: 5 6 7 8 Quantified description of the current situation Description of the strategy proposed, its quantified objectives, rural development priorities selected and geographical area covered Appraisal showing the expected economic, environmental and social impacts Indicative overall financial table 21 22 5.1 CURRENT SITUATION The purpose of this Section of the plan is to provide a factual context for later sections which set out the proposed strategy and priorities for the development of rural Wales. The analysis of the current situation in rural Wales as a whole is broken down into the following main elements: the physical context, population, society, the economic position, environmental designations and schemes. Recognising the fundamental importance of agriculture in the context of the economic, environmental and social sustainability of rural Wales, and the weighting of the specific measures available under the Rural Development Regulation towards agriculture issues, this general overview is then followed by a detailed analysis of the current position and potential for development of agriculture in rural Wales. The Section concludes with a summary of the area’s strengths, weaknesses, opportunities and threats in respect of rural development issues. Physical Context 5.1.1 Wales is a country of great physical diversity. It covers an area of 20,000 km2 and is characterised by its mountain ranges, with more than half of the land area above 200 m and much over 600 m. Its widest point is a distance of 185 km between Ramsey Island and Monmouth and the narrowest 55 km from Borth in Ceredigion to Anchor, on the River Clun. The maximum length is 240 km from Carmel Head on Anglesey to Barry in the Vale of Glamorgan. 5.1.2 Fundamentally, it is the geological history of Wales which has ultimately created the patterns of relief in the country. The physical nature of this landscape in terms of its height and variation has then influenced and exaggerated the impact of physical, chemical and biological earth surface processes which have acted upon it. Numerous phases of glaciation, a variety of erosional processes and the development of river systems, have in turn resulted in dramatic variations in the surface relief. Although all physical features are highly interactive, creating complex ‘cause and effect’ cycles, it is the topography of Wales which is undoubtedly the overriding physical feature. The great variation in topography directly corresponds to differences in climate, geology and soils. It is the combination of all of these characteristics that gives Wales its uniqueness and diversity. This diversity in physical characteristics, although not directly responsible for creating the agricultural systems and rural communities which are apparent today, have most definitely had a strong influence on the extent of their development. Topography 5.1.3 The great topographic variation which occurs over short distances directly influences the differences in other physical features, particularly climate and soil. It is the great variation in relief coupled with localised climatic differences which overrides the limitations of all other physical features in terms of agriculture and has exaggerated the disparities in the structure of rural communities. Brown (1960) divides Wales into six relief regions as described below, which gives an overall description of Wales in terms of its topographic variation. 5.1.4 Mountains The mountains of Wales are the most significant relief feature, covering more than half of the country and dominating the appearance of the landscape. Map 1 shows the boundary of the Less 23 24 Favoured Area designation, which covers approximately 80% of the total area of Wales, and parallels closely the mountainous and upland areas within Wales. The highest mountains are in the north west where the rugged scenery of Snowdonia reaches an altitude of 1085 m at its peak, and supports a variety of landscapes including high moorland, scree slopes, cliffs and lakes. Cader Idris, Arenig and the Aran Range, which also lie in this region, all reach altitudes above 600 m. The mountains of Central Wales around Plynlimon have a less rugged appearance than the north west. In the south the Brecon Beacons mark the northern edge of the coalfield syncline. 5.1.5 Upland plateau The upland plateaux areas of the Welsh landscape are dominated by moorland with gentler slopes dissected by deep valleys. The landscape is far less dramatic here. The Central Wales uplands and Mynydd Hiraethog are prime examples. 5.1.6 Hills Below the upland plateaux and at altitudes of less than 600 m lie the ‘hills’ where a diverse geology provides scenery characterised by craggy outcrops. These areas are highly dissected and include the mid-Wales borderland and the Clwydian range. 5.1.7 Coastal plateau The coastal plateaux are erosion surfaces underlain by a range of rocks from Jurassic limestones to Precambrian igneous rock. Three such plateaux are traceable at different altitudes. The best examples, where least dissection has occurred, can be traced in Gower, the Lleyn and Anglesey at an altitude of 60 m. 5.1.8 Valleys The broad valley lowlands of the Rivers Tywi, Teifi, Conwy, Clwyd, Severn, Usk and Wye can be up to several kilometres wide and represent a valuable but limited area of flat and fertile land. 5.1.9 Coastal Flats The coastal flats are not extensive since much of the Welsh coast has a dramatic cliff line, but more sheltered areas such as Carmarthen Bay do have flats. The coastline is highly diverse with salt marshes, large dune systems, long sand beaches and spectacular cliffs. The Dee and Severn estuaries are also examples of coastal flats. Climate 5.1.10 Lying on the western edge of Great Britain, Wales is the first to experience the frontal weather systems brought in from the Atlantic. The coastal climate is, therefore, moist and mild, with the more sheltered areas around Carmarthenshire and south-east Pembrokeshire being comparatively sunny and dry. Local variations in climate are fundamentally controlled by altitude and distance from the sea. Coastal areas of Wales experience temperature ranges which are regulated by the sea, resulting in cooler summers but milder winters. 5.1.11 In contrast, the inland mountainous areas, such as Snowdonia, are regions where these two controlling factors are maximised so creating severe climatic conditions. The high altitude of the mountains causes these areas to be predominantly cloudy and to suffer low temperatures, high rainfall and a high degree of exposure. Snow can remain on the mountains for long periods during the winter months, causing problems for hill farmers. The combination of these climatic factors with the dramatic relief creates a very harsh environment. 25 5.1.12 Rainfall within Wales is not as diverse as other physical factors, being high throughout the country. There are a few localised differences mainly as a result of height above sea level and the effect of the mountain masses. In general the southern regions of Wales are wetter than the north, although Snowdon has the highest average annual rainfall of 4,500 mm. To the east of the main mountain mass there is a marked rain shadow such that the Black Mountains experience far less rainfall than the Brecon Beacons in whose rainshadow they lie. Only south-east Wrexham and north Flintshire have comparatively lower rainfall. The amount of rainfall will, obviously, influence the type of farming practised. However, the variation in total rainfall from year to year will also impact on individual farming patterns. For example the carrying capacity of land is directly affected by rainfall, such that livestock cannot be ‘out wintered‘ even on the low lying land of Wrexham and Flint if the annual rainfall has been high. 5.1.13 The most commonly used measure of temperature is calculated as the accumulated temperature (AT0) above 0°C for the months January to June. This calculation is based on research which shows that the rate of leaf extension in grasses and cereals is maintained in decreasing temperatures down to 0°C. The calculation only includes the first part of the year because most arable crops ripen early and so do not benefit from higher temperatures late in the year. The lowland areas have an AT0 range of between 1400 and 1500°C. The southern coastal areas of Wales are the only regions to have average AT0 above 1500°C. The west and south coastal areas are among some of the mildest in Britain, benefiting from relatively high early spring temperatures. For these reasons some communities on the Lleyn, Anglesey and Pembrokeshire are able to grow early potatoes. 5.1.14 With increased altitude, temperature will drop by 0.5°C for every 90 m gained in height. Every 15 m rise will have the affect of shortening the growing season by 2 days. In the hill areas and uplands the AT0’s are significantly low, at less than 1300°C. The main mountain regions of central and north-west Wales are the coldest, with AT0’s of less than 1100°C. 5.1.15 The mountains of Wales experience higher AT0’s than similar regions further north in Britain, but far lower AT0’s than areas of Europe and North America with the same latitudes and altitudes. Climate Change and Global Warming 5.1.16 It is the potential change in climatic variability and frequency of extreme events which will have the greatest significance for Wales, and particularly for agriculture. With increases in temperature and rainfall an increase in the number of severe storms and storm surges is inevitable affecting both the best and most versatile land and hill land. Storms affect best and most versatile land through salt intrusion, flooding and high velocity winds, all of which have impacts of soil quality, lowering fertility, increasing leaching and compaction and resulting ultimately in increased erosion. The majority of best and most versatile land in Wales is located in the north east, Pembrokeshire and in the river valleys of the south. This is of major concern since flash flooding from both storms and the potential rise in sea level will primarily affect river valleys through salt intrusion and erosion of soils. 5.1.17 It has been predicted that rainfall will increase by 10% over the UK by 2050. Whilst some areas of the UK will suffer drier conditions the majority of the predicted increase in rainfall will occur over the north of the UK and Wales. In Wales the major concern is for the increase in extreme downpours which 26 will significantly increase the threat of flooding. 5.1.18 Temperature analysis using historic climate data in the UK (Central England Temperature series) confirms that the UK has warmed 0.5°C during the 20th century. This warming has been greatest in the winter so causing a decreasing number of cold days and an increasing number of hot days. Additionally, the last recorded decade (1988-1997) was the warmest of all those analysed, having four of the five warmest years since 1659. 5.1.19 UK temperatures are expected to increase a further 1.9-2.1°C by 2050, mainly due to increased CO2 levels. It is likely that even if the commitment to reduce CO2 emissions over the next decade were to be achieved, temperature would still increase by about 1°C. 5.1.20 For agriculture, warmer temperatures may offer some benefits. A warmer climate would favour crops such as potatoes and forage, with 5-10% increases in root crop yields, important to the potato growing regions in Pembrokeshire. However, increased temperature and a longer growing season would also cause changes in the water balance, resulting in predicted falls of 5-10% in wheat yields. Increased UVB levels may also be a problem in some crops such as barley, oats, sugar beet and potatoes. 5.1.21 Other implications of climate change for Wales include warmer and drier summers increasing the opportunity for cultivation of novel crops and boosting tourism. Increased temperatures will affect the UK as a whole, so that investment in new management techniques will be essential regardless of location. Geology 5.1.22 In geological terms Wales is ancient, with the rugged mountains of the north-west regions formed from some of the oldest parts rocks in the country, dating to the Palaeozoic era. The hard rocks which make up the mountain ranges of Snowdonia and Cader Idris comprise Cambrian, Ordovician and Silurian rocks, with the highest peaks formed from hard erosion-resistant igneous rocks. The oldest region is Anglesey, and parts of the Lleyn, where smaller areas of Pre-cambrian rocks are located. Map 2 indicates the geology of Wales. 5.1.23 The central regions of Wales are predominantly made up of Ordovician and Silurian solid rock. There is a variety of rock types in the mountains including the shales and mudstones of the Plynlimon area, with the Radnor Forest area based on siltstones. 5.1.24 Southern regions of Wales are generally younger in geological terms consisting of a more diverse range of solid rock, with Devonian, Carboniferous and Triassic being the most dominant. Cambrian grits which form the Harlech dome to the north also form the South Wales summits which mark the edge of the coalfield. To the west the Millstone Grit Quartzites and grits form the highest ground of the Black Mountains. 5.1.25 Drift geology comprises all deposited material dating from the Quaternary period. Such deposits cover much of Wales, and range from Pleistocene till, gravels and head to recent alluvium, wind blown sand and peat. Although Wales has been glaciated three times in the Quaternary period, only the last two have provided parent material, especially the last (Wolstonian) which covered all of Wales. 27 5.1.26 Glacial till and Head relating to the glacial periods are the commonest drift deposits found extensively throughout Wales. Lodgement till found in both valleys and plains is often very compacted and can have strong influences on the soil structure above, causing frequent waterlogging. Peat is the next most frequent drift material, found predominantly in the uplands and mountains. Peat is most extensive in the uplands of the Snowdonian, Aran and Cambrian mountains, with less extensive lowland peats located at Tregaron and Borth bogs. There are some Reddish till deposits located in the borderland regions of Flintshire, Wrexham and also around Newport. 5.1.27 Glaciofluvial and river terrace drift are also widespread in Wales particularly in Clwyd where they form extensive areas of sand and gravel deposits. The extraction of these deposits has most influence in North Wales, where rural communities have built up around this strong industry. Other extensive deposits are located on the Lleyn and in the former Mid Glamorgan. At the moment sand and gravel demand in South Wales is supplied by marine dredging, but there is possibility that future demand will be supplied by land extractions. 5.1.28 The fertile alluvial materials are the rarest drift deposits only occurring in abundance around the Dee in Flintshire and Wrexham and in lesser amounts in South Pembrokeshire, Newport and the NorthWest near Porthmadog. For the rest of Wales the drift covering is very thin or absent. 5.1.29 The geology of Wales has possibly the least direct influence of the physical factors on agriculture and rural communities. In the uplands which dominate Wales, geological limitations are relatively minor in comparison to the impact of topography and climate. In the lower regions where topography and climate pose less of a limitation the geology is of more importance, particularly to arable areas. The main influence of geology is on the fertility and structure of the soil which it supports. 28 29 Soils 5.1.30 There is a wide variety of different soil types within Wales, providing a diverse range of soil fertility levels for agricultural use. Ultimately the distribution of these different soil types is fundamentally controlled by the underlying geology and the topography. However, regional differences in agricultural practices are emphasised by the presence of either good quality, fertile soil or poor quality, shallow, infertile or waterlogged soils. 5.1.31 Map 3 illustrates the distribution of the major soil groups within Wales. From the map the relationship between topography, climate and soil type is clear. 5.1.32 Podzol soils are the dominant upland soils, covering an approximate area of 68,100 ha. The heavy rainfall common to the high altitudes of the mountains causes the iron within the soil to be leached down through the profile. The result is a distinct bleached layer where the iron has been removed and an orange layer lower down where iron has been deposited. A hard iron pan layer above the deposition layer is common, which can cause waterlogging. These soils are often affected by the low mountain temperatures which cause the profile to have a dark, peaty topsoil. 5.1.33 The most common soil in Wales is the upland acid soil of the Manod Association, a typical brown podzolic soil. The Manod Association covers an approximate area of 38,000 ha in Wales. These soils are dominant on land above 200 m with slopes generally over 11° and where rainfall is in excess of 1,000 mm per year. These factors apply to over 50% of Wales, making the Manod Association of significant importance. The main soils within this Association are permeable and well drained, but because they are predominantly located in areas of high rainfall the soils remain wet throughout the year. Most of the land is permanent pasture, leys or rough grazing due to the terrain in which it occurs, although where these soils are found at lower altitudes they will support the cultivation of cereals, brassicas and early potatoes, as in Pembrokeshire. 5.1.34 Peats are organic soils derived mainly from partially decomposed plant remains that accumulate under waterlogged conditions. The need for waterlogged conditions means peat soils are predominantly found in the high mountains where the high rainfall and cool temperatures limit the decay of vegetation. The most extensive areas of peat are on the tops of the Snowdonia, Aran and Cambrian Mountains. Areas of peat do occur in the lowlands, the most expansive being Tregaron and Borth bogs. The wet nature, and associated topography of these soils limits their use considerably. Some extraction for fuel has occurred in parts of Wales but this has been minimal. 5.1.35 Gley soils are wet and usually waterlogged, in varying degrees, for half of the year. The surface water gley soils found in the valleys of Ceredigion are formed over non-porous boulder clay, giving the soil a high clay content and compacted structure making them impermeable. This causes water to accumulate on the surface. High ground water levels, common in valley bottoms, will also cause gleying. Gley soils are characterised by the presence of mottles within the profile. The area of Wales covered by surfacewater and ground-water gleys is approximately 513,000 ha. 30 31 5.1.36 Cegin and Brickfield Associations are typical examples of cambic gley soils which occur commonly in the rolling uplands and on valley floors. They are typical examples of soils in Wales. North Anglesey, Newtown and Llandrindod Wells have extensive areas of Cegin soils and it is the most common soil Association in Ceredigion. These soils are slowly permeable and intractable for much of the year. Their wetness varies with rainfall and topography. In wetter regions these soils are waterlogged for much of the year and are not easily improved with drainage. Grass is the commonest coverage, with some barley and root crops grown on Cegin soils in the drier eastern regions, although harvesting is often delayed by bad weather. 5.1.37 Brown soils are dominant below 300 m where slopes are gentler and rainfall is less than in the mountains covering an approximate area of 623,000 ha. They form on a variety of permeable materials and are typically deep and well drained, without gleyic features. These soils are productive and so are mainly in agricultural use. 5.1.38 Milford and Denbigh Associations are common to the lower regions and are both typical brown earths. Denbigh soils are fairly deep, well drained brown soils, found up to 300 m, and formed over sedimentary rocks. Grass is the typical crop type of these soils although in drier regions the land is cultivated, limited only by rainfall. 5.1.39 Milford soils are most common in South Wales where they have formed on siltstone, mudstone and particularly Old Red sandstone rocks, on a range of slopes from the gentle gradients in Pembrokeshire to steep slopes at 400 m in the Brecon Beacons. They are well drained and support a range of agricultural land use depending on rainfall. In the drier regions of West Carmarthenshire and Gwent dairying is found and some barley is grown. Where land is wetter permanent grass for beef and sheep farming is dominant. Environmental Designations 5.1.40 Wales is a diverse country in terms of its geography. This is reflected in its beautiful countryside and landscapes, many of which have high ecological value. Traditional farming practices in Wales have had a profound influence on the intrinsic character of the countryside, the land having been worked over thousands of years to produce interesting and valuable habitats. The change in these traditional agricultural practices is one of the greatest threats to the Welsh countryside. However, the land is also subject to a range of pressures including tourism, non-agricultural development, transport and agriculture. 5.1.41 The vulnerability of the countryside to the changing pressures of modern agricultural and economic forces in Wales is highlighted by the number of Statutory Designated Areas which cover a significant proportion of the country, as shown in Map 4. Map 5 shows the Sites of Special Scientific Interest, National and Marine Nature Reserves. Map 6 shows agricultural and environmental scheme boundaries. 32 National Parks 5.1.42 National Parks (Map 4) are areas of national importance in terms of natural beauty and diversity. The designation aims to preserve and enhance this natural beauty and diversity and to promote the enjoyment of the area by the public. The National Parks are not wilderness areas but are living and vibrant landscapes with thousands of people living and working within them: ! Snowdonia National Park covers the beautiful and rugged mountains of the Snowdonia range. It contains a wide diversity of landscapes from the coastal cliffs, beaches and estuaries through ancient semi-natural oak woodland to the open mountaintops. It also contains many rivers, lakes and streams. This notable landscape is home to many species of plant and animals; some are only to be found within the Park, for example the Snowdon Lily (Lloydia serotina), which is specifically adapted to live in the wet and cool conditions on Wales' highest mountain. Brecon Beacons National Park covers an area of Wales where man has lived and worked for thousands of years. It contains historic monuments dating from the ancient Celtic tribe of Cornovii through the Romans to Medieval castles battled over by Welsh and Norman Lords. The landscape is very beautiful with upland moorland ranging in type from acid heaths through to species rich limestone grasslands that support a huge range of plants and insects. Fourteen percent of the area is covered in woodland. Of particular importance are the rivers and lakes, which are home to many important fish and animal life, in particular the otter. Pembrokeshire Coast National Park includes the stunning coastal scenery of Pembrokeshire and all the offshore islands. The park contains many examples of valuable coastal vegetation, together with historic remains of man's past use of the area such as lime kilns. The offshore islands are of world importance for bird populations. For example, Skomer holds 100,000 pairs of Manx shearwater together with Puffin, Fulmars and Guillemots. Grassholm contains the largest colony of Gannets in the world with over 33,000 birds. The waters around the islands form the only UK Marine Nature Reserve with populations of grey seals and dolphins. ! ! Areas of Outstanding Natural Beauty (AONB's) 5.1.43 Five areas of Wales have been designated as Areas of Outstanding Natural Beauty. This designation provides additional planning control aimed at protecting and enhancing the countryside. The five AONB's are the Clwydian Range, Gower, Lleyn, Wye Valley and Ynys Môn. All these areas have spectacular coastal scenery and a great tradition of land use by man, recorded by the presence of historic monuments. In particular the Clwydian Range AONB is dominated by a set of Iron Age hill forts on top of steep sided heather covered hills. The Wye Valley is one of the most scenically attractive lowland areas in Britain. It contains comparatively large amounts of ancient broad-leaved woodland together with traditional unimproved pastures and hay meadows. The river Wye itself has formed an important communication link since the earliest settlers used this area. 33 34 Sites of Special Scientific Interest (SSSIs) 5.1.44 There are over 900 Sites of Special Scientific Interest (SSSIs) in Wales (Map 5) covering an area of over 200,000 ha. They include the full range of habitats important for plants, animals, geological or physiogeographic features. The designation is designed to protect the most vulnerable and important examples of habitats and often restricts agricultural activities. The wealth of SSSI's present in the country serves to highlight the environmental importance of Wales. National Nature Reserves 5.1.45 There are 62 National Nature Reserves (NNR's) in Wales (Map 5), highlighting the importance of Wales in terms of the habitats it supports. These include sites such as Cader Idris Mountain where the fragile upland habitats have to be managed in the context of one of Wales's most popular mountain walking areas. Wet grasslands, fens and mires are also well represented many of which have extremely rich flora and fauna. These are fragile systems kept in a stable condition by traditional low level management practices; many require careful supervision to maintain and enhance their ecological value. Other NNR's include woodlands, grasslands and limestone heathland. Biodiversity Action Plans in Wales 5.1.46 Many plants and animals in Wales have been identified as being particularly vulnerable to changing usage of the countryside. The changes that can quickly lead to loss and damage include factors such as: intensification of agriculture leading to loss of semi-natural habitats; widespread use of herbicides and pesticides; modification of river channels; spread of urban developments; atmospheric pollution and increases in tourism leading to disturbance of natural habitats and farming practices. 5.1.47 The plants most at risk have been notified under the Biodiversity regulations and specific action plans to preserve and enhance their populations have been drafted. At present plans have been produced that cover 54 species in Wales and twelve habitats. 5.1.48 The species accounts cover both plants and animals. So far fifteen plants are covered ranging from flowering plants such as the early gentian (Gentianella anglica) to mosses, liverworts and lichens such as the Orange-fruited elm-lichen (Collema dichotomum). Thirty-nine species of animal have been documented from insects and other invertebrates to mammals, birds, reptiles, amphibians and fish. The twelve habitats include areas from cereal field margins to lowland heathland and mesotrophic lakes. 35 36 Environmental Schemes 5.1.49 For certain areas outside the statutory designated areas, the former Welsh Office introduced voluntary agri-environment schemes that were available to farmers and landowners with an interest in conservation. These covered specific areas of Wales (ESA and Tir Cymen) or particular habitats (the Habitat and Moorland Schemes). In 1999 the Assembly launched Tir Gofal to replace these former schemes on an all-Wales basis. The old schemes have a life of ten years and many will be maintained for some years to come, providing valuable protection and enhancement. These include: ! Environmentally Sensitive Areas (ESA), launched by Welsh Office Agriculture Department (WOAD) in Wales in the Cambrian Mountains and Lleyn Peninsula in 1987 on a part farm basis. The whole farm schemes in Radnor and Ynys Môn were introduced in 1993 followed by similar schemes for the Cambrian Mountains Extension area, Lleyn Peninsula, Preseli and Clwydian Range in 1994. The original Cambrian Mountain ESA was relaunched as a whole farm scheme in 1995. ESA's were voluntary, whole farm schemes, available to farmers within the designated areas. The schemes were designed to protect areas of Wales where traditional farming methods had created distinct and valuable landscapes supporting a range of interesting and important wildlife habitats. ESA's provided support for the continuation of these traditional farming practices in order to protect and enhance the local environment. Tir Cymen, (Map 6) launched in 1992 by the Countryside Council for Wales. The scheme was designed to combine good farming practice with the conservation of semi-natural habitats, to encourage the integration of development, landscape conservation, protection of archaeological features and recreation. It was a voluntary whole farm scheme, available to farmers within the three pilot areas of Meirionnydd, Dinefwr and Swansea. The Habitat Scheme, launched by the Welsh Office in 1995. The aim of the scheme was to protect and enhance the wildlife value of specifically important habitats in Wales. The part farm scheme was voluntary and available to farmers throughout the whole of Wales. Any part of enclosed eligible farmland could be entered into the scheme, if assessed as able to achieve environmental benefits within the ten-year life of the scheme. The scheme related to the four habitats of the greatest importance throughout Wales: broad-leaved woodland, species rich grassland, water fringe and coastal belt. The Moorland Scheme, introduced in England and Wales in 1995. Its purpose was to protect and improve moorland areas, primarily through stocking rate reductions. The scheme was voluntary and eligible to farmers within the moorland area identified on the 1992 Moorland Map of England and Wales (Map 8). The Moorland Scheme was designed to protect moorland areas that have no protection under other agri-environment schemes. It was operated by setting maximum permissible winter and summer stocking rates on grass moorland and heather moorland. In addition, a plan of action of moorland management must be agreed. ! ! ! 37 38 39 5.1.50 Tir Gofal has integrated all the disparate elements of the above schemes. It was launched in 1999. It is a whole farm scheme available to any farmer or landowner throughout the whole of the Principality. It aims to compensate farmers for caring for wildlife, historic and cultural features on their land. Agreements are for ten years. The scheme was based on experience gained from the previous schemes and is designed to support the farming community in protecting the rich heritage of rural Wales whilst producing environmental benefits and promoting enjoyment of the countryside. Full details of the Tir Gofal scheme, which forms a key part of the strategy for rural development in Wales during the plan period, are given in Section 9.8. 5.1.51 In addition, the Organic Farming Scheme has replaced the former Organic Aid Scheme. These schemes were set up to help those farmers who wish to convert land to organic production. The Organic Farming Scheme is available across the whole of Wales and provides advice and payments to aid conversion of the land to organic status. Further details of the scheme are included in Section 9.8. 5.1.52 Separately, the Woodland Grant Scheme has evolved into the main funding package available to encourage both planting and management of existing woodland. The scheme includes Woodland Improvement Grants, location supplements and Challenge funding for specific types of management and planting. Challenge funding (usually in the range of 60% to 80% of costs) is on a three-year trial and has generally proved to be successful in increasing planting and bringing neglected or inaccessible woodlands under management. Natura 2000 5.1.53 EC Directive 79/409/EEC on the Conservation of Wild Birds (The Birds Directive) and EC Directive 92/43/EEC on the Conservation of Natural Habitats and Wild Flora and Fauna (The Habitats Directive) together establish a legislative framework for protecting and conserving Europe's wildlife and habitats. The Conservation (Natural Habitats) Regulations 1994 SI 1994/2716 (the Habitats Regulations) transposed the requirements of these Directives into national law in Great Britain. 5.1.54 At the centre of the policy is the creation of a coherent ecological network of protected areas across the EU - known as NATURA 2000 - for habitats and species considered to be of outstanding international significance and therefore of importance to the maintenance of biodiversity in the European Union. Its purpose is to maintain or restore the habitats and species at a favourable conservation status in their natural range. The network will comprise: ! ! Special Protection Areas (SPAs) for rare and migratory bird species; and Special Areas of Conservation (SACs) for the rare habitats and animal and plant species listed under the Habitats Directive. 5.1.55 Proposed SACs and SPAs are recommended to Government by the Joint Nature Conservation Committee via the country nature conservation agencies. In Wales this is the Countryside Council for Wales. Both internal governmental and full public consultations are held before sites are submitted to the European Commission. 40 5.1.56 SPAs are classified by the UK Government and lists forwarded to the Commission. Thirteen SPAs have already been classified in Wales. The nature conservation agencies are providing scientific advice on what further sites are needed in the UK. It is intended that the UK's list of SPAs will be substantially complete by the end of 2000. 5.1.57 The UK Government is responsible for proposing candidate SACs to the Commission. There are currently 44 candidate SACs in Wales. The Commission decides in consultation with Member States which candidate SACs should be regarded as Sites of Community Importance (SCIs). Following the first round of moderation meetings for the Atlantic Biogeographical Region, the UK has been advised that its site list is insufficient for a number of species and habitats. The nature conservation agencies have prepared scientific advice on further amendments and additions to the UK's list. On the basis of this advice the National Assembly for Wales has launched a public consultation for the first tranche of 16 additional areas on 6 July 2000, with a view to their proposal as SACs. A further substantial tranche of additional areas will be announced in Autumn 2000. 5.1.58 The United Kingdom is committed to submitting to the Commission a list of amended and additional candidate Special Areas of Conservation (SACs) under the Habitats Directive, together with related scientific information, as quickly as possible. A formal list will be presented to the Commission by January 2001. In line with its commitments, and pending presentation of its list, the United Kingdom gives a formal guarantee that it will take the necessary steps and implement appropriate procedures to ensure that sites being formally considered for Special Area of Conservation will not be damaged by operations part-financed by the Rural Development Regulation. A breakdown of the broad habitat types in Natura 2000 sites will also be provided in January 2001. 5.1.59 Countryside Council of Wales staff regularly monitor activities taking place in candidate SACs and in sites proposed as candidate SACs to ensure that these sites are not allowed to deteriorate. 5.1.60 Map 7 shows the Natura 2000 Designations together with the Less Favoured Areas in Wales and ESAs. 5.1.61 The Tir Gofal agri-environment scheme, together with other measures under the Plan, is a measure which facilitates the implementation of the conservation of NATURA 2000 sites, thus assisting the implementation of the EU Habitats and Birds Directive in Wales. 5.1.62 Farmers with land in SACs and SPAs who participate in these schemes must farm their land in accordance with an approved agri-environmental scheme (such as Tir Gofal) which will specify the restrictions and other conditions necessary to protect the ecology of the site, thus protecting such areas from deterioration during the course of participation in the scheme. The monitoring provisions for this are set out in Section 9.8. 41 42 Nitrate Vulnerable Zones 5.1.63 There are currently two small Nitrate Vulnerable Zones in Wales to protect groundwaters. These are at Dyserth and Trelech in Monmouthshire. As required by the Nitrates Directive (91/676/EEC), the extent of the designations in Wales is kept under review. The current review has indicated that parts of North East Wales and South Wales may meet the criteria for designation as Zones and this will be considered further in the light of the results of the Environment Agency monitoring. 5.1.64 In so far as Wales is concerned, the UK Government and the National Assembly commit themselves to making substantial progress in completing the designation of Nitrate Vulnerable Zones and to make sufficient progress in defining and implementing the binding measures under Annex III of Directive 91/676/EEC by 30 June 2001. European Designations Pre 2000 Objective 5b Area ( European Agricultural Guidance and Guarantee Fund) 5.1.65 This element of the Rural Wales Objective 5b Programme for 1994-99 had the primary aim of furthering job generation and diversification within the Rural Wales 5B area. (See Map 9). 5.1.66 EAGGF projects under Objective 5b could span a wide range of activities including adding value, product research and development, implementing environmentally friendly systems of production, assistance for food initiatives livestock and crop quality, joint marketing, innovation and fostering links between farm tourism, crafts, Welsh food and the environment. LEADER areas 5.1.67 The LEADER Programme for Wales was initially set up in 1994. LEADER I was a new approach to rural development policy that was territorially based, integrated and participative. The programme encouraged innovative grass-roots rural development. LEADER II built upon LEADER I and was an economic development programme which focused on innovation, transferability and the development of transnational links within the European Union. 5.1.68 There are 8 LEADER II groups within Wales (see Map 10). These are:- Antur Cwm Taf/Tywi (ACTT); Antur Teifi; Cadwyn; Cymad; Menter Preseli, Menter Môn, Menter Powys; and South Pembrokeshire Action for Rural Communities (SPARC). Post 2000 Objective 1 5.1.69 The West Wales and the Valleys Objective 1 area is defined in Section 3(2) and shown on Map 11. The area covers 1,312,900 hectares and has a population of 1,907,195. The diverse nature of the area, its economy, its culture and its environment are some of its many attributes that make it unique. However, its remoteness also results in the region being disadvantaged and marginalised from many economic and social opportunities. 43 5.1.70 The area is characterised by: ! ! ! ! ! ! Extremely low and declining GDP per head of population relative to the EU average; Unemployment, especially long-term unemployment at high levels; Declining economic activity rates; High levels of social deprivation; An over - dependence on declining industries; Relatively few dynamic indigenous medium sized businesses with growth potential. 5.1.71 Objective 1 is aimed at promoting the development and structural adjustment of regions whose development is lagging behind. Objective 2 5.1.72 The proposed Objective 2 area is also defined in Section 3(2) and shown on Map 11. Objective 2 supports the economic and social conversion of areas facing structural difficulties. There are four strands to the programme - areas undergoing socio-economic change in the industrial and service sectors; depressed areas dependent on fisheries; declining rural areas; and urban areas in difficulties. In Wales we are focusing on the latter two strands. A major concession secured by the UK Government is that areas which lose their Objective 2 and 5b status will be eligible for transitional funding for up to 6 years. Objective 3 5.1.73 The Objective 3 programme in East Wales (covering the whole of Wales not defined as Objective 1) is intended to help achieve a strong competitive economy by enabling people to reach their full potential and maximise their contribution to creation of wealth. It focuses on four pillars - to build employability, adaptability, entrepreneurship and equal opportunities - and aims to support the adaptation and modernisation of policies and systems of education, training and employment. LEADER Plus 5.1.74 The new LEADER Plus community initiative offers the opportunity to build upon the experience of the Welsh LEADER groups and develop further community initiatives responsive to the needs of rural Wales. This new initiative will complement the mainstream programmes by promoting integrated schemes conceived and implemented by active partnerships operating at local level. 5.1.75 The aim of LEADER Plus is to encourage and support rural actors in thinking about the longer term potential in their area. It seeks to encourage the implementation of integrated, high quality original strategies for sustainable development designed to encourage experimentation with ways of ! ! ! Enhancing the natural and cultural heritage Reinforcing the economic environment, in order to contribute to job creation Improving the organisational abilities of their communities 5.1.76 Unlike LEADER I and II, all rural areas will be eligible under LEADER plus. However to concentrate community resources on the most promising proposals and to give them maximum leverage some of the funding will be limited to certain rural territories following an open and rigorous selection procedure. 44 45 46 47 Welsh Rural Infrastructure 5.1.77 Map 12 shows some of the infrastructure problems facing Rural Wales with mountain ranges providing major blocks to the transportation links. This increases the cost of marketing produce for people in the remote western part of Wales. It is particularly noticeable with perishable products such as milk, where dairy farmers in the more remote parts of the country are having to pay increased collection costs as well as having to increase their storage capacities. The poor infrastructural links also have a knock on effects for diversification projects where for example home butchery could form an important route for processing and marketing produce. Some of the actions in the Processing and Marketing measure will be aimed at providing greater opportunities for local processing and marketing of products, Transport Road Network 5.1.78 Rural Wales is served by a number of strategic highways. The report on the review of the Welsh trunk road programme "Driving Wales Forward", published in July 1998, includes details of key criteria to be used in assessing options for addressing the problems on the road network in the overall context of the delivery of an integrated approach to transport. It highlighted the order of priorities for future expenditure on the trunk road programme and identified a new core network of nationally important strategic trunk roads to help determine future priorities for investment, both in terms of maintaining and improving the network. This core network comprises the key east -west links in North and South Wales (A55, M4 and A465) the A483 and A487 in North Wales, the A4076, A40 and A477 in South Wales and the A470 linking North and South Wales. 5.1.79 The report concluded that there is no case on either traffic or environmental grounds for major road-building through the heart of Wales. The Assembly's strategy is to bring forward significant improvements in north-south public transport services and for these to be complemented by steady and relatively small-scale improvements to the trunk road network. In this respect, there are proposals to improve the A470 (Lledr Valley - Dolwyddelan to Pont yr Afanc) in the short term trunk road programme. 5.1.80 The report also announced that a study would be carried out to bring forward significant improvements in north-south transport links. The study, encompassing the A470 from Brecon to Llandudno and the A483 and A487 in North Wales is expected to be completed early in 2000. The results of the study will enable the Assembly to take informed decisions on the most appropriate future strategy for the development of roads and other transport modes in those areas. 5.1.81 In North Wales, dualling of the A55 across Anglesey is in progress and due for completion in 2001. In the south, there are plans for a bypass to improve the A40 at Robeston Wathen, and the Carmarthen Eastern Bypass was opened in December 1999. On a wider front access to markets were improved by the completion of the M4 "missing link" at Baglan in 1996; the M4 provides a continuous 200 miles of motorway from Pont Abraham to London. The A483/A55 in North Wales and the A449-M4-A48-A40, A465 and A477 form part of the Trans European Road Network. 48 49 5.1.82 Complementary to the main highway network is the local highway network which is the responsibility of local authorities in Wales. Programmes of selective highway improvements exist, including proposed improvements to the A484/A486 corridor in Ceredigion/Carmarthenshire and A497 in Gwynedd. Rail Network 5.1.83 Rail provision, both in terms of infrastructure and frequency of services, is relatively poor in Rural Wales. Main line services exist along the North Wales coast and through Mid Wales from Shrewsbury to Aberystwyth, and from the South Wales main line northwards through to Shrewsbury. These main routes are supplemented by more local services along the west coast from Aberystwyth to Pwllhelli and from Llandudno to Blaenau Ffestiniog. The EU basic rail network includes all main rail links across Wales. Access by rail to Rural Wales needs to be improved by improving the infrastructure and regularity of services including basic improvements to stations such as raised platforms to enable better disabled access. 5.1.84 Substantial improvements have been made in parts of Rural Wales such as a £1.3 million investment to improve the Cambrian Main Line from Aberystwyth to Shrewsbury. The Assembly has committed funding of £0.5m in 2000-01 to upgrade the line speeds to 90 mph on the North Coast main line, and under the Transport Grant scheme can consider further bids for support to make improvements to station and track infrastructure. 5.1.85 Railtrack, which owns and maintains the rail infrastructure network, can also fund necessary improvements. However, its funding decisions favour more commercial routes, and its current priorities for Wales, as expressed by the Network Management Statement for 1999, do not include the South West Wales line, with only limited improvement planned for rural areas in Mid and North Wales. 5.1.86 Though private operators provide services on lines throughout Wales, few in the region are commercially viable, relying heavily on subsidy from Central Government. These subsidy levels will decrease in the period from privatisation to the re-negotiation of franchises by 2004. This acts as an increasing disincentive to the provision of rural services above the level of an operator's passenger service requirement. The Assembly, through consultation, has noted the need for increased regularity of services, and improved local connections for services in rural Wales. It will seek to influence the shadow Strategic Rail Authority, which is responsible for the agreement of the new franchises, to improve rural provision. 5.1.87 With the expansion of rail freight business, in particular to grow markets such as the transport of agricultural produce, there will also need to be support to provide appropriate road/rail and sea/rail freight interchange infrastructure for rural Wales. Railtrack has initiated a study of freight potential in North and Mid-Wales; the results will inform its future infrastructure investment. In South Wales, local authorities are working with the Welsh Development Agency to establish priorities for action. 50 Ports 5.1.88 With its extensive coastline, Rural Wales has four main ports and numerous harbours which provide an important adjunct to its communications potential. Not only do these ports and harbours provide opportunities to develop coastal shipping services, but more importantly, through the ports of Holyhead in Gwynedd, and Fishguard and Pembroke Dock in Pembrokeshire, an ability to exploit the strategic routes that exist to Ireland for the economic benefit of Rural Wales. These ports, which provide an important source of economic activity and employment, particularly within their respective sub-regions, have benefited from differing levels of investment. The partnership with Ireland in the INTERREG programme, and the strategic position of the ports on the main TENS routes through Wales, emphasises the need to improve access for both passengers and freight. This will be further increased by the European policy to develop short sea shipping. 5.1.89 There is scope for significant development of freight facilities in Milford Haven and Pembroke Dock. The Welsh Development Agency is working with the Assembly to establish the potential and priorities for future investment on the South Wales corridor. 5.1.90 At Holyhead, there will need to be infrastructure investment to enable improvement of the link between the port and the rail network to attract additional passenger and freight services. Similarly, there is investment underway at the Port of Mostyn, which again may support further business from rural North Wales. Airports 5.1.91 While there are no airports within the Rural Wales area providing scheduled services, the importance of air transport services is nevertheless fully recognised as an incentive to inward investors. 5.1.92 In the 1998 White Paper "A New Deal for Transport", the UK Government announced that a series of regional air service studies would be undertaken to help inform the development of airports policy for the next 30 years. The Department of the Environment, Transport and the Regions and the Assembly has commissioned a joint study for Wales. The work is exploring the scope for new and enhanced services, both to reflect the potential of the International Airport at Cardiff given increasing congestion of air traffic in South East England, and the possibility for improved services to rural airfields. 5.1.93 The study is to be published in March 2000, and will be open to consultation and scrutiny. It is expected to provide a framework for future investment decisions. The Assembly at that point will be better placed to consider the need for investment to support improved access from rural areas to those airfields identified in the study, and the scope to improve services within Wales, such as linking the North and South. 51 Population and Society in Rural Wales Overall Trends 5.1.94 Rural Wales as a whole has experienced population growth over recent years (see Table 1, which is based on ONS mid year population estimates), both in absolute terms and relative to the rest of Wales (although this is of course not true for all localities, and in particular, for the severely disadvantaged areas - see below). 5.1.95 The age-distribution of the population in Rural Wales is shifting marginally towards the older age groups(see Table 1); there is some evidence that the 65+ age group is increasing disproportionately, but this shift, which is probably a reflection of a trend to retire to rural areas, is contained within the overall relative growth of the rural population. The 15-24 age group in rural areas has suffered a small relative decline, but this could be accounted for by the big increase in full-time educational participation by this age group. Table 1 Rural Wales % 1981 Under 15 15-24 25-34 35-44 45-54 55-64 65 + Total Under 15 15-24 25-34 35-44 45-54 55-64 65 + Total as % of 1981 20 15 13 12 11 12 18 100 18 11 13 13 14 11 20 100 107 Wales % 21 15 14 12 11 12 16 100 19 12 14 14 13 11 17 100 104 1989 Source: ONS Mid Year Population Estimates 52 Population changes in remoter Rural Wales 5.1.96 A more restricted definition of Rural Wales can be adopted, which attempts to identify more precisely the areas where problems of remoteness and/or natural handicap are greatest. The review of the effectiveness of the Hill Livestock Compensatory Allowances scheme, commissioned by the former Welsh Office from the Welsh Institute of Rural Affairs, analysed the "Severely Disadvantaged Areas" (defined in Section 6.4). The analysis was restricted by the fact that the most recently available Census data is for 1991. 5.1.97 Table 2 shows the estimated overall total change in resident (present and absent) population between 1981 and 1991 in the SDA. The comparison is made on the basis of the main population base statistic calculated for the 1981 census; the 1991 calculation included wholly absent resident households, which were not accounted for in 1981, so the extent of the decline shown is probably an underestimate. Table 2 000’s Male Female Total Welsh SDA: Population Base 1981 356.8 372.2 729 1991 342.1 359.4 7015 % Change -4.1 -3.4 -3.8 Source : Welsh Institute of Rural Studies 5.1.98 These broad aggregates show an overall loss of about 4 per cent in the SDA population between 1981 and 1991. A more detailed examination of resident population by age is shown in Table 3. This demonstrates a continued loss of population within the younger age groups, and allows net migration by age group to be calculated. The largest net loss was those aged 10-19 years at the time of the 1981 census, with almost 15,000 fewer people (58 per cent of which were male) in the group aged 20-29 in 1991. Over 3,000 people were lost in the next category, in their 20s in 1981 and aged 30-39 by the 1991 census. Table 3 Welsh SDA: Residents by age 1981-1991 (000s) 1981 94.6 117.4 95.8 98.3 80.8 88.1 80.6 54.7 18.3 2914.4 % 4 5 4 4 4 4 4 3 1 1991 96.6 92.4 102.8 92.7 96.3 78.3 76.8 55.3 25.3 2866 % 4 4 5 4 4 4 4 3 1 % Change 2.1 -21.3 7.3 -5.7 19.2 -11.1 -4.7 1.1 38.3 -1.7 Age Group 0-9 10 - 19 20 -29 30 - 39 40 - 49 50 - 59 60 - 69 70 - 79 80 and over Total Source : Welsh Institute of Rural Studies 53 Population migration and the Welsh language and culture 5.1.99 Maps 13 and 14 show rural out migration and the proportion of the population who speak Welsh. Map 14 shows that the highest proportion of the Welsh speakers are in the more remote western part of rural Wales; these areas are also shown as having some of the highest out migration rates. 5.1.100 Holiday areas such as Ynys Môn, which exhibit net in migration into a strongly Welsh speaking area, could lead to a dilution of the Welsh culture. Areas like this can also have a strong cultural split between Welsh speaking families and 'incomers'. In-migration can also lead to problems such as inflated house prices. 5.1.101 The Welsh language is an important component of life throughout Wales, not just rural areas. Many public bodies have, or are in the process of, producing schemes to encourage and promote greater use of the Welsh language. All strands of rural development must help to foster the language by focusing on the indigenous needs of local communities. 5.1.102 While urban residents take access to a wide range of cultural activity for granted, many parts of rural Wales are too remote to benefit from the cities' and larger towns' cultural institutions and the sometimes substantial range of activities and opportunities which they offer. Even the basic core provision, where it exists, is small and provides a limited range of activities. Also, rural communities tend to be more resourceful and self-reliant in attempting to meet their own perceived cultural needs and aspirations. It is often not a lack of vision or motivation that frustrates further activity but inadequate physical resources, the shortage of management and specialist skills, and the low population base that undermines financial viability. 5.1.103 Action and funding support by local authorities and the Arts Council for Wales are attempting to redress some of the deficit in cultural provision. However, financial constraints mean that demand outstrips supply with services and support being cut back in many areas. 54 55 56 Rural Stress 5.1.104 The countryside has faced and continues to face a challenging time and employment opportunities have changed dramatically, particularly those related to farming and associated industries. As a consequence stress and anxiety are as common as in many urban areas. The extent of deprivation and poverty, the relative isolation of many rural people and problems accessing help and support are important factors explaining the incidence of rural stress. Information and Communications Technology (ICT) 5.1.105 The benefits which Information and Communications Technologies bring are a vital component of economic and social development. Such benefits have the potential to make a significant difference to the prosperity of rural communities by raising the quality of life, employment opportunities and business activity. New technologies can help to counter the effects of peripherality and create new job opportunities. Some rural businesses are already embracing the benefits of ICT, but many others continue to be either unwilling or unable to invest in the technology to enable them to compete effectively in an increasingly competitive market. 5.1.106 New communications technologies clearly have the potential to overcome some of the constraints imposed by distance and poor transport links in rural areas of Wales. Virtually the whole of Wales is covered by the BT network but some parts of rural Wales do not have access to higher bandwith services and applications such as ISDN2. These remoter regions have not benefited to the same degree from substantial investment as have many urban areas in the south. Topography has limited the coverage of the cellular network, whilst population sparsity restricts market interest in cable investment. 5.1.107 These limitations partly explain the limited take up of the technologies. Wales as a whole lags behind in the usage of most technologies and applications, only ranking higher than Northern Ireland within the United Kingdom. Penetration of mobile telephones is the lowest in the UK, with only 76% of companies using such devices, compared to 89% in London (Source: Moving into the Information Age, Information Society Initiative, Department of Trade and Industry, 1999) The region has the second lowest penetration of external e-mail in the UK, and the proportion of companies connected to the Internet is below that of all UK regions except Northern Ireland. There is also relatively low take-up of ICT in homes in rural Wales. 59% of the working age population in rural Wales do not use computers regularly (Source : Future Skills Wales, 1998). 5.1.108 There is a strong divide between ITC 'haves' and 'have-nots' Many companies have not embraced ICT, but those that have the technology appear to be using these. Local Area Network penetration in businesses is low but those with LANs and e-mail systems are using them in advanced ways. Education and skills 5.1.109 Many young people and adults in rural areas - particularly the more peripheral parts of West Wales - do not fulfil their true potential. Among the nine unitary authority areas classified as rural, the proportion of adults with no qualifications is highest in Gwynedd (30%), Anglesey (27%) and 57 Pembrokeshire (23%). These figures compare with a Wales average of 22% and an England average of around 18%. Overall Wales lags behind other parts of the UK and overseas competitors in developing basic and intermediate skills, and, according to the 1998 Future Skills Wales survey, 47% of the working age population in rural local authority areas had not been involved in any training in the past year. 5.1.110 Most rural areas compare favourably with other parts of Wales in terms of attainment at school. Seven of the nine rural areas have higher than average percentages of 15 year-olds achieving grades A* to C at their GCSEs in core subjects in 1998. Over all rural authorities, 36% had achieved this standard compared to a Wales average of 34%. Relatively high proportions of pupils then leave school for higher education, but this difference is less marked among the resident working population. In the predominately rural Training and Enterprise Council areas of North West Wales, Powys and West Wales (before boundary changes in 1996), the proportion of people of working age with a degree ranged from 8 to 11 per cent compared with a Wales average of 10 per cent (Source: 1995/96 Training and Education Survey). These comparisons need to be seen in the context of Wales' overall relatively low educational attainment compared with other parts of the UK. 5.1.111 Future Skills Wales 1998-2007 was a project commissioned by a broad partnership of public and private sector bodies to identify and analyse the skills needed by the Welsh economy. The project identified a problem with the out-migration of young and qualified people, skill shortages in trying to fill vacancies and a shortfall between some employers' perceptions of their workers' skills and their business needs. The project forecast that there will be fewer agricultural proprietors, agricultural labourers and low-skill occupations but increased employment in management and the service sector. Basic IT skills were identified as becoming increasingly important. Access to Rural Services 5.1.112 Many rural communities are losing their basic services from the village school, shop and post office to the local bus service, community centre and GP surgery. Gaps exist between the level of service provision and the actual needs of rural communities. The wide-ranging decline in service accessibility has arisen for financial reasons which have impacted on public, private and voluntary sector service providers. In sparsely populated areas the small number of service users means that there is rarely scope for economies of scale whilst at the same time services face higher costs, particularly for transport. Poverty presents additional problems for a proportion of rural residents who find it particularly difficult to gain access to the services they need. Data collected by Oxford University in preparing a new Index of Deprivation for Wales show that, for the vast majority of means tested benefit claimants in rural wards, the nearest large food shop is over 6 km away (all Wales average 3.3 km) while the doctor's surgery is likely to involve a journey of over 4 km. 5.1.113 Access to rural services needs to be improved by building on established good practice. There is considerable scope for expanding the co-ordination and integration of rural services to maximise both the use of resources and the quality of service delivery. There is scope for strengthening liaison and cooperation between public, private and voluntary sector providers, including the development of multipurpose community facilities and the co-location of services. 58 Economic position of rural Wales Overview 5.1.114 Probably the most fundamental indicator of the economic performance of a region is Gross Domestic Product (GDP) per head. The most recently available information is shown in Table 4. 5.1.115 Table 4 shows that the former counties of Dyfed, Powys and Gwynedd have levels of both GDP per head and Household Disposable Income which are considerably lower then for the UK as a whole. In turn, Dyfed, Powys and Gwynedd have GDP per head which is considerably lower than that for Wales as a whole. However, the position in respect of Household Disposable Income, which includes pensions and social security payments, is reversed, with higher figures in Dyfed, Powys and Gwynedd than for Wales as a whole. 5.1.116 The low GDP per head figure is partly explained by the higher than average number of pensioner households. Net out-commuting is a further contributory factor. The data in Table 4 suggests that taken together, these factors may account for around 4% of the 10-11% gap in GDP per head between rural Wales and Wales as a whole. The remaining gap must be explained not by differences in unemployment, which are relatively minor, but by differences in activity rates and productivity. Table 4 Gross Domestic Product and Income by County, 1995 GDP / Head GDP / Head Household Disposable Income UK = 100 91.7 95.9 93.2 91.1 100.0 Unemployment Rate Net In -commuting Persons over Pensionable Age % 22.1 22.8 22.3 19.9 18.2 £ Dyfed & Powys Gwynedd Dyfed, Powys & Gwynedd Wales UK Source : Regional Trends UK = 100 72.4 76.2 73.7 84.3 100.0 % 7.7 10.2 8.6 8.8 8.3 % -2.7 -0.4 -1.9 0.4 - 7,384 7,773 7,519 8,601 10,199 59 5.1.117 In fact, the activity rate in Rural Wales is around 2.0% above the average for Wales as a whole (but about 3% below the GB average). In round terms, therefore, productivity in Rural Wales, measured in terms of output per worker in employment, lies around 8% below the average for Wales as a whole, and this is the most important single explanation of the overall gap in GDP per head between rural Wales and Wales as a whole. 5.1.118 Part-time work is more common in rural Wales. However, it appears that this explains only a small part of the productivity differential, which is to a greater extent the result of the job mix in rural areas. 5.1.119 It should be noted that, whilst inactivity does not play a significant part in explaining the gap between GDP per head in rural Wales and GDP in Wales as a whole, it does not follow that it is irrelevant in explaining the gap between rural Wales and Great Britain (see Table 11 below). 5.1.120 Analysis at the level of Wales as a whole has indicated that the major reason for the lower overall level of productivity in Wales compared with the UK as a whole is the mix of jobs, rather than lower productivity in the same kind of job. There must be a very strong presumption that that analysis holds for rural Wales. Chart 1 30 Percentage of Employee Jobs 27 22 25 20 15 10 5 0 15 9 8 7 6 4 Public admin, health, education Finance business activities Manufacturing Construction Agriculture etc Distribution hotels, catering Other Services Notes: 1. Rural Wales as defined by new unitary authority areas. Source: Labour Force Survey. Industrial structure 5.1.121 Perhaps contrary to expectation, agriculture is now only the fourth largest employer in Rural Wales (see Chart 1), accounting for around 9% of employment (including self-employment). 5.1.122 The relative decline of agriculture and forestry as a source of employment in Rural Wales is an established trend, as is the growth in employment in services (see Chart 2), which has more than offset the decline in agriculture. 60 Transport comms Chart 2 Employment in Gwynedd, Dyfed and Powys Agriculture,1981 = 100 300 250 200 150 100 50 Services: private sector Services: public sector Manufacturing Agriculture Construction Energy and Water 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 0 Notes: "Services: private sector" is used as a shorthand approximation for distribution, hotels and catering, banking, finance and insurance, transport and communications, and other service industries. "Services: public sector" is used as shorthand approximation for public administration, education and health. Source: Annual Employment Survey and National Assembly calculations. 5.1.123 A more detailed analysis of employee jobs by industry is shown below. However, this analysis drawn from the Annual Employment Survey excludes self-employment (and for this reason, results for agriculture, an industry dominated by self-employment, have been excluded). 5.1.124 Perhaps the most striking feature of the Annual Employment Survey data is the extent to which the industrial structure of rural Wales (excluding agriculture) mirrors that of Wales as a whole. 61 Industrial Distribution in Rural Wales 5.1.125 Table 6 provides an indication of the distribution of industries across the nine unitary authorities identified with rural Wales. It should be noted that as the data is from the Annual Employment Survey, self-employment is not covered. For this reason, agriculture, which has a very high proportion of selfemployment, has again been excluded from the analysis. 5.1.126 It can be seen that the contribution of production industries (mainly manufacturing, but with a minor contribution from energy and water supply) varies significantly. The contribution of these industries to total employee jobs ranges from 26% in Powys, to only 5% in Conwy, compared with an average for the nine authorities of 15%, and for Wales as a whole of 23%. 5.1.127 The contribution of distribution, hotels and restaurants varies from 33% in Conwy to 17% in Carmarthenshire, compared with an average for the nine authorities of 24%, and for Wales as a whole of 23%. Factors influencing this distribution include the degree of dependence on tourism, and the suitability of the area in question as a base for distribution activities. 5.1.128 The other main source of variation across the authorities is in public administration, education and health - mainly the public services. The dependency of certain areas on these services is apparent, with the highest contribution to total jobs being 47% in Carmarthenshire, 43% in Denbighshire and 41% in Ceredigion. 62 Table 5 Description (92 classification) Health and social work Retail trade, except of motor vehicles Education Hotels and restaurants Public admin/ defence; compulsory SS Construction Other business activities Wholesale trade/ commission trade, etc. Recreational, cultural and sporting Sale, maintenance/ repair motor vehicles Land transport; transport via pipelines Manuf food products and beverages, tobacco products Post and telecommunications Manuf fabricated metal products, etc. Manuf machinery and equipment nec Financial intermediation, etc. Manuf office machinery & computers, electrical machinery/apparatus nec Manuf motor vehicles, trailers, etc. Activities membership organisations nec Real estate activities Other service activities Manuf apparel; dressing/dyeing fur & tanning/dressing of leather, etc. Manuf rubber and plastic goods Supporting/ auxilliary transport, etc. Publishing, printing, repra recorded media Electricity, gas and water supply Manuf furniture; manufacturing nec Manuf medical, precision instruments, etc. Mining and quarrying Manuf other non-metallic products Manuf basic metals Manuf coke, refined petroleum products & chemicals/chemical products Computing and related activities Renting machinery/ equipment, etc. Manuf wood/ products/ cork, etc. Manuf radio, tv/ communications equipment Manuf textiles Research and development Manuf pulp, paper and paper products Insurance and pension funding, etc. Sewage/ refuse disposal, sanitation, etc. Forestry, logging, etc. Act auxilliary financial intermediation Manuf other transport equipment Recycling Fishing, operation fish hatcheries/ farms Agriculture, hunting, etc. Rural Areas 1 Employee jobs (000s) Percentage 46.3 31.3 23.9 23.8 19.2 15.9 13.6 8.9 8.0 7.1 6.4 5.4 4.3 4.2 4.0 3.9 3.4 2.7 2.6 2.5 2.4 2.3 2.2 2.1 2.0 2.0 1.9 1.8 1.7 1.7 1.5 1.4 1.4 1.3 1.2 1.1 0.9 0.9 0.9 0.9 0.8 0.7 0.7 0.1 0.1 0.1 n/a 17.0% 11.5% 8.8% 8.7% 7.0% 5.8% 5.0% 3.3% 2.9% 2.6% 2.4% 2.0% 1.6% 1.5% 1.5% 1.4% 1.3% 1.0% 1.0% 0.9% 0.9% 0.8% 0.8% 0.8% 0.7% 0.7% 0.7% 0.7% 0.6% 0.6% 0.5% 0.5% 0.5% 0.5% 0.4% 0.4% 0.3% 0.3% 0.3% 0.3% 0.3% 0.3% 0.3% 0.0% 0.0% 0.0% n/a Wales Percentage 14.3% 10.2% 7.7% 5.9% 7.4% 4.8% 6.4% 3.3% 2.6% 2.3% 2.0% 2.1% 1.6% 2.0% 1.2% 1.7% 1.4% 1.5% 1.0% 0.8% 0.9% 0.8% 1.5% 0.8% 0.9% 0.6% 1.5% 0.8% 0.4% 0.7% 2.2% 1.3% 0.5% 0.6% 0.4% 1.8% 0.5% 0.2% 0.8% 0.6% 0.4% 0.1% 0.6% 0.1% 0.0% 0.0% n/a Total 272.5 100.0% 100.0% Notes: 1. Rural areas are defined here as the unitary authorities of Anglesey, Carmarthenshire, Ceredigion, Conwy, Denbighshire, Gwynedd, Monmouthshire, Pembrokeshire and Powys. 63 Table 6 Wales: Employee Jobs by Industry, PErcentage of Total Jobs 1997 Powys Conwy Anglesey Gwynedd Ceredigion Denbighshire Monmouthshire Carmarthenshire Pembrokeshire Rural Wales WALES 64 5 7 29 41 38 33 Public admin, education and health 43 6 5 5 38 5 Other service industries 11 10 10 4 21 Distribution, hotels and restaurants 4 3 5 5 15 9 5 5 12 14 5 23 Production Construction 33 3 26 4 24 10 4 9 8 5 22 30 6 Banking, finance and insurance Transport and communications 100% 5 5 3 6 31 4 30 34 48 36 80% 60% 8 10 4 23 2 26 10 8 7 4 40% 6 4 28 22 17 3 4 20% 26 24 4 6 4 17 16 15 0 Food processing 5.1.129 Table 7 provides data on the number of jobs in food production and related activities in Wales. It should be noted that the data source excludes plants with employment of ten or less, so the figures will be to some extent an underestimate. 5.1.130 It is noted on page 78 that published studies have estimated "multipliers" in order to help assess the wider effects of the agricultural industry in Wales. The data in Table 7 permits a more direct assessment of such effects. 5.1.131 It is obvious that only some of the jobs in the Table are dependent on Welsh agriculture. A broad estimate might be that around half the total jobs, perhaps 10,000 in total, are generated by activities that use the products of the Welsh agricultural industry. (It should be noted, of course, that agriculture purchases inputs from Welsh industries, so jobs in input-producing activities will also be dependent on Welsh agriculture). Table 7 SIC 92 15810 15132 15820 15511 15512 15330 15960 15120 15131 15111 15841 15710 15612 15980 15310 15892 15850 15320 15842 15520 15870 15862 15513 15611 15201 Various Employment in food production and related activities, Wales 1999 Activity Manufacture of bread, fresh pastry goods and cakes Other meat and poultry meat processing Manufacture of rusks and biscuits, and of preserved pastry goods and cakes Liquid milk and cream production Butter and cheese production Processing and preserving of fruit and vegetables n.e.c Manufacture of beer Production and preserving of poultry meat Bacon and ham production Slaughter of animals other than poultry and rabbits Manufacture of cocoa and chocolate confectionery Manufacture of prepared feeds for farm animals Manufacture of breakfast cereals and cereals-based foods Production of mineral waters and soft drinks Processing and preserving of potatoes Manufacture of other food products not elsewhere classified Manufacture of macaroni, noodles, couscous and similar products Manufacture of fruit and vegetable juice Manufacture of sugar confectionery Manufacture of ice cream Manufacture of condiments and seasonings Production of coffee substitutes Manufacture of other milk products Grain milling Freezing of fish Other Total employment In food processing and related activities as percentage of total employee jobs in Wales Employment 3,899 2,929 1,447 1,374 1,105 1,042 843 830 790 746 675 645 638 392 374 366 350 336 320 200 134 106 80 64 56 236 19,977 2 Source: Welsh Register of Manufacturing Employment 65 Income and wages 5.1.132 The most recent available data (Table 4, above) show that in 1995, Household Disposable Income per head was about 0.6% above the Welsh average in Dyfed and Powys, and about 4.8% above the Welsh average in Gwynedd. However, in all three counties the figure is well below the UK average. More recent results, based on the new unitary authorities, will be published next year. 5.1.133 Data from the New Earnings Survey (Table 8) show that average gross weekly earnings for full-time employees in the nine unitary authorities covering the main areas of rural Wales increased by 4.2% between 1998 and 1999. The comparable figure for the whole of Wales was 2.8% and for GB 4.1%. Over the period from 1996 to 1999 the increase was 13.9% for the nine unitary authorities, and 12.9% for Wales as a whole and 13.8% for GB. In 1999, average gross weekly earnings for full-time employees in the nine unitary authorities was 94% of the figure for Wales as a whole. 5.1.134 The contrast between the picture in terms of Household Disposable Income and that in terms of average wages is explained by a range of factors, including the higher activity rates in rural areas and transfers under the social security system. Table 8 Gross Weekly Earnings, Rural Wales and Wales as a whole - current prices Mean Rural Wales Annual Change Change over Period (%) (%) 7.5 1.7 4.2 Mean Wales Annual Change Change over Period (%) (%) 5.4 4.2 2.8 Mean GB Annual Change Change over Period (%) (%) 4.5 4.6 4.1 1996 1997 1998 1999 (£) 292 314 319 333 13.9 (£) 313.1 330.1 343.9 353.6 12.9 (£) 351.7 367.6 384.5 400.1 13.8 Notes : Full-time employees on adult rates, whose pay for the survey period was unaffected by absence. Source : New Earnings Survey 5.1.135 The relatively favourable position of rural Wales in terms of Household Disposable Income may mask problems of poverty and social exclusion in rural areas. Such problems are likely to be widely dispersed in rural areas, with the result that they may not be fully captured by statistics based on area averages. Ward data on income support claimants and their children, as a percentage of the population shows a number of pockets in rural areas - particularly in the West and North of the country - where this rate is over 23% compared with a Wales average of 17% (Source : Mapping Social Exclusion in Wales, June 1999). This problem can be partially overcome by the use of indicators based on area aggregates, such as the proportion of school children eligible for free school meals. However, the data, shown in Table 9, does little to alter the overall picture painted by Household Disposable Income. It does, however, point to significant variation across rural Wales, with a particularly high value recorded for Pembrokeshire. 66 Table 9 Pupils Entitled to Free Meals 1996/97 - Primary schools Pupils on Roll % Entitled 21 18 20 20 21 23 14 26 13 20 24 Carmarthenshire Ceredigion Conwy Denbighshire Gwynedd Isle of Anglesey Monmouthshire Pembrokeshire Powys Rural Wales Wales Source : Welsh Local Area Statistics 15765 5822 9717 9227 10371 6470 7479 11120 11437 87408 292730 5.1.136 Other measures of well-being also show Rural Wales in a relatively favourable light. Standardised mortality ratios, as shown in Table 10, for instance, indicate that only Carmarthenshire approaches the rate for Wales as a whole. Table 10 Mortality in Rural Wales (Standardised Mortality Ratios Wales, all persons = 100) 1993 - 1997 All Persons Carmarthenshire Ceredigion Conwy Denbighshire Gwynedd Isle of Anglesey Monmouthshire Pembrokeshire Powys Rural Wales Wales 99 84 89 94 92 95 86 91 86 91 100 Source : Digest of Welsh Local Area Statistics 1999 67 5.1.137 Table 11 provides up-to-date activity and unemployment rates for Rural Wales. This confirms that the underlying economic difficulties facing Rural Wales are more those of low productivity and wages than of inactivity or unemployment (which is of course not to deny that there is also scope for action in these areas). However, unemployment and inactivity are problems in particular areas - most notably Anglesey. Table 11 Activity and Employment Rates Activity Rate % Carmarthenshire Ceredigion Conwy Denbighshire Gwynedd Isle of Anglesey Monmouthshire Pembrokeshire Powys Rural Wales Wales GB 76.1 74.2 74.7 76.7 73.6 71.5 81.4 76.6 81.5 76.3 74.1 79.0 Claimant Count % 5.8 3.7 5.3 4.1 5.4 7.8 3.3 5.5 3.3 4.9 5.0 4.1 Note: Claimant count for September 1999 Sources: Labour Force Survey and Department of Employment Economic context in remoter rural Wales 5.1.138 Table 2 above illustrated the population loss that has taken place in the SDA, in contrast with the position in rural Wales more generally. Broad changes in employment status reflect the underlying labour market conditions in the SDA that have prompted this loss in population. Table 12 provides details on economic activity and employment changes between the two censuses. Economic activity rates have declined slightly, from 55 to 53 per cent overall, in line with national trends. The particularly marked decline in male activity has been offset by increasing female involvement in work. Due to differences in approach, an inter-censal comparison in unemployment is not possible. More significantly, however, there has been an absolute decline in the number of employees and self-employed; there has also been a redistribution in the economically inactive so that far more are now classified as either retired or permanently sick. 68 Table 12 Welsh SDA: Economic position of residents aged 16 and over, 1981-1991 1981 563.4 311.7 264.8 46.9 251.8 20.1 25.1 65.7 140.8 1991 566.2 302.8 259.7 43.1 263.4 19.4 55.1 106.2 82.7 Change (%) 0.5 -2.9 -1.9 -8.1 4.6 -3.5 119.5 61.6 -41.3 000s Total aged 16 and over Economically active Employees or self-employed Other economically active Economically inactive Students Permanently sick Retired Other inactive Source : Welsh Institute of Rural Studies 5.1.139 Table 13 focuses on the employed and self-employed, providing a breakdown by age and industrial sector. These figures are based on a 10 per cent sample of census returns, and are therefore a relatively less reliable indicator of changes in the underlying population. As before, it is difficult to report other than highly amalgamated categories of change, due to differences in the way each census report was constructed. Table 13 Welsh SDA: Employed and self-employed residents aged 16 - 65 by age (10 per cent sample), 1981 - 1991 Sector 1981 1991 Change (%) Agriculture 1,204 933 -22.5 Energy 2,932 767 -73.8 Manufacturing 7,390 7,237 -2.1 Construction 2,002 2,127 6.2 Distribution 3,851 4,323 12.3 Transport 1,181 1,071 -9.3 Other Services 7,073 8,249 16.6 Total 25,871 24,952 - 3.6 Source : Welsh Institute of Rural Studies 5.1.140 In aggregate, the most dramatic absolute decline has been in the energy and water sector, where in the 10 per cent sample 2,166 jobs (implicitly, therefore, approximately ten times this number overall) have ceased to exist, mostly among the older age group of the inactive population. This has reflected major restructuring in both sectors associated with the transition to the private sector. In the agriculture, forestry and fishing sector, there were 263 fewer jobs in the 10 per cent sample, accounting for a quarter of all employment in the sector in 1981. Compensating increases have arisen in construction; distribution and catering; and other services. 5.1.141 The latter two categories may reflect greater tourism activity in the 1980s, and it is reasonable to assume that the trend has continued since 1991. Similarly, manufacturing employment (especially in towns outside, but accessible to, the SDA) has grown. 69 Sectoral Position Agriculture 5.1.142 Including subsidies, agriculture contributes around 2% to total Welsh Gross Domestic Product (GDP) and agricultural and forestry land use accounts for 92% of the surface area of Wales. There were 27,937 agricultural holdings in 1997 with the majority of holdings producing lamb, beef and milk. Agriculture also plays a major role in sustaining the rural communities of Wales and in the protection of the landscape, biodiversity, culture and language. An extensive analysis of the current position of Welsh agriculture is provided later in this Section, while details of the measures proposed to address its difficulties are given in Section 9. The Fisheries Industry in Wales 5.1.143 The Welsh fishing industry is by far the smallest national fishing industry in the UK. Approximately 1,000 fishermen are involved in direct fishing activity, with a further 400 working on a part-time basis. The minor role that the Welsh industry holds in relation to the rest of the UK is largely due to its geographical isolation and weak distribution networks. Wales has never developed a strong commercial fishery to supply the UK's main urban areas. 5.1.144 Milford Haven is the only port with a substantial market and is considered the single 'major fishing port' in Wales. Holyhead remains an important landing centre for both finfish and shellfish. There are about 22 other secondary ports and many other very small ports, beaches and slipways where only a few vessels work. The fishery in the central part of the Welsh coastline is predominantly for a wide range of shellfish species taken by local boats close to their home base. 5.1.145 Milford Haven is the main administration port for Welsh registered/licensed fishing vessels. At present, there are 402 under 10 metre vessels and 77 over 10 metre vessels, of which 38 are Anglo Spanish. Landings into Milford Haven in 1997 were valued at around £20 million; total landings throughout Wales (of whitefish and shellfish) were valued in excess of £30 million. By itself, the value of landings do not have a significant impact locally, since around 90% of fish landed is shipped or otherwise transported abroad, primarily to Spain, France, Holland and Belgium. 5.1.146 Although some 27 companies in Wales are involved in fish processing. The majority of the companies are small businesses and the total labour force in the processing industry is unlikely to exceed 250. The main area of activity is in shellfish, particularly mussels. There is virtually no added value income to the local economy from processing. Tourism in Wales 5.1.147 Tourism is an important element in the economy of West Wales, and provides a key source of income and employment, particularly in coastal and rural areas. It also offers an alternative source of income in areas which have been subject to major restructuring. The industry provides a large number of jobs. However, employment is subject to seasonality and low pay levels, which mitigate against tourism as 70 a choice of career except for the very few. 5.1.148 Tourism visitor expenditure to Wales from UK residents and overseas residents is estimated from Regional Trends (which uses figures from the UK Tourism Survey) at over £1.35 billion per annum, or about 5% of Welsh GDP. Additionally, leisure day visits to Wales could account for around another £550 million (UK Day Visits Survey). Employment in tourist related industries in West Wales and the Valleys (includes all hotels, pubs, restaurants and other leisure activities) is around 8% of all employment. In parts of West Wales this rises to over 20%. 5.1.149 The tourism industry itself is undergoing structural change which is likely to continue into the future. Although there are moves to encourage the shift to growth markets like short stay domestic visitors, much of the industry (resorts in particular) still caters for traditional family, main holiday markets which are in decline. Business related tourism and day visitor tourism is becoming more important, which can help to reduce seasonality. However, due to the peripherality of the region, it is difficult to encourage day visitors far beyond the accessible regions close to the main east-west road links along the north and south coasts. As such, it is difficult to open up the more traditional and culturally distinct areas of West and mid Wales to day visitors, many of whom would have to travel more than two hours to reach destinations. Overseas holiday makers to the region are in the main tourists looking for heritage, cultural tradition and landscape. 5.1.150 Tourism helps to support the environment, communities and culture of the region. It provides support for local services and facilities which, without tourism patronage, would not be viable. Forestry in Wales 5.1.151 There are approximately 269,000 hectares of woodland in Wales (13% of the total land area) 235,000 hectares (94%) of which is considered to be productive and, of which, 119,000 hectares (51%) and 116,000 hectares (49%) is private and state owned respectively. 5.1.152 The forest estate in Wales can be broken down into three main groups: large softwood forests (mainly Forest Enterprise and forest investment companies); smaller mixed woodlands (mainly private estate and forest investment), and small mainly broadleaf woodlands (mainly in farm ownership). 5.1.153 The late 1980's and early 1990's saw a renaissance in Britain's forestry industry generating over £800 million of domestic and international investment in wood processing. A substantial investment of approximately £350 million was made in the processing industry in Wales during the same period. 5.1.154 In addition to the major markets for timber (softwood) in the border country, there are a number of smaller sawmills throughout Wales. However, in parallel with the expansion of the major wood using companies, there has been a decline in medium and small-scale wood user companies. The resulting loss of local markets (both hardwood and softwood) has affected many small-scale growers who generally do not produce sufficient quantities to interest the larger mills. 5.1.155 The Forestry Industry Council estimate that nearly 85% of Britain's annual consumption of forest products is currently imported. Some 80-85% of this is softwood (conifer) based and two thirds is in 71 processed or semi-processed form (i.e. value has already been added in the country of origin). 5.1.156 The 1993-1994 Forest Employment Survey found that 4,750 people were directly employed in the forestry and primary wood processing sectors in Wales. Of these 1,200 were employed by the Forestry Commission, 1,100 by private estate owners, 125 by forest management companies, 515 by timber harvesting companies and 1,740 by the wood processing industries. 5.1.157 The 1993/94 survey found that total employment in forestry in Britain has fallen 15% since the 1988/89 Survey. A significant restructuring has occurred within the industry, with increases in the number employed by harvesting and processing activities, as well as in 'other' forest uses such as recreation, conservation and sport. This is a trend that is likely to continue unless there is an increase in the current rate of new plantings. A new Forestry Employment Survey is currently being undertaken. 5.1.158 On the basis of the 1993/94 survey, the industry in Wales represents 14% of the British total (34,820 employed), with 19,410 (56%) and 10,660 (31%) employed in England and Scotland respectively. Of the 11,215 of the workforce employed by the wood processing industry in Britain, 1,740 are employed in Wales (with 6,445 in England and 3,030 in Scotland). 5.1.159 A Fraser of Allander Institute study based on 1984 statistics indicated that for every job in the forest, another 3.7 jobs are created in the wider economy. An up-to-date forestry multiplier study is being undertaken by the Forestry Commission which will quantify the contribution that forestry makes to the economy, both through primary production and through associated and ancillary activities. Manufacturing 5.1.160 In the past, the rural economy has suffered from agriculture's reliance on primary production industries with little value added processing in rural areas. The Rural Partnership's statement - Rural Wales - reinforced the need for added-value processing to be developed near to the production of primary products in rural Wales to create high quality employment opportunities. The end result would be commodities which could be marketed by companies based in Wales as Welsh products. 5.1.161 New industry development needs to be targeted at low bulk, high value-adding manufacturing industries and sectors which can be developed without adversely impacting on the landscape and environment of rural Wales, which is itself an integral component of the rural economy. Focusing on the manufacturing sector is important if the impact of generally higher transport costs, coupled with locational difficulties for businesses in rural areas, is to be minimised. 72 Agriculture in Rural Wales Introduction 5.1.162 Despite a history of decline, agriculture remains of critical importance to Rural Wales. The remainder of the analysis in this Chapter focuses on agriculture. This emphasis reflects (a) the fact that many of the problems faced by rural areas have their origins in the decline of agriculture, (b) the wider significance of agriculture for Wales, which goes beyond its economic contribution, narrowly measured, and (c) the pragmatic consideration that many of the measures available through the Rural Development Plan for tackling the problems of rural areas impact primarily on agriculture. 5.1.163 Agriculture contributes only 2% to total Welsh GDP (including subsidies). However, agricultural land use accounts for around 81% of the surface area of Wales. (The remainder is given over to forestry and woodland - about 12% - and urban and miscellaneous land - around 6%.). Types of agricultural land are shown in Figure 1. Figure 1 Types of Agricultural Land Urban and Miscellaneous Land 8% Forestry and Woodland 12% Sole Rights Rough Grazing 15% Permanent Grass 43% Estimated Common and Rough Grazing 9% Arable Land Woodland on Holdings Other Land on 10% 2% Holdings 1% Source : Agricultural Census 1996 5.1.164 It follows that agriculture's impact on the environment, and therefore indirectly on the economy, is different from that implied by the contribution to GDP (in economic terms, agriculture produces extensive benefits - and disbenefits - which are not captured within the calculation of GDP). These wider effects are discussed in the section on the environmental impact of agriculture, below. 5.1.165 Approximately 77% of agricultural land within Wales lies within the "Less Favoured Areas" (LFAs). Land is designated as LFA under an EU Directive, which provides special measures to assist farming in areas so designated. LFAs have been designated because of the presence of infertile land with limited potential, which produces returns appreciably lower than the national (i.e. UK) average. Land in the LFA can be 73 designated as either in the Severely Disadvantaged Area (SDA) or Disadvantaged Area (DA). About 52% of Welsh agricultural land lies within the SDA, and about 26% in the DA (Map 1 shows the Less Favoured Areas in Wales with both disadvantaged and severely disadvantaged land). Age Structure and Employment In Agriculture 5.1.166 There is an established long-term trend of decreasing employment in agriculture (see Chart 3). 5.1.167 There is also some evidence of an unbalanced age structure amongst principal farmers. In 1997 the average age of principal farmers in Wales was 55, with 66% of such farmers over 50 (source EC Farm Structure Survey). However, there is no evidence of an increase in either statistic since the 1995 survey, although the percentage aged over 50 did increase from 61% to 66% between 1993 and 1995. Furthermore, as the principal farmer is defined as the legal owner, he may not be the active manager of the farm. This may be a partial explanation of the apparently high average age, especially in the case of family farms. Chart 3 Total Employment in Agriculture Full-Time Equivalents, 1977 = 100 100 90 Wales 80 England 70 60 50 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 Source: Digest of Welsh Historical Statistics, Agriculture in the UK, and Welsh Office calculations. 5.1.168 Even if there were a trend towards an increase in average age, this might simply reflect an appropriate response to circumstances within the industry, which are also reflected in the long-run decline in employment. Figure 2 shows the age breakdown in ages of Principal Agricultural Holders in Wales. 74 Figure 2 Age of Principal Farmers / Holders 8000 7000 1997 No. of principle farm holders 6000 1995 1993 5000 4000 3000 2000 1000 0 <25 25-29 30-34 35-39 40-45 45-49 50-54 55-60 60-64 65+ age class Source : EC Farm Structure Survey Agricultural Land Classification (ALC) 5.1.169 Map 15 shows the Climatic Agricultural Land Classification grades within Wales. The differences between mountain areas with poor climatic grading and contrasting low, coastal areas with potentially good climatic grades are clearly visible. 5.1.170 Map 16 illustrates the differences in agricultural land quality throughout Wales, showing how the interaction between topography, climate and soils creates large disparities in terms of agriculturally productive land. 5.1.171 The Agricultural Land Classification system provides a framework for identifying limitations on agricultural land. Climate, soil and all other physical factors, and the interactions between them are taken into account to arrive at a grading between 1 and 5. Grade 1 land is of excellent quality and Grade 5 land is of very poor quality. Land classed as Grade 1, 2, and Subgrade 3a is termed 'Best and Most Versatile'. Such land is considered a valuable natural resource and is afforded statutory protection against irreversible loss to development. The policy exists as a safeguard for agricultural production, but is also consistent with sustainable development and low input or organic farming systems. 5.1.172 There are over 1.6 million hectares of agricultural land in Wales, including common and rough grazing land. Of this area of agricultural land just 0.2% is classed as Grade 1, 2.3% as Grade 2 and 17.5% as Grade 3. Hence 80% of the land in agricultural use is classed as poor quality agricultural land. 5.1.173 The areas where Grade 1 and Grade 2 land occurs are limited to the north-east around Flint and Wrexham, parts of the Vale of Glamorgan and small pockets in South Pembrokeshire and in South Gower. These are the areas where physical characteristics pose little limitation to agriculture. The land is relatively level, rainfall is lower than elsewhere in Wales, and the soils are fertile, deep and well drained. 75 5.1.174 These represent the main arable areas of Wales. Some areas of Grade 1 and 2 land however, have remained in other agricultural uses such as pasture for dairy enterprises, usually as a continuation of local tradition. Grade 3 land tends to be more extensive. It occurs, generally, near to the Grade 1 and 2 land, in the lowland fringes of the country. All of these areas are also the regions where development pressure is highest, increasing the importance of protecting these productive areas as a limited natural resource. 5.1.175 The rest of the country, where gradients are steeper, altitude and rainfall are high and soil types are generally wet or podzolic is classed as Grade 4 and 5. The physical characteristics of these areas are highly limiting. Agriculture is restricted to grazing, typically sheep and beef farming. 5.1.176 In summer, the high altitude, rainfall and poorer soils (see Map 3) which are reflected in the land grade combine to impose severe restrictions on the use of land for agriculture in Wales. Farm Size 5.1.177 Wales had a total of 29,900 agricultural holdings in 1992 which reduced to 27,900 holdings in 1997. This reflects the steady trend in farm amalgamations resulting from the sale of non-viable smaller holdings. The average farm size has risen from 50 hectares in 1992 to 53 hectares in 1997, with a tendency for far larger farms to be found in the upland areas of Dyfed, Gwynedd and Powys (see Map 17). Figure 3 Number of Farm Holdings Year 1992 1993 1994 1995 1996 1997 Number of Holdings 29,903 29,916 29,910 28,076 28,090 27,937 Source : Welsh Agricultural Statistics 76 Average Size of Holdings (ha) 60 50 Area (ha) 40 30 20 10 0 1992 1993 1994 1995 1996 1997 Figures from main farm holdings only Source : Welsh Agricultural Statistics 5.1.178 Figure 3 indicates that smaller farms are being "swallowed-up" by the bigger businesses, with a trend to increasing farm size. This reflects both the pressures for farms to become larger to derive economies of scale and maintain farm incomes and also the economic vulnerability and marginality of smaller livestock holdings. Existing businesses are more able to finance purchase of land than new entrants due to the high capital requirements of starting up in the agricultural industry (in land, stock, machinery, quota etc.). 5.1.179 The trend towards larger hill farms ("ranching") has implications for the environment, (especially vegetation cover, maintenance of field boundaries, and loss of homesteads) and the wider rural economy. 5.1.180 Despite the trend of increased farm size over the five year period from 1992-1997, there are still a significant number of farms attempting to support a family unit when, in theory, the holding is too small to be viable. Map 17 shows the percentage change in average farm size between 1993 and 1997. 77 78 79 80 Land Tenure Table 14 Holdings by tenure, Wales 1997 73% 11% 10% 6% Wholly owned Wholly rented 50% or more owned 50% or more rented Note: Figures are for main holdings only Source: Welsh Agricultural Statistics 1997 5.1.181 Of the total area in agricultural use in 1997, 73% of holdings were owner occupied with the remaining area made up of a mixture of rented and owned (Table 14). The rented land is owned by a mixture of many differing types of owner ranging from large private estates, public utilities, the National Trust, the Unitary Authorities ("Council Small Holdings") to many individual owners of smaller areas. 5.1.182 There has been a long term decline in the area of rented land and this is likely to continue, albeit at a slower rate. 5.1.183 There are considerable regional differences in Wales. Carmarthenshire has the highest proportion of full ownership with 82% of all holdings being wholly owned, compared with North East Wales which has the lowest proportion of wholly owned holdings at 65%. 5.1.184 The fall in tenanted land is in line with the national pattern throughout the UK. Two major factors influencing the trend have been the more favourable tax position of working farmers, and the inflexibility of the agricultural holdings legislation until it was revised in 1995. The recent buoyant market for annual grass keep has also encouraged farmers to let on an annual grazing licence rather than a more permanent basis, with the attendant risk of losing long term control. There is also the inevitable break up of estates, usually at death, when land has to be sold to meet taxation liabilities or to pay out family members. Land is often sold to "sitting" tenants, and thus becomes owner-occupied and lost to the rental system. 5.1.185 Changes in tenancy legislation in 1995 introducing the new Farm Business Tenancy arrangement has given greater confidence to landlords and a willingness to let land and this may slow down the rate of change to owner occupation. Farm Business Tenancies can be for short periods, typically 2-10 years, allowing considerable flexibility for the landlord. A number of landowners are letting on this basis as a short-term measure, whilst waiting to see the outcome of the current period of agricultural policy change. 5.1.186 The legislation does seem to be having a positive effect and the most recent evidence points to more land being let, although normally for only five year terms. The Annual Survey of Tenanted Land for 1997 suggests the area rented under Farm Business Tenancies has increased to about 10% of all rented land. 5.1.187 Reform of the capital gains tax regime in the March 1998 budget, in particular the reduction in tax the longer an asset is held, may encourage landlords to agree extended terms for Farm Business Tenancies. The short-term nature of most Farm Business Tenancies is a particular problem for dairy farmers, as it will not encourage investment in facilities, which in many cases need modernising. 81 5.1.188 The presence of bodies such as the National Trust may slow the trend towards owner-occupancy, but in the long run it is likely to continue. A valuable sector of the industry and traditionally a major source of outside capital will thus be lost, with implications for the supply of farms for young new entrants. 5.1.189 Land sale prices have been buoyant in recent years, despite the problems facing the agriculture industry, with a major factor being the large number of owner occupied family farms with family labour and a sound capital base, in a position to expand further, and the availability of land locally being considered a "once in a lifetime" opportunity. Another factor is that upland and hill farms, traditionally with a shortage of "in-bye" grassland for silage and fattening stock, seem to be keen to acquire lowland type pasture in areas outside the hills. This has been a marked feature in North West Wales, for example, where on Anglesey a significant proportion of the Island is farmed in this way. This has been helped by the high level of subsidies in the uplands, the need for extra land to maintain "extensification" payments, and a buoyant sheep market until the last couple of years. Farm Types 5.1.190 The distribution of the various farm types throughout Wales is illustrated by Figure 4 and Map 18. Of the 27,900 farm holdings in Wales, around 60% are beef and sheep farms and 14% are dairy farms, the remainder being a mixture of horticulture, arable, pigs and poultry et al. Around 56% of the total holdings in Wales are within the Less Favoured Area, including around 60% of Welsh dairy farms. Figure 4 Types of farms in Wales, 1997 6 5 Number of Farms (thousands) 4 3 2 1 Dairy Lowland Mixed Cattle and Sheep SDA Cattle and Sheep DA Cereals Pigs and Poultry Cattle and Sheep Lowland Horticulture General Cropping Specialist Sheep SDA Source : Welsh Agricultural Statistics 82 Specialist Beef SDA Mixed and Other Dairy LFA 0 83 Agriculture's Contribution to GDP 5.1.191 Table 15 illustrates the contribution agriculture makes to the economy on an all-Wales basis. However, in addition to the direct effects summarised in the Table, and as indicated on page 44, agriculture has multiplier effects on other industries. Published estimates suggest that for Wales as a whole, GDP and employment multipliers generally lie in the region of 1.3 to 1.5 (i.e. the figures in the table could be increased by between 30% and 50% to arrive at an estimate of the overall contribution of agriculture to the Welsh economy). Table 15 Agriculture's contribution to GDP, 1997/98 1.8% 1.0% less than 0.1% 53,000 32,100 4.5% 2.7% £18,200 Agriculture's share of Welsh GDP Agriculture's share of Welsh GDP (excluding direct subsidies 1) Agriculture's share of Welsh GDP (excluding direct and indirect subsidies 1) Workforce in agriculture (including part-time and seasonal) 2 Workforce in agriculture (full time equivalents, estimated) 2 Agriculture's share of employment in Wales 2 Agriculture's share of employment in Wales (full time equivs., est.) 2 Labour productivity: gross agricultural product per full time equiv. Notes: Source: 1. Direct subsidies of £213m and indirect support estimated at £246m. 2. 1996 data. Farm Incomes in the UK and National Assembly estimates. 5.1.192 These figures also exclude consumption effects (that is, expenditure within Rural Wales arising from the incomes generated by agriculture), so in this respect they underestimate the economic impact of the industry. On the other hand, it should also be noted that multiplier analysis almost certainly results in exaggerated estimates of the effects on related industries. Economies adjust to declines in agriculture, and new activities replace, to a greater or lesser extent, those that are lost. Academic research has confirmed that multiplier-based forecasts have tended to produce an upward bias in estimates of the impact of changes in agricultural output. 5.1.193 Agriculture's contribution to GDP and employment is of course relatively more significant in Rural Wales. The Labour Force Survey shows that agriculture accounts for around 9% of all jobs in the nine unitary authorities that cover most of rural Wales. No breakdown of GDP is available, but the relationships that exist at the level of Wales as a whole suggest that the contribution of agriculture to GDP in rural Wales would be significantly less than the contribution to employment. 84 Chart 4 Total Income from Farming 1977 = 100 120 100 80 Real Terms (RPI Deflator) 60 40 Relative to GDP 20 0 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 Source: Farm Incomes in the UK, and Welsh Office calculations. Note: Total Income From Farming (TIFF) is a National Accounts-based measure of income gained from farming. It represents the return to a wide entrepreneurial group (farmers, partners, directors and spouses if working on the farm, and family workers). It comprises the compensation to these people for their manual and managerial labour plus the return on their capital. Because no account is taken in the measure of the number of people benefiting from TIFF, it cannot be taken as an indicator of income per capita. Agricultural Incomes 5.1.194 There is a long-run trend for total income from farming in Wales to decline, both in real terms and as a share of Gross Domestic Product (GDP) (see Chart 4). 5.1.195 This is a common feature of developed economies. As people's incomes rise, they generally devote a decreasing proportion to food. In addition, technological developments reduce the costs of producing agricultural products - and in particular the amount of labour required. The result is a decline in the relative price of agricultural products, and in total income from farming. 5.1.196 Income from farming is volatile, reflecting both the fact that it incorporates an element of profit, and agriculture's susceptibility to changes in the exchange rate and in natural factors. This makes it unwise to place great emphasis on short run movements. 85 Net Farm Income by Farm Type 5.1.197 Table 16 shows the change in Net Farm Income as an index relative to the level in 1989-92 (=100) : Table 16 Farm Type Dairy Cattle and Sheep (LFA) Cattle and Sheep (Lowland) Farm Incomes in Wales 1992/93 1993/94 1994/95 1995/96 1996/97 1997/98 1998/99 (p) 120 140 92 124 102 95 81 97 76 137 198 118 121 155 85 87 93 22 60 55 5 Indices of Average Net Farm Income per Farm (1989/90-91/92 = 100); p = provisional Source : Farm Incomes in the UK 5.1.198 The results above indicate declining incomes since 1995/96, with major falls for all sectors forecast for 1998/99. Farming is currently in difficult circumstances, with most businesses witnessing large falls in profitability, and some expecting to make a loss. The main short-term reason for this low profitability is the strength of sterling against other EC currencies. This increases competition on UK markets from imports, reduces the competitiveness of UK exports and reduces the value of subsidies received as these are set in Euros. 5.1.199 Several other major factors have also affected profitability. These include the BSE crisis and the subsequent export ban on British beef, increased welfare requirements and controls on live exports, and increasingly high standards demanded for products generally. The lifting of the beef export ban is a welcome development but it will take a long time and considerable effort to regain confidence and rebuild markets. 5.1.200 Increasing pressure to improve welfare of stock will continue with campaigns against battery hens, for example. Meeting these requirements has a high capital cost and often less intensive housing also reduces income. This need for capital expenditure on many farms, not only to modernise buildings and equipment, but also to cope with increasingly stringent pollution control, has coincided with a time of generally low incomes. 5.1.201 These declines in farm-level incomes have also been reflected at the aggregate level. Total income from farming (which represents total income to those with an entrepreneurial interest in farming) has fallen sharply over the last three years (see Table 17). 86 Table 17 Total Income from Farming Current Prices £m 167 172 183 250 321 313 313 210 114 Annual Change % 3 6 37 28 -2 0 -33 -46 1990 1991 1992 1993 1994 1995 1996 1997 1998 Source : Welsh Office Statistics Note : Provisional estimates; SNA methodology Dependence on subsidy 5.1.202 Under the Common Agricultural Policy, farmers benefit from both subsidy payments made directly to them, and from various market support mechanisms including intervention buying, export subsidies and import levies. 5.1.203 In 1998/9, the most recent year for which data is available, total direct subsidy payments in Wales were around £213 million. The Sheep Annual Premium Scheme accounted for 46% of total direct subsidy, the Hill and Livestock Compensatory Allowance Scheme for 20% and Suckler Cow and Beef Special Premium Schemes together for 27% (Payments under the HLCA scheme were unusually large in 1998/99 due to the impact of special measures related to the BSE crisis). 5.1.204 The production-related nature of the subsidy regime in the past has also been implicated in pressures to intensify livestock production, with associated environmental costs. Such effects are discussed further in the section on the environmental impact of agriculture on page 103. 87 5.1.205 Table 18 illustrates the dependency of farmers upon subsidy, with direct subsidies alone accounting for over 75% of total cash income and over 148% of net farm income in 1997/98. Table 18 Subsidy 1997/98 £16,900 £16,000 £32,900 £11,400 148 289 £22,500 75 146 All Farm Types; per farm Direct Subsidy Indirect support (est.) Total support (est.) Net Farm Income direct subsidy as % total support as % Cash Income direct subsidy as % total subsidy as % Source : Farm Incomes in the UK and National Assembly calculations Notes : 1. Information relates to farms of a size greater than 8 ESUs, which are conventionally deemed to be full-time. 2. Direct subsidies are those paid directly to the farmer. Indirect support arises from market measures. 3. Data on Net Farm Income, Cash Income and Direct Subsidies are obtained from the Farm Business Survey (FBS). Data on Indirect Support is estimated on the basis of the output attributable to farms covered by the FBS. Components of agricultural output Recent Trends 5.1.206 Welsh agriculture is dominated by livestock and milk production for the purpose of serving the fresh meat and dairy sectors. The nature of the landbase is not favourable to the widespread production of arable crops which can more efficiently be grown in the lowland, easterly regions of the UK. 5.1.207 The main components of agricultural output in Wales are shown in Table 19. Total livestock output, which accounts for around half of output, is dominated by beef and sheep, and these are of roughly equal importance. Total livestock products are dominated by milk and milk products, which account for about 90% of the overall figure for products. 88 Table 19 Product Agricultural Output in Wales (1998) Value (£ millions) Share of total value (%) 32 21 26 6 5 2 2 2 1 1 1 1 1 100 Milk and milk products Finished cattle Finished sheep and lambs Store cattle and calves Poultry Pigs Total cereals Fruit and vegetables Potatoes Eggs Wool Store sheep and lambs Total other crops Total Source: Welsh Office Statistical Release 1998 315.2 206.3 261.6 59.5 53.8 18.1 16.3 15.3 14.3 12.5 7.8 7.7 6.7 995.1 5.1.208 The constraints placed on the industry by the quota system, and increased economic pressures facing smaller producers have led to a reduction in the number of dairy cows over the last decade. Conversely there has been an increase in the beef herd and in sheep numbers, at least until the severe economic difficulties experienced in the latter years of the decade, probably reflecting the incentives inherent in the current subsidy regime (see Table 20). Table 20 Livestock numbers (000) Dairy herd 1990 1991 1992 1993 1994 1995 1996 1997 327 317 307 304 308 294 297 276 Beef herd 204 208 214 217 219 219 219 219 Breeding ewes 5,235 5,223 5,304 5,390 5,428 5,555 5,444 5,505 Source: Welsh Agricultural Statistics 1990-1998 89 Dairy Farming 5.1.209 Dairy farming tends to be concentrated in the South and West (64% of dairy holdings) and North East (17%) of Wales, where climate, relief and soils are more favourable to good quality grass production. The total number of dairy cows in Wales has decreased over the last five years (see Table 21) reflected in the declining number of dairy herds (Figure 5). This reduction can in part be attributed to smaller dairy farms becoming less viable. In other cases, the need for substantial capital investment to replace worn out equipment in today's unpredictable economic climate can be the reason for discontinuing dairy farming. Table 21 Year 1992 1993 1994 1995 1996 1997 Figure 5 Total Dairy Herd in Wales Number of Dairy Cattle 306,400 303,880 308,100 294,000 296,400 280,500 Number of Holdings with Dairy Herds 7 Number of Dairy Cow Herds (thousands) 6 5 4 3 2 1 0 1992 1993 1994 1995 1996 1997 Figures include main holdings only 5.1.210 The average herd size has increased from 51 cows in 1992 to 57 cows in 1997. This herd size varies considerably between areas, with larger herds averaging 71 cows found in Pembrokeshire. Map 19 shows the number of dairy herds in 1997. 5.1.211 Many dairy farms are heavily reliant on agricultural contractors for grass and maize silage making in order to reduce capital investment and fixed costs. The high rainfall in Wales contributes to a shorter 90 91 grazing season, resulting in higher winter fodder costs, higher housing costs and a greater chance of pollution problems resulting in higher expenditure on farm waste control.. 5.1.212 Such problems are emphasised on smaller dairy farms in more remote areas, where transport costs of feed, straw and milk collection also contribute to lower gross margins per cow. Recent Trends In Dairying 5.1.213 Figure 6 indicates a period of erratic dairy farm incomes in Wales since 1993, with a large fall in profitability in real terms in 1998 due in particular to the strength of sterling against other EC currencies, and the consequential effect on milk price. Figure 6 Net Dairy Farm Income in real terms 1993 to 1998 1 120 Index of NFI (1989-1992 =100) 100 80 60 40 20 0 1993 1994 1995 1996 1997 1998 (forecast) 5.1.214 The fall in milk price of around 20%, as shown in Figure 7 below, can be explained in more detail as follows: ! ! ! ! strength of sterling making imports cheaper; GATT regulations reducing import tariffs and subsidy on exports; reduction in intervention prices for butter and skimmed milk powder; end of the period when high prices were offered to attract farmers and secure market share following deregulation of milk marketing. 5.1.215 The lower prices now prevalent are likely to remain at present levels as long as sterling maintains strength against other currencies. The fall in prices has approximately halved profit per litre and therefore per cow. There is an unresolved debate within the industry as to whether changing to high forage low yield systems will now be the most profitable option, or whether seeking higher yields whilst containing costs using cheaper concentrate feed presently available might be the best way forward. 1 WOAD, 1997, Agricultural Incomes in Wales 1997, WOAD Press Release 92 Figure 7 Average Milk price in pence per litre 1 - year ending April 1999 27 Pence per Litre 25 23 21 19 17 15 1995 1996 1997 1998 1999 5.1.216 Small scale milk producers have been hit by the introduction of fixed charges for daily collection regardless of herd size, together with higher prices being offered for larger volumes of milk. Collection charges have meant small farms in particular having to invest in extra storage facilities to allow alternate day collection. Many smaller dairy farms have also historically suffered from poorer milk quality, which is now penalised more heavily - up to around 2 to 3 pence per litre. 5.1.217 Profits on dairy farms will also be reduced by the impact of BSE on both calf and cull cow prices. 1. ADAS Milk Cheque Costings 93 Lamb Production 5.1.218 The breeding flock in Wales has increased from 5.31 million in 1992 to 5.49 million in 1997 (see Table 22). The average flock size in Wales was 351 breeding ewes (Figure 8) in 1997 - one third of all flocks had less than 100 ewes accounting for around 5% of the overall national flock. In contrast, 23% of holdings had flocks of 500 ewes accounting for two thirds of the national flock. Map 20 shows sheep numbers in 1997. However, the overall number of sheep flocks in Wales has decreased over the last 5 years (see Figure 9). 5.1.219 Lamb production in Wales is concentrated in the mountain and upland areas of North and Mid Wales where land use is more restricted to rough grazing, and with more limited opportunities to conserve winter forage. The harsh environment dictates the breed of ewe capable of thriving in these areas, and Welsh Mountain and Speckle-faced ewes are widely used. This in turn means that mountain and upland farms produce lighter lambs than those in lowland areas. Such lighter lambs tend to be in less demand from butchers and supermarkets in the UK due to their smaller size and poorer conformation. This puts a increased emphasis on the importance of European markets where the demand for smaller, leaner animals is greater. Table 22 Year 1992 1993 1994 1995 1996 1997 Figure 8 Total Number of Breeding Sheep (000) Number of Breeding Sheep 5,305,467 5,398,856 5,428,334 5,554,752 5,544,293 5,487,631 Average Size of Breeding Sheep Flock 400 350 300 250 200 150 100 50 0 Number of Breeding Sheep 1992 1993 1994 1995 1996 1997 Figures from main holdings only 94 Figure 9 Total Number of Holdings with Breeding Sheep 18 16 14 12 10 8 6 4 2 0 Number of Holdings ('000) 1992 1993 1994 1995 1996 1997 Figures from main holdings only Source for all charts : Welsh Agricultural Statistics and Local Area Statistics 5.1.220 The growing season on mountain and upland farms is shorter, and when combined with generally poorer quality grazing can mean that a high proportion of lambs cannot be finished on the original holding. Many farmers therefore have to rely on selling lambs as stores to lowland farmers for finishing, preventing them from capitalising fully on the value of the finished product. Many have to away winter ewe lambs. 5.1.221 Lowland farmers benefit from this situation through extra income from utilising grazing over winter and finishing store lambs in autumn/winter without the risks of lambing and running a breeding flock. Mountain breeds of sheep play an important part in the stratification of the sheep industry in Wales. They bring desirable traits such as hardiness, mothering instincts and survival to lowland breeds of sheep such as Texel and Suffolk which are favoured for their carcass quality. The end product is a heavier and larger lamb of improved conformation which is in greater demand on the domestic market. 95 96 Recent Trends 5.1.222 Changes in farm income from 1992-98 are shown in Figure 10. Income in 1995/96 increased due to buoyant UK lamb prices and sheep subsidies. Since then profitability has fallen considerably due to both reductions in prices and subsidies. 5.1.223 Sheep Annual Premium (SAP) payments fell by around £8/ewe in 1996 (as shown in Figure 11), and fell again in 1997. LFA farmers receive an additional supplement of around £5/ewe, but still suffered the same drop in SAP as lowland farmers. 5.1.224 Lamb prices were lower in 1997/98 than 1996/97, partly due to reduced exports as a result of the strong pound and tightening of regulations regarding live export. Prices were particularly poor in the autumn/winter of 1997/98, as the market was flooded with lambs held back due to the plentiful grass and good prices experienced the year before. Figure 10 Net farm income from cattle and sheep in the Less Favoured areas and Lowland Areas 1992 to 1998. 180 Index of NFI (1989-1992 =100) 160 140 120 100 80 60 40 20 0 1993 1994 1995 1996 1997 1998 (forecast) LFA Lowland 97 Figure 11 Sheep annual Premium 1993 to 1997 2 25 20 £ / ewe 15 10 5 0 1993 1994 1995 1996 1997 5.1.225 Another factor affecting the market was the introduction of new specified risk material regulations from 1 January 1998. This resulted in the statutory removal of the spinal cord and spleen from any lamb over 1 year old, at significant cost to the producer. This increases the risk and cost in late finishing store lambs. Beef Production 5.1.226 The national beef breeding herd increased by 5.5% between 1992 and 1997 giving an average herd size of 22 cows. The increase in the total herd is shown in Table 23, while Figure 12 indicates the reduction in the total number of suckler cow herds, reflecting concentration within the industry. Traditionally, upland farms have retained small herds of hardy suckler cattle such as the Welsh Black, producing slower maturing and smaller animals. The introduction of continental breeds in Wales has meant the production of larger, leaner animals which mature faster, are of good conformation which are in demand from butchers, processors and retailers. Map 21 shows beef cattle numbers in 1997. Table 23 Year 1992 1993 1994 1995 1996 1997 Total Number of Suckler Cows Number of Suckler Cows 208,300 213,664 216,337 218,902 219,307 219,858 2 MLC Data 98 99 5.1.227 The advent of BSE affected gross margins which were already low, leading many farmers to cease beef production to specialise in lamb production. This greater increase in specialisation and subsequent sheep monoculture increases the risk to those farmers dependent on one enterprise. Additionally, there are wildlife benefits associated with mixed grazing of sheep and cattle which are lost where sheep monoculture predominates. Figure 12 Average Size of Suckler Cow Herds 25 Number of Suckler Cows 20 15 10 5 0 1992 1993 1994 1995 1996 1997 Figures from main holdings only Source : Welsh Agricultural Statistics Number of Suckler Cow Herds Number of Suckler Cow Herds (thousands) 12.00 10.00 8.00 6.00 4.00 2.00 0.00 1992 1993 1994 1995 1996 1997 Figures from main holdings only Source : Welsh Agricultural Statistics 5.1.228 In contrast, a number of dairy farmers are ceasing milk production in favour of beef production. This is often brought about by the need for considerable capital investment to replace old machinery and buildings, or the more intensive labour input demanded by the dairy enterprise. 100 Arable Production 5.1.229 The rich fertile soils of Carmarthen and Flintshire are the main arable areas in Wales, growing a variety of cereals, potatoes, linseed, oilseed rape, field legumes and root crops (Map 22). This is aided by the lower rainfall and gentle slopes allowing a wider range of machinery to be used. Some holdings have diversified into horticultural production, although these tend to be closer to centres of population and the main transport routes for ease of market access. 5.1.230 Table 24 shows very little change in the area of arable land (crops, fallow and temporary grassland) over the period of 1992-1997. Within this, however, is the notable increase in the areas of maize grown for fodder - a reflection of the changing practices in livestock farming. 72% of the area in crops was under cereals in 1997. Fodder crops (including maize) made up some 16% of the total crop area. Table 24 Year 1992 1993 1994 1995 1996 1997 Total Arable Land (crops, fallow and temporary grassland) Hectarage 227,126 229,732 213,340 207,581 211,198 227,106 5.1.231 However, the high value of sterling relative to other EC currencies over the last two years has lowered the intervention price and area aid payments. Cereal margins have been significantly affected: in 1997 by a £40 per tonne fall in prices. This represents around a 40% reduction in income, and a much greater reduction in profit for a typical farmer. 1998 saw a further fall in farm gate cereal prices. 5.1.232 Reduced income means farmers will need to maintain tight control over costs to be profitable. Rented farms or businesses with high levels of borrowings will struggle to make a profit at current cereal prices. Also, the fact that Wales only has a small number of arable enterprises means that the Welsh livestock industry has to import vast quantities of straw and feed at a significant cost. 101 102 Farm Diversification 5.1.233 The decline in income from farming, coupled with labour-saving productivity improvements, has resulted, on the one hand, in a growth in part-time farming (see Table 25) and, on the other hand, an increase in farm size. Table 25 Part Time Farming Farmers, Partners and Directors Whole Time Part Time Part Time % 28 28 29 30 33 37 39 1978 1981 1984 1987 1990 1993 1996 25,095 25,057 25,359 23,546 23,404 22,826 21,311 9,808 9,618 10,298 10,284 11,642 13,151 13,600 Source: Digest of Welsh Historical Statistics Table 26 Percentage of Farm Holdings by Economic Size, 1980-97 1980 (% holdings) 63 32 2 2 1990 (% holdings) 48 33 16 3 Size Category (ESU) Very small <8 ESU Small 8-40 ESU Medium 40<100 ESU Large and Very Large >100 ESU Note : European Size Units (ESU) provide a standard classification of farms by economic size. Source : Welsh Agricultural Statistics 5.1.234 Economic analysis carried out by the National Assembly, and summarised in Table 26, suggests that the economic pressures leading to an increase in farm size remain considerable, and that the trend for fulltime farms to be become larger is therefore likely to continue. Note that the data in the table relates to a single year, but the broad relationship between size and sustainability is maintained across results for all recent years (and indeed is maintained with varying assumptions about the return on capital). 5.1.235 It is clear that to survive as economic units many family farms are under considerable pressure to diversify into new enterprises both inside and outside agriculture, although it is difficult to generalise as to the type of farm likely to do so, as individual circumstances vary considerably. 103 5.1.236 There will always be, for example, a solid core of efficient farms which continue to generate sufficient income and will continue along traditional lines. On the other hand isolated hill farms, struggling to produce a living and needing alternative income, have limited options for change open to them. Between these extremes the majority of holdings face varying circumstances, and with a range of opportunities. Whatever the type of farm, however, the successful search for additional income will depend on the individual concerned. 5.1.237 Farm diversification involves utilising the physical resources of land, buildings and machinery in new ways representing a departure from traditional agricultural practices. It may simply involve introducing different methods of agricultural production, such as the introduction of industrial crops, or it may go much further and involve significant risk and high capital outlay, for example in the provision of tourist accommodation. It may increasingly involve establishing sources of off farm income. 5.1.238 It is perhaps inevitable that the most successful new enterprises have been established by efficient and forward looking farmers. Working from a secure base they have had the required resources and have been prepared to do the essential market research. 5.1.239 Small farms, part-time units and farms in marginal areas have recognised the need to diversify, although many lack the facilities or resources to do so. Many, however, will rely on off-farm employment by some members of the family. The current difficult agricultural circumstances and perceived future pressure on incomes have alerted a far wider range of farmers to the importance of seeking alternative sources of income. 5.1.240 Whatever the reasons behind the decision, encouraging and creating a balance of diversified activities in a locality will benefit the wider rural economy. Diversification and off farm income 5.1.241 The welfare of farmers, and the sustainability of part-time farming, also depends upon their income from non-agricultural and off-farm sources. Table 27 presents the available information. Note that the data excludes income earned by family members other than the farmer and spouse, and covers farms conventionally deemed to be full-time. The Table shows that in 1997/98 such farms earned on average almost 40% of income additional to Net Farm Income from off-farm sources. 5.1.242 A number of the main opportunities for generating alternative income are considered below. In addition, there may be scope for additional income to be gained from agricultural contracting, the provision of specialist agricultural services or from quota leasing. Only a few are likely to be available to any individual family. The possibilities, especially in terms of niche markets, are impossible to quantify. All require research, resources, time and energy if they are to realise useful income. The National Assembly and the Welsh Development Agency have commissioned research into the potential of certain of these alternative sectors, as explained in Section 10. 104 Table 27 Off Farm Income 1997/98 £22,500 £11,400 £500 All Farm Types; per farm Cash income Net farm Income (NFI) Other on-farm income Off-farm income of which: employment & self-employment investment, pensions & other Off-farm income as % of cash income Off-farm income as % of NFI £4,200 £2,600 £1,600 19 37 Source: Farm Incomes in the UK Notes: 1. Information relates to farms of a size greater than 8 ESUs, which are conventionally deemed to be full-time. 2 For definition of cash income and net farm income see Chart 5. 3. Other on-farm income comprises income from on-farm activities that can be separated from farming. These may include such activities as accommodation and catering. 4. Off farm income covers income from employment and self employment away from the farm. It includes social payments. 5. Income relates only to the farmer and spouse. The income of other family members, whether from on-farm or offfarm sources, is not recorded. Farm Woodlands And Forestry 5.1.243 More than 70% of the woodland cover in Wales is under coniferous plantations, largely in the Welsh uplands on what was considered to be marginal agricultural land. Many of these plantations are reaching maturity, with an estimated output of 1.9 million cubic metres by 2011. 5.1.244 The remaining 30% of the forest area are broad-leaved woodlands. Characteristically these tend to be small, often unmanaged semi-natural woodlands, occupying steep valley sides of little agricultural value. As a result, the timber is often of low quality and difficult to extract. 5.1.245 Farm woodlands provide a range of benefits to the farm holding and are seen as a relatively untapped resource. Benefits include the provision of timber for sale or on-farm use, livestock shelter, game rearing, marketable leisure activities (e.g. mountain bike trails, paint-balling) as well as contributing to the overall capital value of the holding through amenity and conservation value. 5.1.246 Woodlands brought under management after long periods of neglect generally produce lowquality material, which is often sent to pulp or chip mills, or sold as firewood. Such markets can be seen as requiring little involvement by the farmer. Prices for pulp and chip material are currently such that the costs of extraction and transport are barely covered. 105 5.1.247 Farmers need an incentive to begin the management of woods to improve quality in the long term. This has many potential benefits, including management of woodlands as habitats, maintaining landscape features, shelter and shooting, providing a long term cash asset, and increasing the land value of the farm as a whole. 5.1.248 Adding value to farm timber using farm labour has the potential to cover the cost of management, create employment and income, and contribute to the preservation of the family farm and rural communities. There are a range of wood value adding initiatives ongoing throughout Wales through Leader groups, County Councils, Objective 5b projects and Coed Cymru. Products from low quality farm woodlands range from dimension timber as pioneered by Coed Cymru, to charcoal, hurdles and on-farm use e.g. fence posts and gates. Short Rotation Coppice 5.1.249 Planting is relatively small scale at present, largely because the financial returns from woodland and timber production are unable to compete with the returns from agricultural use of land. 5.1.250 Short Rotation Coppice is seen as an opportunity for Welsh farmers to diversify away from traditional agricultural enterprises. The crop would provide income within 4 years of planting, when sold for the generation of electricity, as a renewable energy sources. However, research and investigation is needed into the cultivars of trees suited to the Welsh climate. The main barrier to the development of this industry is the lack of a market for biomass fuel. The building of suitable power plants utilising biomass or forest residues to generate electricity would provide an incentive for both farmers to plant Short Rotation Coppice in addition to encouraging the management of existing woodlands. Aquaculture 5.1.251 The Welsh farmed fish industry is small scale, with a traditional and narrow operating base and product range, and is virtually static commercially. This is in direct contrast to the rest of the UK where there is a large and growing aquaculture industry. The main products of the Welsh aquaculture industry are trout and shellfish. 80% of the stock of Welsh trout farms is destined for the table market. The remainder is directed to re-stocking and ongrowing. Total tonnage for 1998 was 600 tonnes. Annual salomid (e.g. salmon and trout) production in Wales is insignificant by comparison to the remainder of the UK. The sales profile for trout in the UK for the past six years has been relatively static. In 1998 production exceeded sales. New promotional programmes are being introduced by the British Trout Association. A Welsh Trout Producers Association has been formed principally to establish a Welsh brand. No marine fish or crustacea are farmed in Wales. 5.1.252 Opportunities for fisheries diversification tend to involve the management of the riparian habitat associated with agri-tourism and particularly fresh water fishing. 106 Alternative Crops 5.1.253 The LEADER groups across Wales have taken the lead in investigating the potential of alternative crops: a) The long term potential for growing, processing and marketing flax and hemp has been the subject of comprehensive research by CYMAD, Menter Môn and the Bio-composite Centre in Bangor. This has resulted in a successful bid for European funding under EAGGF for the establishment of a local processing facility in North Wales. Whilst this initiative is at an early stage of development its establishment, if successful, will promote added value processing and ensure that a market for the raw material remains within the area. b) a LEADER group based in Ceredigion, Antur Teifi, is currently undertaking a project which is looking at the feasibility of growing lupins. 5.1.254 Both of these projects are designed to evaluate the potential of the crops and reduce the risk to the farmer in growing new crops. Results will be filtered back to the farming community, and if the projects are successful, this should encourage wider participation Organic Farming 5.1.255 Organic production undoubtedly provides one of the greatest opportunities for farm diversification and adding value - provided that the price differential can be maintained. There is a need to sort out the best method for marketing but there is a range of options such as individual farm shops, co-ops and "farmers markets" as well as national retailers. For many of the upland livestock farmers in Wales, the process of conversion would not be very difficult, as hill farms often have very low inputs of inorganic fertilisers. The constraints would be in finding suitable lowland organic store cattle finishers, abattoir and marketing facilities. The Organic Farming Scheme described in Section 9.8 provides an incentive for organic conversion. Horticulture 5.1.256 Limited areas in Wales are suited to horticultural/market garden production. These tend to be concentrated in the coastal areas and on the better quality land. The main area is Gower but production also occurs around Cardiff and on the North Wales coastal strip. 5.1.257 There are various schemes exploring the potential for increased production and one of the main centres is the Northop Horticultural College, which is supporting a project producing vegetables for the local market. Low value, bulky crops such as swedes and potatoes are considered to have potential as they store well and are easily transported. It is hoped that developments will include organic produce in the near future. 5.1.258 As can be seen from Map 23, which shows the main areas in Wales currently involved in horticultural production, the potential in Wales is limited by poor soil quality and climatic disadvantages, which limits the range of crops that can be grown. 107 Agri-Food Development 5.1.259 Food processing already makes a significant contribution to the rural economy and there is potential for further growth. The core sectors which provide processing opportunities in Wales are milk, beef, lamb, and organic; full details of the present position and potential for development of these sectors are given in Section 9.9. These are bulky products with significant advantages to be gained from processing at source. The food sector is characterised by problems associated with distribution and seasonality making it difficult to guarantee continuous or even prolonged supply of some products. Value-added ventures such as milk processing (cheese, yoghurt etc.) not only increase returns but can form the basis for tourist attractions. If products can also be sold through farm shops this brings additional benefits. 5.1.260 In 1998, the Welsh Office commissioned a study to develop Strategic Action Plans for the key sectors in Wales - lamb and beef, dairy and organic - in order to identify actions to support the industry that were focused firmly on addressing the relevant trends in market demand; were practical and realistic; and carried commitment from the industry and relevant organisations in Wales. 5.1.261 The Strategic Action Plans, which were published in March 1999, reviewed the current state of each sector, evaluated its' strengths and weaknesses and set out key strategic objectives and action points to develop each sector and to boost the rural economy. The development of the added value processing industry in all three sectors is a key factor in the successful delivery of the Plans and the proposals for action under this measure echo the recommendations of these Plans. The Plans and the Executive Summary, which set out in detail the situation in Welsh agriculture and provide a comparison with the UK situation, are at Appendix 19. Farm Tourism and Business Development 5.1.262 Farm tourism is regarded as one of the cornerstones in the diversification process on farms in Wales and is a major contributor to farm income. The area has a reputation for high quality bed/breakfast and self catering accommodation. There are dangers of saturation, making it essential that marketing and advertising are kept continually under review. Organisation of operators into groups helps to spread costs and implement joint marketing initiatives 5.1.263 Many farms possess farm buildings that have the potential for conversion to develop small scale business enterprises. These may either be directly linked to agriculture (e.g. servicing such as agricultural contracting, processing of farm produce) or tourism, outdoor leisure and country crafts. 5.1.264 Where business opportunities can be developed, the re-use of buildings can be invaluable to the farm business. They may provide a supplementary source of income on the farm and enable more efficient use of employed labour. Alternatively, where used by local off-farm entrepreneurs they can provide the farm business with useful rental income. 5.1.265 Some buildings may be important in a landscape or historic context and merit preservation on these grounds. Any conversion must be done sympathetically to retain the character of the building. 108 109 The Environmental Impact of Agriculture 5.1.266 The key sustainability objectives which the Plan is intended to help achieve include: ! Effective protection of the environment To tackle global environmental threats such as climate change and protect human health and safety from hazards such as air pollution and toxic chemicals. The wildlife, habitats, landscapes and historic buildings are important to our health, prosperity and culture and need to be managed and protected. ! Prudent use of natural resources To ensure that non renewable resources like oil and gas are used effectively and to ensure that alternatives are developed to replace them. Renewables such as water, fisheries and forests should be used in ways that will not threaten their availability or quality now and in the future. Environmental resources Wildlife habitats 5.1.267 An initial analysis of the extent of wildlife habitats in Wales, broken down into eight broad categories, immediately reveals the predominantly pastoral nature of the landscape (Table 28). Nearly two-thirds of the land is covered by grassland, which supports a farming economy based largely on livestock rearing. Of this, some 1 million ha, almost 50% of the land surface of Wales, is recorded as improved agricultural pasture. Of the other habitat categories, only woodland (including conifer plantations and scrub) exceeds 10%. Heathland and peatlands each cover 3-5% of Wales, predominantly as components of heather moorland in upland areas. Bracken also accounts for about 3%, mainly around the upland fringes. Arable land occupies a similar area, mostly on fertile soils in the lowlands. Coastal and open water habitats each cover less than 1%. In overall terms, land supporting semi-natural plant communities has now declined to a little more than one quarter of the land area of Wales. Table 28 Habitat Grassland Woodland and Scrub Peatland and Wetland Heathland Coastal Bracken Open Water Arable Urban, Westland and Bare Rock TOTALS Extent of Wildlife Habitats in Wales Ha 1,269,627 264,185 59,661 93,328 13,289 62,209 14,573 56,563 165,642 1,999,079 % of total 64 13 3 5 1 3 1 3 9 100 Source: Countryside Council for Wales, 1999 Landscape and Historic Features 110 5.1.268 Traditional field boundaries are important components of the Welsh rural landscape and comprise a resource of considerable historic significance. For example, some 50-60% of Welsh field boundaries are thought to be of medieval or even prehistoric origin and form part of ancient enclosure patterns. The method of construction varies across Wales with stone faced earthbanks (often topped with gorse) in coastal areas; species rich hedges in the lowlands and stone walls or thorn hedges in the upland fringes. Such features are of value to a wide range of species including song thrush, pipistrelle bat, dormouse and other such mammals such as weasel and stoat. Recreation and Enjoyment 5.1.269 The proportion of open country, including unfenced mountain, moor, heath and registered common land in Wales, is estimated to lie somewhere between 40-50% of the total land area, or 800,000 to 1 million hectares. Almost all of this land is used for livestock grazing, mainly by sheep. Of this total area of open country, 10-12% is already open to the public as of right and on a permanent basis. A further 20-25% is open by agreement, with much of the remainder subject, by custom and tradition, to de facto access. 5.1.270 The 80,000 km of public rights of way in Wales provide for public access and enjoyment of the countryside. Not all of this network is properly maintained and signposted, however, with recent surveys revealing that only 54% of routes were clear of obstacles and only 15% clearly waymarked. A 1996 survey of visitors on day trips to Wales revealed that walking accounted for some 31 million visits annually, or 44% of all day visits to the countryside. External costs of agriculture 5.1.271 Environmental Accounts produced by the Office for National Statistics detail the major external costs imposed by key industries. The accounts suggest that the main costs imposed by agriculture across the UK lie in the areas of greenhouse gases and acid rain precursors, where in 1997 agriculture accounted for 12% and 16% respectively, despite contributing less than 2% to total GDP (excluding subsidies). The traditional pattern of the Welsh countryside 5.1.272 Agriculture occupies some 80% of the land area of Wales and is responsible for shaping and maintaining much of the landscape and its biodiversity. Traditional land management practices were substantially influenced by the predominantly damp climate, steep relief and poor soils. 5.1.273 Mixed cropping/stocking enterprises still remain in areas such as Ceredigion, Brecknock, Radnor, Flint and Gower. Large areas of central Wales are now devoted largely to livestock, however, and the traditional practice of growing a small area of crops for stock feed is now a thing of the past in many areas. 5.1.274 Alongside the traditional variety in cropping and stocking patterns, the extensive grazing of hardy hill breeds enabled farmers successfully to manage the acid grasslands, heathlands and blanket bogs of upland Wales. Practices such as controlled burning, regular shepherding and the use of cattle as well as sheep all contributed to the maintenance of a diverse landscape. Similarly, the regular cutting of bracken 111 for bedding was instrumental in keeping the upland fringes relatively open in character up until the early part of the twentieth century. 5.1.275 Less intensive suckler cow systems are often particularly associated with environmental benefits. Cattle are less selective grazers than sheep and so tend to maintain the diversity of herb rich marshy grasslands more effectively. Being heavier, cattle can play an important role in preventing the spread of both bracken and purple moor-grass (Molinia) provided they are grazed early in the year. Finally, the muck heaps and straw bedding associated with cattle provide food for a variety of invertebrates. Some of these are important in their own right whilst others provide food for farmland birds as well as mammals such as bats. 5.1.276 Whilst generally constituting a more intensive system, the dairy enterprise can also provide environmental benefits. In particular, the use of dry cows to manage unimproved grasslands can be particularly important in areas which lack beef cattle. Similarly, there are benefits for dung feeding invertebrates as well as for those species such as bats which depend on these for a food source. 5.1.277 Coupled with relatively low stocking densities, the practice of hay making is instrumental in maintaining many unimproved grasslands in both the lowlands and the upland fringes. The later cutting dates associated with hay as compared to silage production are particularly beneficial for farmland birds such as skylark, as well as for mammals like brown hare. Similarly, the practice of using farmyard manure rather than compound inorganic fertilisers ensures that nitrates are released more slowly to the overall benefit of species diversity. 5.1.278 Broad-leaved woodlands tended to survive clearance in steep inaccessible or boggy sites. Provided the labour was available, however, these woodlands provided timber for a variety of uses around the farm, in particular fencing, stakes and gateposts. More recently, with the advent of modern materials, such woodlands have tended to be used more frequently for stock shelter. 5.1.279 Traditionally small scale production, coupled with the variety of cropping and stocking patterns, ensured the survival of a wealth of field boundary features. Many of these are of considerable landscape, historic and biological value. Such features require a great deal of labour input to ensure their continued maintenance, in particular the regular laying of hedges and the replacement of stone within walls and earth banks. The impact of changing patterns of agriculture 5.1.280 Since 1945, there have been highly significant changes in agricultural practice. Systems of grant aid and agricultural subsidy have tended to reinforce market pressure to improve both the quality and the quantity of output. For much of Wales this required substantial intensification, involving the replacement of semi-natural vegetation, with well-drained, heavily fertilised grass leys. Elsewhere, the composition of upland heathlands and grasslands was altered simply as a result of increased grazing pressure and indirect fertilisation via feed concentrates. These trends are illustrated by the fact that unimproved and semiimproved grasslands now amount to less than 10% of the total area of lowland grassland in Wales. Similarly, a large proportion of the remaining heathland is in poor condition and with a low cover of dwarf 112 shrubs (State of the Environment Report, CCW, 1999). 5.1.281 More recently, the change in stocking regimes has been particularly striking. As illustrated in Table 29 the number of sheep on Welsh farms rose by 36% between 1980 and 1997, whilst the number of cattle fell slightly by about 5%. Table 29 Cattle and Sheep in Wales (000s) 1980 Cattle Sheep 1,391 7,946 1987 1,359 9,937 1997 1,315 10,825 Source: Agricultural Census 5.1.282 Notwithstanding the impact of such a substantial increase in sheep numbers on the composition of semi-natural habitats such as heather moorland and woodlands, these figures tend to mask the fact that the rate of decline for cattle has been steeper within the Severely Disadvantaged Area than elsewhere. Although direct comparisons are difficult owing to changes in the methodology of data collection, it appears that cattle in the SDA declined by about 7% between 1987 and 1997. Such reductions in cattle grazing are of particular concern bearing in mind their capacity to graze coarse vegetation and assist in the control of problematical species such as bracken and moor grass. Lack of cattle manure also renders it increasingly difficult for farmers to maintain hay meadows in the traditional manner, whilst a reduction in dung, and hence dung feeding invertebrates, could have significant repercussions for key species such as bats. 5.1.283 In recent years there have been striking changes in the arable sector. As shown in Table 30 the hectarage devoted to cereals in Wales has declined by 21% since 1987, whilst within the LFA the decline is even steeper at 44%. Similarly, the area of spring barley grown in Wales has declined by 50% since 1987, with a corresponding decrease of 60% within the LFA. Table 30 Arable Land in Wales (ha) 1987 Cereals (LFA) Cereals (Non LFA) Cereals (Total) Spring Barley (LFA) Spring Barley (Non LFA) Spring Barley (Total) Source: Agricultural Census 1992 23,919 29,431 53,350 10,330 9,248 19,579 1997 17,708 35,662 53,370 6,727 10,115 16,842 31,184 36,098 67,282 16,977 16,492 33,469 113 5.1.284 Such changes in the arable sector are significant not just because of the scale of decline, but also for their nature and location. The decline in spring barley is particularly problematical for birds such as lapwing and skylark which exploit bare soil and young crops during the nesting period. Similarly, the loss of cereals and winter stubbles from the LFA is particularly serious for characteristic birds of mixed farming systems such as yellowhammer, tree sparrow and linnet. 5.1.285 While significant shifts have occurred in the relative importance of the various agricultural sectors within Wales, there have also been major changes within individual sectors. In the case of grass-based enterprises, for instance, Table 31 illustrates the substantial reduction in hay cutting relative to silage production. Notwithstanding year on year fluctuations caused by the weather, the years from 1980 to 1995 saw an overall fall in hay production of 53% and an increase in silage cropping of just over 86%. Table 31 Hay and Grass Silage Production in Wales (ha) 1980 Hay production Grass silage production 190,178 122,303 1987 111,578 216,686 1995* 95,176 228,314 * Latest year for which figures available Source: Welsh Office Statistics 5.1.286 Whilst much hay production would have taken place on improved land, it is likely that a significant number of unimproved grasslands are now being managed for silage. Since this involves a capacity to take 2-3 cuts per season rather than a single hay crop, this increased production is likely to have been brought about by increasing the rate of fertiliser application and thereby reducing plant diversity. On improved land, the use of a significantly earlier cutting dates in silage crops is likely to have had adverse impacts on farmland birds and mammals, including both skylark and brown hare. 5.1.287 The effect of recent changes in farming practice on biodiversity is illustrated by the declines in certain key species such as lapwing and the marsh fritillary butterfly (Tables 32 and 33). No single factor is responsible for the decline of the lapwing as a breeding bird in Wales, but drainage of wet pasture, increased stocking rates and the loss of arable land are all implicated, alongside afforestation and predation. Similarly, the decline of the marsh fritillary has been brought about by the abandonment of cattle grazing, increased use of sheep, agricultural improvement, afforestation and industrial development. Table 32 1970 c14,000 Lapwing in Wales (Breeding Pairs) 1987 7,500 1998 1,700 Source: RSPB and British Trust for Ornithology 114 Table 33 Pre-1990 465 Marsh Fritillary Populations in Wales (No. of 4 km squares) 1991-96 166 Source: Countryside Council for Wales 5.1.288 Traditional field boundaries suffered as a consequence of increased intensification and a declining rural labour force. Notwithstanding the interest displayed by many farmers in maintaining and restoring these features, there was an overall decline of 29% in the length of Welsh hedgerows between 1984 and 1990 [Source: ITE Countryside Survey]. Summary of Current Position 5.1.289 Whilst major changes have taken place since 1945, well over one quarter of the Welsh landscape still consists of semi-natural habitats. The vast majority of these are associated with agricultural holdings. Taken together with the extensive pattern of field boundaries and natural landforms, this constitutes a significant resource in terms of landscape quality and biodiversity, as well as historic and cultural values. 5.1.290 The post-war emphasis on land improvement, coupled with the recent increase in sheep numbers, has had a significant impact on both biodiversity and landscape. Whilst increased intensification within sectors has posed specific problems for certain species and habitats, the issue is also one of increasing specialisation, both at the level of the individual farm as well as within regions. The shift from cattle into sheep production and the steep decline in arable cropping within the LFA have impacted on landscape diversity as well as on habitats and species. Increasing specialisation is of particular concern in the case of farmland birds. 5.1.291 The decline in the rural labour force makes it increasingly difficult to maintain traditional field boundaries as well as to carry out labour intensive tasks such as woodland management and shepherding. The agricultural industry is largely responsible for producing the landscape of rural Wales and ensuring its continued contribution in terms of biodiversity, historic value and enjoyment by the general public. Such values are an additional product of the industry that can be set alongside more traditional products such as beef, lamb and milk. 5.1.292 It should be recognised that agriculture imposes external costs, particularly in terms of its contribution to greenhouse gases and other forms of pollution. It is also clear that un-farmed land can provide benefits both in terms of recreation and environmental diversity. There is no case for assuming that any particular pattern of land use should be preserved indefinitely, irrespective of the costs. 115 Strengths, Weaknesses Opportunities And Threats (SWOT) 5.1.293 This analysis, which is based on the summary of the current situation earlier in this Section together with the analysis undertaken by the Regional and Rural Sectoral Partnerships of the European Task Force, the Rural Partnership and data from the Objective 1 Single Programming Document, highlights some of the main problems and opportunities which have been identified in rural Wales. Many are a direct consequence of the physical and economic factors prevalent in the rural areas of Wales. Strengths: The following have been identified as the key strengths of rural Wales: ! ! ! ! ! ! ! ! ! ! ! ! Competitive costs for sites and premises Strong sense of community co-operation, participation and cohesion Established tourism destination Established voluntary sector infrastructure Availability of incentives to support economic development Established employment growth in Service Sector industries High quality visual landscape Strong cultural and linguistic identity Ability to produce high quality lamb, beef and milk from grass Adaptable workforce High levels of self-employment Competitive wage rates Weaknesses: The following have been identified as the main weaknesses of rural Wales: ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! Dependence on traditional and declining industries such as agriculture Decreasing number of agricultural holdings High proportion of low-grade agricultural land Declining farm incomes A farming industry dependent on CAP subsidy payments with a narrow and vulnerable economic base Declining employment in the agriculture industry Declining wildlife habitats due to intensification of agriculture Shortage of large sites and premises for strategic developments Relatively few large employers or dynamic medium-sized firms Lower average gross weekly full-time earnings compared to the rest of Wales Lack of quality, well paid jobs compared to other parts of Wales Productivity in terms of output per worker below the Welsh average Part-time working more common in rural areas Poor transport infrastructure - topography a block to transportation Outward migration of young people(especially graduates and skilled workers)/in-migration of retirees 116 ! ! ! ! ! ! ! ! ! ! ! Pockets of population sparsity Overall population decrease in Severely Disadvantaged Areas ICT infrastructure lagging behind other parts of Wales Difficulty in attracting inward investment because of actual and perceived peripherality Economic activity concentrated in low value-added sectors High tourism employment but often seasonal and low paid Declining economic activity rates Low start-up/survival rates for new SMEs Lack of affordable childcare hampering parents wanting to return to employment Remoteness from centres of learning a barrier to acquiring new skills and training Declining rural services such as the village shop and post office Opportunities: The following have been identified as the key opportunities that exist in rural Wales: ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! Scope for broadening the skills base of rural areas Potential of ICT for teleworking Developing sustainable tourism and niche markets Developing "green" tourism income and employment Development of a sustainable integrated transport network Scope to ensure farm viability by maximisation of all income sources Potential to extensify agricultural production increasing biodiversity and utilising welfare friendly and environmentally friendly systems of production Exploit potential for adding value to local products Maximising the growth potential of cultural industries Diversification of the economy into service sector industries Promoting the development of indigenous companies Improving business support services Improving academic achievement levels Developing local markets for local products Developing crèche and childcare facilities Developing technology transfer between HE Institutions and companies Tackling social exclusion through improved education and training Developing the social economy and community businesses Exploiting opportunities for renewable energy developments Scope for exploiting domestic and European funding Taking advantage of tourism growth sectors such as short breaks and activity holidays Developing low-cost premises and improving access to business support grants, venture capital and low-cost loans 117 Threats: The following have been identified as the major threats facing rural Wales: ! ! ! ! ! ! ! ! ! ! ! ! ! Continuing specialisation of the agricultural industry will lead to increased risk and further shedding of labour Unless reskilling opportunities are grasped this will result in a lack of employment potential and a consequential fall in contribution to GDP per head Further increases in the outward migration of the economically active element of the population will occur if quality jobs are not created in service and manufacturing industries in rural areas Continuing intensification of agriculture will lead to further losses in biodiversity unless this trend is reversed and environmentally friendly farming practices are adopted Unless investment in rural infrastructure occurs (e.g. in village shops and post offices) depopulation will occur If investment in ICT is not implemented there is potential for further job losses and businesses will not be able to capitalise on efficiency gains If productivity continues to be consistently below the Welsh average this will discourage inward investment and job creation Continuing pressure on agriculture through CAP reform Continuing decrease in the number of farm holdings The continuing strength of sterling Population movements resulting in a loss of cultural identity in some areas Higher service delivery costs in rural areas Deprivation, poverty and relative isolation leading to increased levels of stress 5.1.294 This analysis is carried through into the development of a strategy for the development of rural Wales (Section 6.1) and has also informed the selection of priority measures (Section 9). 118 5.2 IMPACTS OF THE PREVIOUS PROGRAMMING PERIOD 5.2.1. Article 43 of Council Regulation 1257/1999 requires that the Rural Development Plan include the main results of operations undertaken in the previous programming period, with regard to the evaluation results available. 5.2.2. The main results for the agri-environment, Less Favoured Areas and European Agricultural Guidance and Guarantee Fund Objective 5b operations are set out below. Agri-environment Programme Approved under Regulation 2078/1992 Introduction 5.2.3 This Section aims to outline the development of the current agri-environment programme operating within Wales, and provide a broad overview of its achievements. 5.2.4 Wales has a great variety of wildlife habitats and landscapes. As indicated in Section 5.1, the diverse natural character of the Welsh countryside, enhanced by distinct and valuable landscapes created by traditional farming practices, has produced this unique and ecologically important environment. Such varied landscapes are vulnerable to change in farming practice and so require protection against deterioration. 5.2.5 During the 1970's there was a dramatic intensification of the agriculture industry as a result of headage incentives, with a move away from traditional farming practices. It is this change in agricultural practices that poses the greatest threat to the valuable habitats and landscape features which traditional farming methods have created. 5.2.6 At present there are five different agri-environment schemes in operation, responsible for the conservation of the existing Welsh countryside. These are the Environmentally Sensitive Area Scheme (ESA), Habitat Scheme, Moorland Scheme, Organic Aid Scheme and Tir Cymen. The objectives and guiding principles for each of these schemes are summarised below, together with an indication of the monitoring arrangements. Details are given in Appendix 1. Environmentally Sensitive Areas 5.2.7 The Welsh Office Agriculture Department (WOAD) launched the first Environmentally Sensitive Area (ESA) Scheme in Wales in the Cambrian Mountains in 1987 on a part farm basis. The whole farm scheme concept was introduced into the Lleyn Peninsula in 1988, and extended to Radnor and Ynys Mon in 1993. Similar schemes for the Cambrian Mountains Extension Area, Lleyn Peninsula (revised), Preseli and Clwydian Range followed in 1994. 5.2.8 The original Cambrian Mountains ESA was relaunched as a whole farm scheme in 1995. Map 6 (Section 5.1) illustrates their location within Wales. 5.2.9 ESA's are voluntary, whole farm schemes, available to farmers within the ESA designated areas. These designated areas were identified following consultation between WOAD, the Nature Conservancy 119 Council and Countryside Commission (now the Countryside Council for Wales) and ADAS. The schemes are designed to protect areas of Wales where traditional farming methods have created distinct and valuable landscapes supporting a range of interesting and important wildlife habitats. ESA's provide support for the continuation of these traditional farming practices in order to protect and enhance the local environment. 5.2.10 Each ESA has two Tiers of management detailing the farming practices required under agreement. The overall aim of Tier 1 is to retain and/or maintain environmental features. The whole farm is included under Tier 1 management and habitats with greater environmental benefits are targeted by Tier 1A management. Key habitats include semi-natural, rough grazing, wetland, hay meadows, coastal belt and partially improved grassland 5.2.11 The Tier 2 optional management element aims to offer positive enhancement of the environmental interest. There are also opportunities to recreate rough grazing, hay meadows, coastal belt and wetland. Inclusion of these extra management responsibilities in the agreement are rewarded with higher payments, depending on the type of land. In addition, farmers entering such agreements are also entitled to carry out a Conservation Plan, designed to support positive enhancement of the landscape and wildlife. 5.2.12 Land entered into an ESA management agreement will be affected by certain prohibitions on agricultural production and must be subjected to positive management. Any costs or losses associated with these management requirements will be reflected in the annual payments per hectare received. An annual payment is given in respect of the whole farm (Tier 1) to compensate agreement holders for following the basic requirements of the scheme. Additional specific payments are provided for protection and management of valuable wildlife habitats within the Tier 1A component. Further annual payments can be given in respect of enhanced management, reversion categories and boundary restoration activities. Capital grants are also available for specific conservation plan items, which include pond restoration, bracken control and traditional buildings. These grants are calculated as a percentage of expenditure which has been spent on these specific items. Appendix 1 gives a summary of uptake and expenditure levels for each ESA. 5.2.13 Each ESA has specific habitats of importance based around the landscape features of the area. The schemes, therefore, have specific targets, or Performance Indicators, set for assessing their performance in terms of quality and quantity of habitat entered under agreement. The full set of Performance Indicators can be seen in Appendix 1. The Habitat Scheme 5.2.14 The Habitat Scheme was launched by WOAD in 1995. The aim of the scheme is to protect and enhance the wildlife value of specifically important habitats in Wales. This part farm scheme is voluntary and available to farmers throughout Wales, excluding ESA and Tir Cymen designated areas. Any enclosed and eligible farm land may be entered into the scheme, if assessed as being capable of achieving environmental benefits within the ten year life of the scheme. 120 5.2.15 The scheme relates to four habitats of primary importance throughout Wales: ! broad-leaved woodland ! species rich grassland ! water fringe ! coastal belt 5.2.16 The Habitat Scheme provides farmers with a set of general guidelines covering all habitats. In addition, specific habitat management guidelines are provided, aimed at protecting, enhancing and where possible, creating wildlife habitats. Each habitat entered has a specific management agreement written with the aim of improving its ecological value, based on Project Officer objectives. Payments are then made annually for each hectare of that habitat within the farm which has been volunteered for this scheme. 5.2.17 Land entered under a habitat management agreement will undergo a reduction in agricultural production. Any costs or losses associated with these management requirements will be reflected in the annual payments per hectare received. 5.2.18 Since its launch in 1995 the following areas of land have been entered into agreement within each of the primary habitats: Broad-leaved woodland ! Species rich grassland ! Water fringe ! Coastal belt - unimproved ! Coastal belt - improved ! 1067 ha 5282 ha 101 ha 342 ha 38 ha 5.2.19 Appendix 1 provides information on the area and total payments given in respect of each component habitat. The Moorland Scheme 5.2.20 The Moorland Scheme was introduced by WOAD in 1995. Its purpose is to protect and improve moorland areas, primarily through stocking rate reductions. The scheme is voluntary and eligible to farmers within the moorland area identified on the 1992 Moorland Map of England and Wales (Map 7 in Section 5.1 identifies moorland areas in Wales). The Moorland Scheme is designed to protect moorland areas which have no protection under other agri-environment schemes. Consequently, land within ESA or Tir Cymen boundaries is not eligible. 5.2.21 The Moorland Scheme operates by setting maximum permissible winter and summer stocking rates on grass moorland and heather moorland. In addition, a plan of action of moorland management must be agreed. 5.2.22 Importantly, the scheme requires a headage reduction of at least ten ewes for land to be eligible. The current hill stocking rate must exceed the Moorland Scheme recommended stocking rate of 2.4 sheep per hectare on grassland and 1.5 sheep per hectare on heather, by at least ten ewes. Consequently, land already stocked at or below the stocking rate recommended under the scheme would not be eligible. 121 Payments are on a headage basis related to the number of stock removed to meet the Moorland Scheme requirements, and agreements will last for five years. 5.2.23 In addition to protection of moorland, certain inbye features of importance, e.g. broad-leaved woodland, wetlands, haymeadows and stockproof traditional field boundaries are also protected under the scheme. 5.2.24 Since its launch in 1995, 16 schemes have been approved, which will involve a total expenditure of £440,550 on a reduction of 2,937 ewes. Organic Aid Scheme 5.2.25 The Organic Aid Scheme (Wales) was introduced by WOAD in 1994 under EC Regulation 2087/1992. It offers payment over five years on land being converted to organic production. The payments are part funded by the European Agriculture Guidance and Guarantee funds. There are no payments for existing organic land. 5.2.26 Under the rules of the scheme the applicant has to submit a plan for the unit to be converted. Aid is paid on each parcel of land entered into conversion for a period of five years from the start of conversion, even though the land may obtain full organic status within or after two years. Because conversion may be phased, the total period over which the farmer receives payments will range from five to nine years. All the land on the holding which is organic or is converted to organic production has to remain organic as long as aid is being paid on any part of the holding. 5.2.27 The maximum area on any one holding which can attract aid is 300 hectares. The minimum area is 1 hectare. The levels of aid depend on whether the land is within the Less Favoured Area (LFA). The rates per hectare are: Year Non-LFA (£) LFA (£) 1 70 14 2 70 14 3 50 10 4 35 7 5 25 5 Total 250 50 5.2.28 For the first five hectares, there is also an additional payment of £30/hectare/annum. Under the rules, any revisions to payment rates do not affect existing participants in the scheme. 5.2.29 For a variety of reasons, the uptake of the Organic Aid Scheme in Wales has been relatively low, as shown below, and this has led to a review of the scheme (see Appendix 2) and the introduction of the revised Organic Farming Wales scheme details of which are set out in Section 9.8. Area (Hectares) 94/95 95/96 96/97 97/98 98/99 0 541 72 376 707 Approvals 94/95 95/96 96/97 97/98 98/99 0 10 4 12 12 Total 1,696 Total 38 122 Tir Cymen 5.2.30 Tir Cymen, introduced by WOAD in 1992, is an experimental environmental land management scheme operated by the Countryside Council for Wales in the former administrative districts of Meirionnydd, Dinefwr and Swansea. The scheme aims to protect and rehabilitate landscape features, wildlife habitats, archaeological and historic sites, geological features and landforms on Welsh farmland as well as to provide new and improved access to the Welsh countryside. 5.2.31 Entry into Tir Cymen is voluntary and requires the farmer to: adhere to a whole farm conservation code; adopt specific management practices on all areas of moorland, heathland, broadleaved woodland, coastal land and unimproved grassland; and undertake an agreed programme of other management works and capital projects relevant to the scheme's objectives. There is a requirement to provide access, at no charge, to moorland, heathland and unimproved upland grassland. New linear access routes can be provided by agreement. 5.2.32 By September 1998, 890 farms were entered into the scheme, covering 81,793 hectares of land, all of which is subject to the requirements of the whole farm conservation code and 56% of this (46,194 hectares) is subject to further habitat specific management requirements. Overall, 43.5 % of the land in the three pilot areas had been entered into the scheme. 5.2.33 Details of the Tir Cymen scheme are in Appendix 3. Agri-environment scheme monitoring 5.2.34 Detailed monitoring programmes have been set up in the ESA's and on sites under agreement in the Habitat, Moorland and Tir Cymen schemes. These monitoring programmes encompass biological monitoring of the seven major habitat types; broad-leaved woodland, upland heathlands and grasslands, haymeadows, lowland, wetland, coastal grassland and arable reversion. The programmes also monitor the threat to historic and archaeological features and the positive effect of hedgerow regeneration access provisions, butterfly populations on calcareous grassland and overwintering/breeding wader populations. 5.2.35 The findings of the monitoring programmes are set out below. Appendix 1 illustrates the monitoring programme for each of the six ESA's, including resurvey work in progress for the Habitat and Moorland Schemes. Woodlands 5.2.36 Monitoring of broadleaved woodland to record the impact of stock exclusion has taken place in the Cambrian Mountains ESA and Tir Cymen areas. Woodland monitoring in the Cambrian Mountain ESA compared the number of germinating tree seedlings from sites which were on agreement and nonagreement land between 1988 and 1993. Tir Cymen examined vegetation change in the woodlands over the three year period from 1993-1996 and in 1996-1997. Despite the short period covered by the monitoring, both programmes showed a significant increase in the number of tree seedlings following stock exclusion. Ash, oak and birch were the most frequently occurring species although holly, rowan and willow also featured in sample plots. Sycamore regeneration was abundant on a very small number of sites. 123 5.2.37 The Tir Cymen monitoring looked at changes in the ground flora. An increase in extent and species diversity was noted. Substantial change was observed in wet woods with an increase in meadowsweet (Filipendula ulmaria) and yellow pimpernel (Lysimachia nemorum). In dry woodland there were increases in wood sorrel (Oxalis acetosella), bluebell (Hyacinthoides non-scriptus) and wood anemone (Anemone nemorosa). Bramble (Rubus fruicosus) and bracken (Pteridium aquilinum) had spread in some cases, along with an increase in sward height in the more grassy woodlands. 5.2.38 When the number of saplings in the Cambrian Mountain ESA woods were examined no evidence of tree seedling growth into viable saplings was found. The literature suggests that failure of seedlings to develop into saplings is often caused by woods having a closed canopy causing insufficient light at ground level to allow the seedlings to flourish. The density of the ground flora of regenerating bracken, bramble and tall grasses could also have an adverse effect on sapling establishment. 5.2.39 Upland woodlands can have internationally significant populations of mosses and lichens. A detailed study carried out in the Snowdonia National Park suggested that the regeneration of bramble and grasses causes a significant problem for the persistence of these species in upland sites. Upland Heathlands, Grasslands and Blanket Bog 5.2.40 The importance of regulating stock numbers on open upland vegetation throughout Wales is recognised in the protection of upland heathland, grassland and blanket bog provided by all the ESA areas and Tir Cymen scheme, as well as being the specific focus of the Moorland Scheme. Monitoring is taking place in the following areas: ! ! ! ! Cambrian Mountains ESA, where heather has been examined over a four year period between 1993 and 1997. Preseli ESA which was surveyed in 1994 and was resurveyed in 1998. Moorland scheme which has had baseline surveys over the last two years. Tir Cymen Meirionnydd, where monitoring involved 36 heathland and 81 acid grassland sample sites drawn from a range of farms. 5.2.41 Both the Cambrian Mountains ESA monitoring and the Tir Cymen monitoring showed a rapid overall improvement in heather condition on existing heathland under agreement. This improvement in the condition of heather was recorded as a change in the number of heather plants showing signs of grazing. At the start of monitoring 14% of heather plants showed signs of grazing. At the 3 year resurvey this had dropped to just 1% of plants showing signs of grazing. This effect of a decline in grazed heather plants was also noted in 8 out of 9 sites in the Cambrian Mountains ESA. 5.2.42 Heather (Calluna vulgaris) on non-agreement land was grazed significantly more than that on land under ESA agreement. There was a significant increase in the amount of heather grazed near to tracks and paths and when there was more grass in the sward. The grazing behaviour of the sheep can therefore be shown to lead to a cycle of damage where sheep will graze on the more accessible heather. This in turn favours grass growth, encouraging further grazing and can eventually lead to loss of heather species. 5.2.43 Both ESA and Tir Cymen monitoring recorded an increase in bilberry cover during the survey period. 124 In addition, one quarter of the Tir Cymen heathland sites recorded increases in Calluna cover of between 15-20%. In a small number of cases the relaxation of grazing pressure led to very substantial increases in the percentage cover of cross-leaved heath (35%) and bell heather (14%). 5.2.44 Whilst by no means a problem on all sites, potentially invasive species fell into two main groups depending on soil moisture. On drier sites, there were problems with bracken and gorse, whilst on wetter land the difficulties were caused by purple moor-grass and soft rush. The monitoring programmes identified a range of possible solutions including increased shepherding as well as the introduction of regular burning, cutting and spraying regimes. Lowland Pastures and Haymeadows 5.2.45 Monitoring of lowland grasslands has taken place in the Cambrian Mountains and Radnor ESA haymeadows, and on calcareous grasslands in the Clwydian ESA. Within Preseli ESA land entered into the "reversion to haymeadow" category has been monitored. The Tir Cymen monitoring programme examined haymeadows and pasture in 112 sample sites from the three pilot areas. 5.2.46 The monitoring programmes set out to determine whether a reduction in nutrient inputs had led to any change in the percentage cover or diversity of characteristic herbs and grasses. Within the Radnor ESA, a range of haymeadows were surveyed in 1994 and again in 1997. Baseline monitoring was carried out in the Cambrian Mountains in 1996 and on the Preseli Reversion sites in 1995-96. These surveys were designed to examine changes in species diversity as well as soil conditions (pH and essential nutrients). In the three Tir Cymen areas initial surveys took place in either 1993 or 1994 with re-survey carried out in either 1996 or 1997. 5.2.47 The monitoring results highlighted the fact that three years is an extremely short period of time for recording change in grassland vegetation. In particular, since haymeadows are cut on an annual basis, there are no gross changes in vegetation structure from year to year. Furthermore, the species diversity of these habitats is readily influenced by weather conditions or the life cycle of certain plants (many of the scarcer orchids flower irregularly). As a result, species richness varies independently of agricultural inputs and conditions. 5.2.48 Despite the factors mentioned above, both ESA and Tir Cymen programmes demonstrated that there had been no deterioration in species diversity over the period of the surveys. ESA monitoring showed an increase in the percentage cover of species associated with low nutrient conditions. The more rigorously managed haymeadows (Tier 2) showed a trend towards increased species diversity. This trend, however, is not yet statistically significant. The Tir Cymen sites demonstrated the greatest increase in species diversity amongst stands that were relatively species-poor to start with. 5.2.49 ESA monitoring also demonstrated decreases in soil pH, extractable calcium, phosphorus and percentage of total nitrogen. As a result, it appears that after only three years, soil characteristics are reverting towards a status associated with less intensively farmed conditions. Not only will this reduce production levels, but ecological theory would also point towards a gradual increase in species diversity in such situations. 125 5.2.50 Within the Clwydian Range ESA, the ecological significance of large areas of limestone grassland led to the establishment of a monitoring programme designed to record changes in butterfly numbers over time. Characteristic habitats fell into three main groups comprising improved grassland on calcareous soils, semi-improved grassland which still retained some typical limestone species, and unimproved species-rich grassland. A far greater number of butterflies were recorded on unimproved grassland (1,467) than on semi-improved grassland (841) or unimproved grassland (256). Species diversity was also far greater on unimproved sites (24) than on semi-improved (20) or improved land (18). 5.2.51 Whilst still in the preliminary stages, analysis of butterfly populations demonstrates that species diversity and population levels are dependent on factors other than vegetation type. The degree of shelter from the wind, the presence of some bare ground and the availability of larval food plants are all critically important. At present, it is not always possible for these species-specific features to be taken account of within existing agri-environment schemes. Lowland Wetlands 5.2.52 Both ESA and Tir Cymen monitoring programmes have been directed at recording changes in species diversity and structure of vegetation under a range of management regimes. Whilst some sites were overgrazed prior to their entry into agreement, other sites were under managed and at risk from scrub invasion. The ESA monitoring programme concentrated on Radnor and the Lleyn Peninsula, with resurveys either carried out in 1997 or due for 1998. The Tir Cymen monitoring looked at a range of sites drawn from farms in each of the three pilot areas. Re-survey was completed in 1996 and 1997, a period of three years after the initial baselines. 5.2.53 Initial results from ESA monitoring demonstrated an increase in species diversity on those sites with the most stringent prescriptions aimed at habitat enhancement (Tier 2A). Many of these species were also characteristic of low nutrient conditions. Both the Radnor and the Lleyn Peninsula ESA and Tir Cymen monitoring found that on sites managed on the basis of habitat maintenance (ESA Tier 1A), species diversity was being maintained. Further investigations into the structure of individual wetland communities suggested that grassland and heathland areas had declined in height, whilst rush and purple moor-grass pastures remained largely unchanged. 5.2.54 Tir Cymen prescriptions for less intensive grazing, with a shift from winter to summer stocking, the burning of purple moor-grass (Molinia caerulea), the control of scrub and the blocking up of drains had resulted in substantial increases in the percentage cover of species such as meadowsweet (Filipendula ulmaria), angelica (Angelicas sylvestris) and heathers (Calluna vulgaris). However, the prescribed reductions in grazing had sometimes led to an increase in the cover of both bracken and scrub. 5.2.55 The RSPB carried out an ornithological survey of the Lleyn Peninsula ESA during 1996. Sites with the most stringent management conditions (Tier 2A) supported the greatest diversity of species and the largest populations. Further surveys of Ynys Môn revealed most of the survey sites were supporting overwintering populations of wading birds, although just two sites (10% of the sample) featured either breeding lapwing or curlew. Since a number of the sample sites appeared to represent ideal conditions for breeding waders, it is probable that the overall declines in wader populations are such that a number of optimal breeding sites now remain unoccupied. 126 5.2.56 CCW carried out additional work on marsh fritillary butterfly sites in South Wales in 1996 and 1997. All the sites were covered by a Tir Cymen Agreement. The results show close juxtaposition of new breeding sites/potential breeding sites and known major colonies. Marsh fritillary butterflies are a weak flying species and require a network of suitable sites spread across the general location of the main colony. In any one year the butterfly may be found on some, or all, of the suitable sites - the exact distribution depending on population fluctuations from year to year. Water Features 5.2.57 Both the ESA's and Tir Cymen schemes feature pond management. Detailed management prescriptions for water margins have been developed as part of the Habitat Scheme, and baseline datasets of mammals in water fringe habitats were collected by ADAS in 1996. Ten pond sites in the Radnor and Preseli ESA's were baseline monitored just before restoration in 1996 and immediately afterwards in 1997. Tir Cymen baseline monitoring surveys were carried out in 1993 or 1994 with a re-survey in either 1997 or 1998. This approach was only capable of measuring the impact of specific operations such as pond creation or ditch clearance, identified as capital works projects to be carried out after 1993/94 and before 1997/98. 5.2.58 Baseline monitoring of recently fenced water fringe habitats resulted in the trapping of 456 small mammals. Over 85% of the trapped individuals comprised wood mice with the remainder consisting of field vole (7%), bank vole (5%), common shrew (2%) and yellow-necked mouse (1%). Since wood mice utilise a wide range of habitats including mown grassland, whereas voles prefer thick grassland, bushy scrub and woodland, the percentage of the more demanding species is expected to increase in subsequent years. 5.2.59 The water fringe elements of both the Habitat scheme and the ESA's are popular options. In the Habitat Scheme 88 farmers have brought in water fringes covering an area of 118.9 hectares. 5.2.60 The ten pond sites surveyed prior to restoration under ESA Conservation Plans held an average of twenty taxa each (taxonomic groups of invertebrates such as pond skaters). On re-survey a total of seven ponds showed an increase in diversity which suggested that water quality had also increased. Since ponds generally take at least two years to recolonise after major restoration work, the results provide encouraging signs of an overall improvement in environmental quality. 5.2.61 Tir Cymen botanical monitoring recorded significant increases in wetland species, such as lesser spearwort and water forget-me-not in over 30% of the newly created pond sites examined. Concern was expressed regarding access for cattle to these pond sites. Stock can pose a particular problem if grazing alongside ponds surrounded by improved land, although mosaics of wetland vegetation adjacent to a pond site will often benefit from grazing. Muddy areas, in particular, can provide highly suitable sites for dragonflies. Similar issues exist on grazing marshes where the limited creation of areas of bare mud alongside open ditches will benefit many invertebrates, provided water quality is not unduly degraded. 127 Coastal Belt Vegetation 5.2.62 ESA, Habitat Scheme and Tir Cymen monitoring programmes have been directed at recording changes in species diversity and vegetation structure under a range of management regimes. Whilst some sites were partially improved for agriculture prior to their entry into agreement, other sites were under managed and at risk from scrub invasion. 5.2.63 The ESA monitoring programme concentrated on cliff top grazings in the Lleyn Peninsula and Ynys Môn, with baseline surveys in 1989 and 1994 respectively. Re-surveys were carried out in 1993 and 1997 after a four or three year period. A further baseline survey of the Lleyn was carried out in 1995 following the revision of the ESA. Habitat Scheme monitoring covered ten sites at baseline level, mainly from the coastal cliffs of Ceredigion. The Tir Cymen monitoring programme was based on fourteen samples. Surveys were carried out in 1993 and 1994 with re-surveys in 1996 and 1997. Almost all of the sand dune and cliff top grazings were located in the Swansea District. 5.2.64 The ESA monitoring programme for the Lleyn Peninsula was based on the analysis of three representative cliff top plant communities comprising acid grassland, maritime grassland and neutral grassland. After four years the re-surveys of acid and maritime grasslands demonstrated an increase in percentage cover of those species characteristic of low nutrient conditions. There was, however, no change within the neutral grassland communities, possibly due to the buffering capacity of the rather deeper soils that underlie this vegetation type. The results show that ESA management has either maintained or enhanced the ecological value of the cliff top grazing study sites. 5.2.65 Monitoring of forty ESA sites within Ynys Môn covered a diversity of sites ranging from coastal heaths with western gorse and bell heather through to exposed cliff top grasslands. The latter sites possessed generally low-growing vegetation and were very diverse in terms of species. Re-survey was carried out in 1997 and showed an increase in species diversity within the heathland stands. This is particularly encouraging, since without active management such areas can easily develop into speciespoor scrub dominated by common gorse. A rather different trend towards an increase in the percentage cover of maritime plants was observed within the cliff top grasslands. This increase in percentage cover followed two hot, dry summers and paralleled an increase in the levels of soil sodium across all of the coastal sites surveyed. As a result, the beneficial changes that were recorded may owe as much to natural factors as to changes in agricultural management. 5.2.66 Results from the Tir Cymen monitoring indicated that there had been little change within either the saltmarsh or the sand dune communities covered by the survey. These sites were all of high wildlife value with a diversity both of species and vegetation structure. Several of the sites were characterised by substantial transition zones between different types of vegetation with sand dunes grading into either freshwater marshes or saltmarsh. This is a characteristic of many Welsh coastal sites and contributes significantly to the ecological importance of the areas concerned. Arable Land 5.2.67 Arable land comprises only a small percentage of the existing agri-environment schemes areas with the exception of Swansea and Gower. Detailed studies have so far been confined to the traditional arable 128 lands of Gower, together with a detailed appraisal of the reintroduction of arable cropping onto selected sites in Dinefwr. Botanical studies were carried out on eighteen farms in Gower and four in Dinefwr during the summer and autumn of 1997. The RSPB surveyed seven Dinefwr farms for birds during the summer of 1997 and the winter of 1997/98 and will continue for a further two years. 5.2.68 Tir Cymen monitoring concentrated on an examination of arable fields that had been left untreated by either herbicides or other pesticides. A tremendous variety of arable weed species (145) was recorded during the botanical survey. A substantial proportion of these comprised broad-leaved species that have either declined or disappeared entirely in other parts of Britain, including corn marigold (Calendula segetum), stinking camomile (Anthenus cotula), cut-leaved dead nettle (Lamium hybridum), field woundwort (Stachys arvensis) and field pennycress (Thlaspi arvense). One small population of narrowfruited cornsalad (Valerianella dentata) was the first recorded in Glamorgan for over fifty years. 5.2.69 The botanical work showed that the arable weed flora differed significantly depending on past management. Swansea's long history of mixed arable farming was reflected in a greater diversity of species and a range of nationally scarce plants, as well as the presence of plants suggestive of previous intensive management such as wild oat and pineapple mayweed. Sample sites in Dinefwr where fields had been ploughed and cropped for the first time in over 30 years, showed sparse arable weeds and a lack of indicators of previous intensive management. Historic Features 5.2.70 The 1997 resurvey of historic features for Ynys Môn ESA looked at a stratified sample of 24 Ancient Monuments, assessing any change since baseline survey in 1994. Out of the 8 monuments on ESA agreement land, there was no loss of recorded archaeological or historic features, therefore meeting the requirements of the first Performance Indicator (see Appendix 1). Only 1 of these 8 monuments may have suffered increased risk of damage. This was a historic feature which was not immediately visible on the ground. 5.2.71 In Radnor ESA, 28 historical monuments were examined during the interim resurvey. Ten of these features were on agreement land. Changes that occurred to monuments were not necessarily detrimental. For example, one monument on agreement land, had land that had been ploughed, but to a depth which may not have disturbed any archaeological features. Another monument had been used as a rubbing stone by stock, but the extent, if any, of deterioration since entering the ESA scheme was not clear. On nonagreement land, 5 monuments had encountered changes. Four of these changes were caused by detrimental agricultural operations and 1 was in a more stable condition with nearby trees removed. 5.2.72 Of the 35 Unscheduled Historical Monuments (USAM's) on Preseli ESA, the 9 on agreement land had not been lost. This compares to non-agreement land where two monuments had been completely removed since baseline survey. 5.2.73 Of the 9 sites on agreement land 3 had recorded some damaging operations. This included damage to earthbanks by livestock trampling on one site. Changes recorded the other 2 sites were confined to gorse burning, which leads to heat damage and increases the chance of grazing and erosion. On nonagreement land 11 of the 26 sites had suffered changes. Nine were detrimental including two that were 129 removed. One site was under threat from bracken encroachment and the other had been fenced out to protect from stock damage. 5.2.74 In the Clwydian Range ESA 3 USAM's were examined on agreement land and 14 on non-agreement land at resurvey. No alterations to the sites on agreement land were found, so the Performance Indicator has been met within this very limited sample. On non-agreement land 3 sites showed signs of detrimental change. 5.2.75 Tir Cymen monitoring examined ten farms in Meirionnydd and Dinefwr, representing a variety of landscapes, terrain and historical value. Work was carried out by Gwynedd Archaeological Trust and Dyfed Archaeological Trust (1997). Results revealed that of the 147 archaeological and historic features recorded within Meirionnydd only 36 had previously been recorded. Similar results were found for Dinefwr. 5.2.76 The majority of these new sites were of district or local importance only. It was also evident that most were located within existing moorland, acid upland grassland and wetland, suggesting that many Welsh upland archaeological features can be conserved by the management prescriptions developed for each of these habitats. 5.2.77 The monitoring showed that only isolated cases of stone removal were recorded in both Meirionnydd and Dinefwr. No significant damage to historic features was revealed. Traditional Field Boundaries 5.2.78 Protection of existing field patterns and boundaries forms an important part of management prescriptions for both Welsh ESA's and Tir Cymen areas. In addition, voluntary management works such as hedge laying and stone walling are encouraged. 5.2.79 Field boundaries have been monitored in all ESA areas with Baseline and Resurvey results available for four ESA's: Radnor, Ynys Môn, Preseli and Clwydian Range. The features were monitored using a stratified random sample of field boundaries within sample squares, distributed throughout the ESA. The baseline results for the four ESA's were broadly similar and are summarised below: ! ! ! a very low percentage of traditional boundaries surveyed (<6%) were stockproof in themselves, unless supplementary fenced. This highlights the value of protecting stockproof boundaries under Tier 1 of the ESA scheme, and encouraging the creation of stockproof boundaries through good management practices. a high percentage of traditional field boundaries (62%-81%) were present within the sample areas, compared to wire fences or other non traditional boundaries. As traditional field boundaries are protected under the ESA scheme, their dominance within the sample was encouraging. the majority of traditional field boundaries surveyed (72%-89%) had supplementary fencing to provide stock control. This illustrates that within the sample, farmers did not rely on traditional field boundaries to control stock, although they are still valued for the shelter they provide. They are also perceived as enhancing the landscape value of the farm. The reasons for this change are the increased intensity of stocking rates possible in modern livestock farming, and a shortage of skilled labour to maintain the boundaries in a stockproof condition. 130 5.2.80 The resurvey results were broadly similar for all four ESA's discussed above (i.e. Radnor, Ynys Môn, Preseli and Clwydian Range ESA's). A summary of findings is listed below: ! ! ! ! the level of change within the sample areas has been small. no changes to traditional boundaries have taken place on land in ESA agreement which represent breaches of ESA management prescriptions. However, removal or degradation of traditional field boundaries has taken place on land not in ESA agreement. The extent of this varied between the ESA's monitored. land in ESA agreement has shown an increase in the amount of hedgerow management, chiefly relating to those activities promoted under Tier 2C of the ESA scheme (i.e. hedgelaying, coppicing and planting). within the sample area, the ESA scheme has been successful at maintaining traditional field boundaries and has encouraged their positive management, compared to land which has not entered ESA agreement. However, positive management works have been noted on land not in ESA agreement, though not to the same extent. 5.2.81 The Tir Cymen monitoring examined landscape change and the quality of field boundary restoration work on 140 farms under agreements, within the three pilot areas. Baseline surveys were carried out in either 1993 or 1994 with re-surveys three years later in 1996 or 1997. 5.2.82 Results of the monitoring suggest that suitable capital works programmes had been initiated. Also, the restoration and/or maintenance of existing boundary features in 92% of sites sampled had been successful. Where problems had been recorded, the main cause was failure to leave sufficient young hedgerow trees in place during hedgelaying. Although this was less problematic in coastal lowlands, where hedgerows are scarce, it does raise an issue in heavily wooded landscapes. 5.2.83 Monitoring also assessed the standard of capital works, carried out on traditional boundaries. 84% of agreement holders had carried out works to an acceptable standard. Most problems recorded were caused by poorly constructed fences (7%) or loss of newly planted shrubs due to grass growth or rabbits (7%). In these cases the agreement holders would not have been paid for the work or the work would have been rectified as a precondition of receiving further management payments. Countryside Access 5.2.84 The Tir Cymen scheme's access category includes responsibilities to maintain existing Public Rights of Way, together with the opportunity to create new access areas and linear routes. Additional access must also be made available on all areas of moorland, heathland and unimproved upland grassland entered into the habitat management sections of the scheme. Within the ESA scheme farmers may establish new routes for public access upon their farmland. Specific payments are available in both schemes in return for creating new public access areas, footpaths, bridleways and routes for disabled people on enclosed farmland. 5.2.85 Monitoring of the first three years of the Tir Cymen access provisions was carried out during 1996 and 1997. The study concluded that after only three years some 27.6 square kilometres of farmland (primarily moorland and upland grassland) was available for new public access. This constituted some 131 8.6% of the total area of secured access within Wales. In addition a further 700 kilometres of Public Right of Way (PRoW) were incorporated into agreements, along with 43 kilometres of new permissive paths. Taken together these totals comprised some 2% of the total length of linear access provision within Wales. 5.2.86 Whilst the monitoring did discover some isolated instances of obstruction on Public Rights of Way, these tended to occur on routes that were perceived by farmers as not being used. Since the most recent data obtained by CCW indicates that approximately 20% of PRoW in Wales are either impassable or usable only with great difficulty, the survey suggests a significant improvement in accessibility had taken place on the 556 study farms. Monitoring has not been carried out on ESA agreement land. Conclusion 5.2.87 The monitoring evidence indicates that existing agri-environment schemes have succeeded in maintaining and enhancing valuable habitats, landscape features and archaeological sites on land under agreement in Wales. Information derived from the monitoring of these schemes, and the feedback from Project Officers, has been used in the design and development of the new Tir Gofal scheme. Current Hill Livestock Compensatory Allowances (HLCAs) 5.2.88 The Hill Livestock Compensatory Allowance (HLCA) scheme in Wales is operated under an EU directive which continues the UK Government's long-standing commitment to compensation to agriculture for locational difficulties, and also aims to maintain population levels and conserve the hill and upland environment. HLCAs are currently paid according to the number of breeding cattle and sheep kept annually on hill and upland farms within the designated Less Favoured Areas of Wales, which comprises over three quarters of its agricultural area. 5.2.89 The scheme was evaluated by the Welsh Institute of Rural Studies in March 1998 in a document entitled "LFA Policy in Wales: A Review of the Socio-economic and Environmental Effects of the HLCA Scheme". A copy of this report is at Appendix 4. 5.2.90 The three basic objectives of the report were: ! ! ! to examine the rationale for providing Government support to livestock farmers in the Welsh LFA; to assess the effects of the HLCA scheme in Wales against the stated objectives of maintaining the viability of livestock farming in the LFA, maintaining populations in, and conserving the environmental value of, those areas; and to consider whether the scheme represents value for money. 5.2.91 The report underlined the continuing importance of HLCAs to the viability of hill farms. It emphasised that although the value of allowances had fallen over recent years, and despite the larger amounts payable under the EU livestock premia, HLCAs still remained critical to farmers' incomes and especially to many of the smaller family farms, acting as an important safety net in bad years. It follows, therefore, that HLCAs have helped keep people living and working in the Welsh LFA and indirectly, 132 therefore, have contributed to the maintenance of social and cultural life. In Wales this has also helped sustain the Welsh language which is the first language of a high proportion of farming families in the LFA. The report concluded that without HLCAs there would be fewer and larger farms. HLCAs were also comparatively inexpensive to administer: only 3 - 4% of the budget is attributable to administration costs. 5.2.92 However, the report highlighted that the existing scheme has its shortcomings. In particular, it argued that it paid larger farmers more than is necessary to keep them farming, and paid too little to the smaller holdings. It also argued that HLCAs are implicated in the ecological deterioration that has occurred in the Welsh uplands. The report acknowledged that it was difficult to separate the effects of HLCAs from other headage based livestock schemes, notably Sheep Annual Premium (SAPS), but argued that as a headage payment, HLCAs were exacerbating grazing pressure. European Agricultural Guidance and Guarantee Fund : Objective 5b Measures Introduction 5.2.93 Over the period 1987-1993, the Dyfed, Gwynedd, Powys area benefited from Community Support Frameworks worth £121m. Within this, three programmes were in operation: ! ! ! The National Programme of Community Interest (NPCI) The Integrated Development Operation (IDO) The Operational Programme (OP) 5.2.94 The NPCI was approved in May 1988 and was then incorporated into the IDO when it was approved in May 1991. The NPCI/IDO operated until the end of 1991 and was replaced by the Operational Programme which ran over the 1992 -1993 period. Objectives of the NPCI/IDO 5.2.95 These programmes ran from May 1988 to the end of 1991 and originally only included assistance from the European Regional Development Fund (ERDF). The European Social Fund (ESF) element of the programme was introduced as part of the IDO and addressed a series of labour market issues including unemployment, skills shortages and training in new technology. The Objectives were delivered under five priorities: Priority 1 - Transport and Communication - To improve road, transport and communication links within the programme area in order to reduce the impact of its peripheral location. Priority 2 - Economic Infrastructure - To improve the area's economic infrastructure in order to assist the operations of existing firms and industries, stimulate new development both for industry and tourism, and so broaden the economic base, and promote new indigenous initiatives and development. Priority 3 - Industry - To support and promote new industrial initiatives within the programme area. The aim was to strengthen the manufacturing, agricultural and fishing sectors; encourage diversification and "value added" activities; and attract new enterprises to the area. 133 Priority 4 - Tourism - To promote and optimise the development of tourism within the programme area. This included the provision of new visitor attractions, improved support facilities and accessibility and increased visitor accommodation. Priority 5 - Environment - To improve environmental conditions in areas identified for industry and tourism development, in order to raise the economic potential of these areas. This was to focus on restoration following extraction associated with primary industries, and the enhancement of the main transport corridors. Evaluation 5.2.96 Few physical output targets were established for the above priorities. Some were difficult to measure because of the lack of baseline data, and others were considered optimistic. Virement was required due to underspend in various priorities. Overall, around 95% of allocated funds were committed under these programmes ("Ex post Evaluation of the Dyfed, Gwynedd and Powys 1987 - 1993 NPCI/IDO and Objective 5b CSF"- Final Report, ARUP, 1998). Objectives of the Operational Programme 5.2.97 This programme operated during 1992 and 1993 and continued the strategy of the NPCI /IDO programmes. With the approval of the Community Support Framework (CSF) in 1990, this programme was based on new but similar objectives to the previous programmes. These were expressed as five priorities, namely: Priority 1 - Economic Development and Diversification - To provide assistance for the provision of sites and promises, business development and tourism access and environmental improvements. Priority 2 - Tourism - The development of new and improved facilities and attractions. Priority 3 - Development of Human Resources - To address problems associated with unemployment, skill shortages and industrial restructuring through training and wage support measures. Priority 4 - Minimising the Problems of Peripherality - Upgrading of roads, the rail network, fishing harbours and exploiting the potential of IT. Priority 5 - Development of Multi-Objective Infrastructure - To improve the road and rail network, electricity supplies, water and sewerage systems, flood control, waste disposal and land reclamation. Evaluation 5.2.98 Quantified targets were established for each of the priorities based on forecast outputs and impacts of projects. Virement was again required to meet the increased commitments in certain priorities due to privatisation of utilities et al. Overall, a total of 95% of ERDF funds were committed under this programme ("Ex post Evaluation of the Dyfed, Gwynedd and Powys 1987 - 1993 NPCI/IDO and Objective 5b CSF"- Final Report, ARUP, 1998 : Appendix 5). 134 Summary 5.2.99 The programmes operated between 1988 to 1993 and were the first attempts to move to integrated area strategies. The strategies did pinpoint key problems and issues within the programme area although the responses mainly concerned physical infrastructure. The Guidance section of the EAGGF was not included in the 1989 - 1993 Objective 5b programmes and this limited the degree to which specific rural/agricultural actions could have been addressed in the programme. Many of the issues arising from these programmes, such as the lack of support for innovative or distinctively rural projects, realistic target setting et al, were addressed in the successor to these programmes - Objective 5b 1994-1999. Objective 5b : 1994 - 1999 5.2.100 The Objective 5b programme for 1994 - 1999 was divided into three Priorities, each of which contained a number of Measures. The three Structural Funds - European Social Fund (ESF), European Regional Development Fund (ERDF) and European Agricultural Guidance and Guarantee Fund (EAGGF) were available under these three Priorities. The inclusion of EAGGF funding in the 1994 - 1999 programme ensured that within the strategy there was a strong rural dimension addressing the needs of the farming community. Priorities and Measures were as follows: Priority 1: Business Development Measure 1 Measure 2 Measure 3 Measure 4 Measure 5 Measure 6 Development of Agriculture and Forestry Sites and Premises Business Support Infrastructure Business Support Services Employment Support Schemes Skills Training Priority 2: Development of Tourism Measure 1 Measure 2 Measure 3 Measure 4 Attractions and Facilities Information and Marketing Training for Tourism Agri-tourism Priority 3: Countryside Management and Community Development Measure 1 Measure 2 Measure 3 Countryside Enhancement Rural Services Developing Skills in Rural Communities 5.2.101 Of the £130.75 million allocated to Objective 5b in rural Wales, over half (56%) of the resources under the Single Programming Document (SPD) were devoted to Priority 1(Business Development) which includes assistance to agriculture, forestry, manufacturing and service businesses. Around 29% of all resources was allocated to Priority 2 (Tourism) and 14% allocated to Priority 3 (Countryside Management and Community Development). (Interim Evaluation of the rural Wales SPD 1994-1999, Pieda, 1997 : Appendix 6). 135 Agriculture 5.2.102 Agriculture has traditionally been the basis of the whole economy of rural Wales, and continues to be an important aspect of the economy. However, structural changes within the industry combined with changes in social structure have had a significant impact on the area. Care has been taken to avoid duplication with actions funded under Objective 5a. Specific actions have been identified as being suitable for assistance under Objective 5b, and the different problems of the sector have been addressed under each of the three relevant priorities. These were funded specifically through EAGGF and are as follows: Priority 1 Measure 1 - This concentrated on activities such as business advice, training, product innovation, marketing, processing and joint activity, which could not be funded through Objective 5a. This also included assistance to selected forestry projects. Projects undertaken under this Measure include organic farming, forestry, training, support and advice, group business activities, development of food products et al. Examples of projects are at Appendix 7. Priority 2 Measure 4 - This measure encouraged farmers to take advantage of opportunities within tourism as a means of diversifying their activities and enhancing their income. Projects under this Measure include marketing, networking, development of "green" tourism, capital grants for attractions et al. Examples of projects are at Appendix 7. Priority 3 Measure 1 - This financed environmental enhancements on farms, whilst also impacting on the quality of life for other people living in the rural community and increasing the capacity of rural areas to attract tourists. Projects under this Measure included environmental management, countryside enhancement, advice, training and capital grants. Examples of projects are at Appendix 7. 5.2.103 Full details of the above Measures and their objectives are at Appendix 8. Other Sectors 5.2.104 In addition to agriculture, there were broader economic issues needing to be addressed in order to ensure that the dependence of rural Wales on agriculture was reduced. Such developments had to be compatible with the environment and sympathetic to the needs of the rural community. The aim was to stimulate new economic activity to encourage existing businesses that were indigenous to rural Wales and also to create the conditions that would attract inward investment. These issues were addressed under the other priorities. Evaluation Interim Evaluation 5.2.105 An interim evaluation of the Rural Wales Objective 5b programme was undertaken in 1997 by the consultants Pieda on behalf of the Welsh Office. This reviewed various aspects of the Single Programme Document (SPD) including the baseline data and priorities upon which the programming document was based. The report outlined that at that time it was not possible to comment on the impact of the SPD as most of the available data related to 1995 - only a year after the approval of the programme. However the 136 key characteristics and priorities were considered to remain valid and were not considered in need of revision. Funds 5.2.106 By the end of 1996, 48% of the Structural Fund allocations had been committed to approved projects, and a further 12% of Programme resources were approved in principle. A higher proportion of ERDF funds had been committed (53%) than ESF (43%) or EAGGF (39%). The programme was considered to be well advanced in terms of approving project expenditure (Pieda, 1997). Outputs 5.2.107 The Pieda report outlined concerns on both reported and forecast outputs some of which were regarded as unrealistic and of limited value in providing a reliable basis for monitoring the programme. There was a suggestion that the appraisal system could be flawed, and there was concern that in some areas there was not sufficient reliable performance data for determining the performance of the programme. However, some output measures were considered to be robust and good progress was being made in delivery of those outputs. Additionality was generally considered to be at a high level; displacement was low, with most risks likely to be in the tourist sector. Recommendations 5.2.108 The following comments were outlined in the Pieda report with regard to EAGGF Measures: Measure 1, Priority 1 - Development of Agriculture and Forestry The project reviews undertaken against this measure suggested that in the early rounds of the Programme, a high proportion of resources were being directed to training or guidance activities. There was potential for duplication with other Measures ( training). As a result, an Advisory Group was established to examine this, and a recommendation was made to place greater emphasis on supporting productive investment in diversification and value-added activities. Measure 2, Priority 4 - Agri-tourism At the time of the interim evaluation, there had been little activity under this Measure, with a lack of projects coming forward for approval. This was partly attributable to the availability of previous schemes or to the problems of asking small operators to work together. It was envisaged that a grant put forward for approval from the Wales Tourist Board would address these sectoral issues. Measure 3, Priority 1 - Countryside Enhancement This Measure was well regarded and project reviews indicated that schemes were achieving the proposed targets. Cost per job was considered high but employment was not a main objective of this measure. 5.2.109 In addition, a number of recommendations were made regarding revised targets for the Programme, Priorities and Measures which would assist in future monitoring. These are summarised at Appendix 7. 137 Progress on Recommendations 5.2.110 The Welsh Office Agriculture Department Rural Development Grant was introduced as a "last resort" source of match funding for project applications for Round 3 of the Programme. This has continued to be available to date (now Round 9) and has proved invaluable to many projects. 5.2.111 A new Secretariat, the Welsh European Programming Executive (WEPE) was set up in 1997 as a stand alone body to administer European Structural Funds in Wales - work previously undertaken by the Welsh Office. Its role included the promotion of the funds, appraisal of applications, issue of grant approvals and providing advice to organisations in Wales on matters relating to the funds available. 5.2.112 Generally the majority of the recommendations put forward in the Interim Evaluation were taken up by the Technical Group and the Monitoring Committee. Appendix 9 summarises the recommendations of the Interim Evaluation and the action points recommended by the Technical Group. With regard to EAGGF measures the main points were as follows: Measure 1, Priority 1 - The Technical Group did not recommend action to the Monitoring Committee as members were satisfied that sufficient quality projects were being put forward under this measure. Measure 2, Priority 4 - The Technical Group recommended virement of 10% of resources from this measure to Priority 3 Measure 1. The Group were of an opinion that the demand for agri-tourism had been addressed by other measures and that there was a difficulty in take-up as grants were not readily accessible to individual beneficiaries. 5.2.113 The 1994-1999 Objective 5b programme is still currently in operation and so a final ex post evaluation has yet to take place. It is intended that the final evaluation should be carried out around 18 months after the completion of the programme. This would allow a large proportion of all projects to be completed whilst ensuring that the relevant project sponsors with detailed knowledge of the implemented projects would still be in place. In addition, this time span will allow the overall impact of the programme on the wider rural economy to become more apparent. LEADER II : 1994 - 1999 Introduction 5.2.114 The main aim of the LEADER II programme for Wales (1994 - 1999) was to pilot innovative, sustainable and transferable local community-integrated rural development programmes as models of excellence, which are transferable within Wales, the UK and Europe. 5.2.115 Five objectives were identified to achieve this aim: ! to promote the positive aspects of rural community development through grass root activity; ! to encourage local community enterprise and economic growth in rural areas of Wales; ! to facilitate models of best practice in the local community; ! to encourage projects of excellence for transfer to other areas in Europe; ! to promote local, regional, national and transnational co-operation and partnerships in the development of local community initiatives. 138 5.2.116 In order to achieve these aims, LEADER II activities were defined under three priority actions or Measures. These Measures emphasised the local community led philosophy of LEADER II, its focus and transferability in project development and its intention to develop areas of transnational co-operation. They were as follows: Measure A - Acquiring Skills - To ensure that LEADER groups and local communities are appropriately equipped to deal with the philosophy and implementation of LEADER. The strategic objectives of this Measure were: ! to enable LEADER areas to analyse the strengths and weaknesses within their communities as a basis for development and continuing assessment of specific elements of their programmes; to ensure that the benefits of LEADER are disseminated to the local population; to provide technical support for potential beneficiaries in the development of Local Plans and in seeking finance and preparing applications. ! ! This allowed assistance for activities such as an analysis of the area's needs, motivating and training local people to actively participate on the development process, developing local partnerships and defining a local development strategy. Measure B - Rural Innovation - To encourage local community development in Rural Wales through the adoption and strengthening of a variety of community enterprise models piloting innovative and transferable projects for the benefit of the communities in Wales, UK and the rest of Europe. The strategic objectives were: ! to enhance local community development and experimentation through support for a network of local action groups; to promote innovative and transferable projects within a balanced framework of priority measures appropriate to the local context in which local action groups operate; to encourage piloting of models of best practice in the rural setting; to facilitate "bottom up" approaches to meeting the needs of the area. ! ! ! This allowed assistance for a number of sub-measures including technical support; training and recruitment; rural tourism; small firms, craft enterprises and local services; local exploitation and marketing of agricultural , forestry and fisheries produce; preservation and improvement of the environment and living conditions. Measure C - Transnational Co-operation - To encourage joint activity and working between LEADER Groups in Wales and in other eligible areas throughout the EU. This measure encouraged participation in projects with at least two other Member states, in any area of rural development. 139 5.2.117 The LEADER II Programme in Wales has eight Local Action Groups (LAG's), four which have continued from LEADER I and four new LEADER II groups. Each LAG has its own Business Plan which addresses the strategic objectives of the LEADER II Programme. The financial allocation of the programme amounting to £7,742,980 was split up as set out below. Wales LEADER II Allocations by LEADER Area LEADER Area Antur Cwm Taf Tywi Antur Teifi Cadwyn Cymad Menter Môn Menter Powys Menter Preseli SPARC Total *at an exchange rate of 1.359 ECU/£ LEADER Allocation £* 367,800 1,109,520 1,065,370 1,545,250 1,056,540 1,259,630 791,640 547,230 7,742,980 5.2.118 The activities promoted by the LEADER Groups in Wales are complimentary to those contained in the Objective 5b Rural Wales Strategy and augment the main programme by providing support for innovative pilot projects or projects that are inherently of greater risk. LEADER II specifically provides support for grass root or community based actions. 5.2.119 The Rural Wales Strategy (Objective 5b) covered the priorities of: ! ! ! ! ! ! adaptation and diversification of agriculture and forestry; the development of small and medium enterprises; the development of tourism and leisure; minimising the problems of peripherality; safeguarding the Rural Wales environment; strengthening rural communities. 5.2.120 LEADER II centred on local community participation in development of activities and projects. The very nature of innovation, with its accompanying risks and the process of developing projects together with the inherent need for transferability, sets embryonic projects aside from those usually entertained by the Objective 5b programme. Some of the successful projects could, however, be nurtured to a level suitable for consideration and implementation via the Objective 5b programme. 140 Management and Organisation of LEADER II 5.2.121 LEADER groups are required to submit a business plan for approval on an annual basis to the Secretariat of the Objective 5b programme. The Secretariat then consults widely with strategic agencies and relevant Government departments in Wales to ensure that the proposed activities conform with Government policy. The business plans are then submitted to the Technical Group of the Objective 5b programme for approval, reporting to the Monitoring Committee. After approval, LEADER groups are required to submit quarterly reports and audited accounts to the Secretariat on the progress of projects. 5.2.122 The implementation of the programme was undertaken by the Welsh Office from June 1994 until October 1997. After this date, an independent Secretariat, the Welsh European Programming Executive (WEPE) was created which took over the management of LEADER under the Objective 5b Programme. WEPE also act as Secretariat to the Monitoring Committee - a task previously provided by the Welsh Office and the Department for Education. The responsibilities of WEPE are : ! ! ! ! ! ! ! to facilitate the effective working of the Objective 5b Monitoring Committee and the other Structural Funds Committees (including the Technical Group); to provide information, advice and assistance in respect of the Structural Funds; to provide efficient and effective management of the Business Plan application and approval process; to monitor the physical and financial preparation of the Programme; to publicise and promote the Programme and to contribute to the development of policy on Structural Funds; to conduct or commission evaluations on the performance and impact of the Programme; to account for the administrative efficiency of the Programme. 5.2.123 In addition to the formal implementation arrangements outlined above, the Wales LEADER Network has a growing role in the implementation of the LEADER Programme. Now established as a limited company, the network is comprised of the eight LEADER Groups and is set up as a collaborative effort to progress and promote the LEADER Programme in Wales. Issues within the LEADER Area 5.2.124 The area suffers from low levels of socio-economic development and agricultural income and sparsity of population whilst retaining a high dependence on agricultural employment. The following are key issues in the direction and development of LEADER Business Plans: Reliance on Agriculture - Much of the land is of poorer agricultural quality, with a high proportion designated as Less Favoured Area hence traditional livestock enterprises dominate. Unemployment - this tends to be higher than for the rest of Wales due to the reliance on seasonal employment such as agriculture and tourism. The lack of opportunity for employment is exacerbated by the lack of a suitable skills base. Age Structure - Out migration of young people in search of work and in-migration of older retiring people. The resulting older age structure means a decrease in skills base, lower Gross Domestic Product and a greater demand on public services. 141 The Problems in the Agriculture Sector 5.2.125 The agriculture sector accounts for around one fifth of employment in Rural Wales, and farming remains vitally important as a source of income and identity for most rural communities. The Welsh agricultural sector has experienced a number of major challenges and problems in the 1990's: ! ! ! ! continuing dependence on Hill Livestock Compensatory Allowances and other schemes to support farmers in Less Favoured Areas; the BSE crisis and the ban on British beef exports; the appreciation in the value of sterling, which has caused a revaluation of the exchange rate at which EU agriculture intervention prices are converted into UK currency, affecting incomes; deregulation of the milk industry since 1994 putting pressure on farm gate prices for milk. 5.2.126 These problems have put more onus on the integrated development approach facilitated by LEADER. The LEADER Groups have responded by: ! ! ! ! developing a number of direct responses to the challenges such as piloting actions to improve the quality and market image of local produce and to support research; developing a range of projects that have potential to add value to farm food and non-food products, and package these for local and wider markets; seeking to develop alternative sources of income for farming households, through farm based tourism, pluriactivity, agri-environment measures etc.; seeking to diversify and develop the range of business and other skills held by members of the farming household in order to compete effectively in wider markets. 5.2.127 LEADER projects range from wood added-value and organic farming networks to community tourism, telematics and farmers markets. Evaluation Interim Evaluation 5.2.128 An interim evaluation of the LEADER II Programme was undertaken in 1998 by Roger Tym and Partners on behalf of WEPE (for full details see Appendix 10). This reviewed various aspects of the programme, including the baseline data, financial spending, project outputs, and management and development processes. The overall conclusion was that the Wales LEADER II Programme was operating via the eight LEADER groups with a substantial degree if independent action, giving almost the appearance of eight mini programmes. This represented a diversity of approach in the implementation of LEADER II in Wales which could be seen as a strength of the Programme. However, the report outlined a need to draw together the experience and achievements to present a holistic view of LEADER in Wales, to encourage the wider adoption of best practice and to encourage a more cohesive working of the eight LEADER groups. 5.2.129 The report confirmed that the rationale and context of the LEADER II Programme remained valid, with acknowledgement that the agriculture crisis was worsening persuading some LEADER Groups to 142 address this through developing a stronger agricultural element in their activities. 5.2.130 The assessment of the operational processes of the programme identified areas for improvement in management structures, funding and administration and the use of Business Plans. 5.2.131 The results of the output analysis showed very positively that project targets in the majority of indicator areas were being achieved. Recommendations were made for the reform of the monitoring system for EAGGF and ERDF outputs, to improve the achievement of targets for specific sector projects. Actual spend against allocations was low although this was partly attributed to the late approval of Business Plans. Progress to Date 5.2.132 Generally the majority of the recommendations put forward in the Interim Evaluation were taken up by the Technical Group and the Monitoring Committee. Appendix 11 summarises the recommendations of the Interim Evaluation and the action points recommended by the Technical Group, and agreed by the Monitoring Committee. 5.2.133 The LEADER II Programme is still currently in operation and so a final ex post evaluation has yet to take place. The final evaluation would benefit from being carried out around eighteen months after the closure of the programme. This would allow a large proportion of all projects to be completed whilst ensuring that the relevant project sponsors with detailed knowledge of the implemented projects would still be in place. In addition, this time span will allow the overall impact of the programme on the wider rural economy to become more apparent. 143 5.3 OTHER INFORMATION 5.3.1. The description of the current situation in Section 5.1 is intended to provide a comprehensive basis for an assessment of the problems facing rural Wales; similarly the measures described in Section 5.2 are described on a comprehensive basis. Accordingly there is no further information provided in this Section. 144 6.1 : STRATEGY AND PRIORITIES 6.1.1 This first part of this Section provides a vision for the development of the whole of rural Wales, identifying problems and assessing priorities and proposed actions on a holistic basis; the second focuses more closely on the strategies and actions which can be pursued under the Rural Development Regulation. National Economic Development Strategy 6.1.2 The overall framework for development of rural Wales is being set by the National Economic Development Strategy, which has foreshadowed the adoption of challenging strategic objectives based on targets for increases in GDP to levels closer to those for the UK and the European Union and for raising the performance of the less well-off regions of Wales closer to that of the best, sustainable development. 6.1.3 Attaining these targets will require increased levels of economic growth, so that GDP per head rises towards Welsh, UK and EU averages by the end of the period covered by the plan. However it must be recognised that convergence with these levels of prosperity will take considerably longer than the 7 years of the plan period. 6.1.4 The vision underpinning the comprehensive statement on Rural Wales, which was presented to the Assembly in July 1999 by the Rural Partnership for Wales, an advisory body with a broad membership reflecting economic, environmental and cultural interests in the region, remains valid. The vision, which was endorsed by the Partnership, was based on: ! a sustainable society - a population with a balanced age structure which recognises and nurtures indigenous cultures, living in thriving communities with access to public services which meet local needs and where people participate in the process of making decisions about their own future; a sustainable economy - that provides prosperity for all rural communities through increased economic activity and higher incomes and which offers a variety of employment opportunities in a range of industries and services; a sustainable environment - where the natural and built heritage are conserved, enhanced and managed as a positive asset; a sustainable policy framework - that ensures the integrated development and coherent implementation of the policies and programmes that affect rural Wales. ! ! ! 6.1.5 The National Assembly took note of the Rural Wales document and agreed to take account of the Partnership's work in promoting the rural economy through the development of coherent policies and programmes. 6.1.6 The difficulties confronting rural communities in Wales, such as the structural changes necessary to resuscitate the agricultural and forestry sectors, and geographical disadvantages resulting from peripherality, require a coherent package of measures to address the needs of these areas. A key purpose of this plan is to contribute towards the delivery of the fourth element of the vision summarised above, 145 by setting these measures within a co-ordinated framework of European assistance: the plan is intended to provide a coherent basis for actions taken under the Objective 1 programme in West Wales and the Valleys, the Objective 2 programme in parts of East Wales, the Objective 3 programme in the whole of East Wales, and the LEADER Plus and INTERREG initiatives, together with the EAGGF measures detailed later in this document. In addition, national and local initiatives will provide an important further impetus to rural development. 6.1.7 The specific measures available under the Rural Development Regulation provide only one element of this comprehensive plan of action for rural Wales (although, inevitably, their description contributes the vast bulk of the analysis which follows). So the direct contribution of Rural Development Regulation measures to the seven priority areas for action identified below will be limited; it will be for other national and co-financed actions to make the biggest impact here. This should be borne in mind in considering the action likely to be taken in each of the priority areas. 6.1.8 Although the resources made available under the Rural Development Regulation are relatively limited, the increased levels of European funding which are generally in prospect offer the opportunity to deliver a step change in the economy of rural Wales and contribute along with other funds to spreading prosperity, raising overall GDP and delivering sustainable development throughout rural Wales. The Assembly's programmes, supported by a range of European support, including EAGGF funding under the Rural Development Regulation, must be tailored to do so in a way which is sensitive to both the environmental and social fabric of the region. They will be aimed at developing the skills, attitudes and economic infrastructure necessary to allow the region to compete as a modern advanced economy. Strategic Overview for Rural Wales 6.1.9 The analysis of the current situation in rural Wales in Section 5.1, and in particular the summary of strengths, weaknesses, opportunities and threats, provides a crucial context for the consideration of the strategic priorities to be adopted for the next programming period. In particular the analysis identifies the opportunities which exist for securing a long-term, viable future for Welsh agriculture and indeed for the wider rural economy, together with substantial environmental and social benefits, but emphasises the threats of irreparable damage to the economic, environmental and social sustainability of the Welsh countryside which exist if those opportunities are not taken. 6.1.10 These long-term, structural issues underpinned the development of the comprehensive statement on Rural Wales referred to above. The statement set out seven priority areas for action: ! ! ! ! ! ! ! promoting business development; spreading economic prosperity; developing skills to match business needs; strengthening communities; improving access to rural services; investing in the rural infrastructure; enhancing the rural environment. 146 6.1.11 These priority areas accurately reflect the overall needs of rural Wales; the issues raised have been the subject of extensive consultation during the course of preparation of the National Economic Development Strategy, the Single Programming Document for Objective 1 and Objective 2 and the Operational Programming Document for Objective 3, together with the Rural Development Regulation measures which form the heart of this plan. As part of the National Strategy, Objective 1, 2 and 3 resources together with those of Leader Plus and the Rural Development Plan will be used to address these needs. The key points relating to each of these areas are summarised below, more specific sectoral objectives are then developed in the second part of this Section, which deals specifically with the priorities and objectives of the Rural Development Plan. Promoting business development 6.1.12 The priorities for business development will be to increase the competitiveness of existing companies, to increase the rate of formation of new firms and to ensure that all enterprises follow paths towards a sustainable future in the coming Information Age while ensuring that there is continued inward investment that is both sustainable and appropriate. 6.1.13 Increased emphasis is required on developing innovation in rural Wales. Technological change is both the most important influence on economic change in the region and its most important opportunity. In particular the use of Information and Communications Technology (ICT) can help address problems of peripherality and help firms increase internal efficiency, training and marketing efforts. The adoption of new technologies also provides important opportunities for raising productivity and the value of output. 6.1.14 Activities supported will be relevant to all sectors but will have particular importance for those industries which have traditionally provided the backbone of the economy of rural Wales, particularly agriculture, forestry and tourism. They will support efforts to provide more focused, high quality products that will assist them in becoming more viable in increasingly competitive markets. Support for agricultural change will aim to sustain farming families whilst diversifying their sources of income and encouraging entry into higher value product ranges (such as organic produce). Support will also be provided for increased food processing undertaken in the region. The key strategic priorities for agriculture and forestry, which form the basis for the measures being implemented under the Rural Development Plan, are: ! ! ! ! ! to become more sustainable economically, with the emphasis on premium, branded products with an environmentally-positive image, and much greater value-added processing of primary produce in rural Wales; to improve innovation through the adoption of new business skills and environmentally sensitive agricultural best practice; to improve market links by promoting collaboration among producers and co-operation between producers and processors; to broaden the economic base of rural Wales by assessing the potential for alternative crops, organic horticulture, energy crops, herbs and aquaculture; to help farming families to adapt, to take informed decisions on the future of family members, and to diversify sources of income; 147 6.1.15 The appeal of tourism in rural Wales is based in part on landscape and physical environment and in part on culture, heritage and built environment. The sector faces two key challenges; how to increase economic benefits without adversely affecting the environment that makes much of the region attractive to visitors in the first place; and how to adapt the nature of the tourism packages offered to fast changing patterns of demand. 6.1.16 The key priorities for the tourism sector are: ! ! ! ! ! ! ! ! marketing initiatives to raise the profile of the region's tourist potential; maximising the potential for ICT developments; support for the development of key niche markets including eco-tourism; action to attract larger numbers of overseas visitors; extension of the full range of business support services to the tourism sector; maximising the tourism potential of arts and cultural activities; improving professionalism and innovation through development of higher skills levels; provision of tourism infrastructure and tourism information facilities. 6.1.17 There is also a need to try to extend the tourism season which would help provide both economic and environmental benefits. A longer season would serve to reduce over-crowding and in tandem with more effective tourism management practices would put less pressure on the environment and improve the quality of experience for the visitor. There needs to be a concerted and co-ordinated programme of marketing Wales throughout the year to achieve this. Festivals, the arts and sporting events can all play a major role in this and an annual programme of 'calendar events' could help with the planning and promotion of events throughout the year. This could promote a wider distribution of activity throughout the year with better opportunities for developing packages, linking in events with accommodation and ticketing and transport deals. 6.1.18 In the Objective 1 Single Programming Document Priority 1 sets out objectives for business competitiveness. The five measures proposed under this priority in the document will apply throughout the programme area and their implementation will reflect the differing needs for business development in rural areas. Support for tourism infrastructure is also set out in Measure 4 under Priority 2 of the Objective 1 document aimed at developing a competitive environment. Measures 1 to 8 under Priority 5 set out a series of activities proposed to help the management of agricultural change and forestry development. 6.1.19 The Objective 2 Single Programming Document for parts of East Wales also includes relevant measures aimed at promoting business development within the programming area. Spreading economic prosperity 6.1.20 It is vital that the benefits of European and domestic programmes are better spread across the region, especially to the most deprived and peripheral areas. The economic development and continued viability of much of rural Wales will require support for diversification and modernisation of traditional industries, especially land-based ones. Steps are also needed to preserve the high quality environment in 148 much of rural Wales and promote the achievement of maximum levels of natural resource efficiency. In seeking to achieve a better spread of prosperity in rural Wales, priorities will be to achieve: ! ! ! ! ! ! ! ! the creation of more sustainable economic opportunities, particularly for the young; a broader representation of economic activities; the development of production chains, adding value to primary products; an enhanced tourism sector; a more developed Green technology sector, including renewable energy; extended use of ICT links; support for the social economy; reduced levels of rural poverty. 6.1.21 The achievement of these priorities in rural areas of West Wales and the Valleys will be aided by a range of measures in the Objective 1 SPD. In particular extended ICT links, business support, innovation and the social economy will be encouraged under the measures within Priority 1. Production chains will be supported under Measure 1 of Priority 5 and tourism will be promoted through Measure 5 of Priority 2. Under Priority 3, measure 5 sets out additional support for the social economy. Developing skills to match business needs 6.1.22 The development of a skilled, enterprising and adaptable workforce is essential to the future prosperity of rural Wales. The programme's success depends, above all, on the ability of people to develop the skills and attitudes required for them to benefit from the processes of economic change. Action is needed to develop the aspirations of individuals and raise skill levels both of those in the workforce and also of those currently excluded from the labour market. The growth of the economy of rural Wales, and particularly of those sectors that can bring sustained growth while raising environmental quality, requires a skilled and adaptable workforce. The achievement of this ambition requires a focus on four strategic actions for human resource development in the region: ! ! ! ! measures to encourage the economically inactive into employment or training; measures to enhance the skills of the working population in both generic and vocational skills; measures to equip all those completing education or training for the world of work; measures aimed at the promotion of an entrepreneurial culture. 6.1.23 Many people, particularly women, have caring responsibilities, which prevent them from getting and holding down jobs or from participating in further education or training. The rural economy will benefit from making full use of the skills of people who want to work but are prevented from doing so by inadequate care arrangements. Comprehensive action is required to break down these barriers. 6.1.24 Rural Wales has traditionally been seen as an area whose culture valued both social solidarity and securing greater access to learning. However, this did not always extend to all members of society and there are particular groups who have not been able to access the opportunities available to the majority. The programme must promote equal access to education, training and employment for all. Where necessary specific measures will be taken to tackle barriers to employment - including self-employment - 149 learning or training, based on gender, disability, ethnicity, language or culture. The programme recognises that people have an equal right to be considered as participants in all parts of the rural economy - as employers and self-employed business operators as well as key elements in the labour market. 6.1.25 There will be specific support for business skills and entrepreneurship will be promoted in the Objective 1 area through Measure 2 under Priority 1. Priority 4 aims to promote employability and the development of a learning society and includes within its aims improved access to learning opportunities, particularly in peripheral areas, through Measure 4. 6.1.26 In East Wales, the Objective 3 operational programme sets out a coherent plan of human resource development throughout East Wales, recognising the different dimensions in rural and urban areas. Strengthening communities 6.1.27 The success of the programme depends on the creation and development of vibrant, resourceful and enterprising communities. Many rural communities have suffered a range of problems as a result of economic deprivation. A key element of the programme must involve empowering communities to lead their own local development and to regenerate their areas in a sustainable manner. The traditions of selfhelp which are widely prevalent in the region must be drawn upon to drive the programme. 6.1.28 Welsh is one of the most vibrant of the European Union's minority languages; according to the 1991 census, the number of Welsh speakers was just over half a million - nearly 19% of the population. The main traditional strongholds of the language fall within rural West Wales. Given that there is a strong link between the language and the well-being of those rural communities which have traditionally been its strongholds, the decline of the language in some parts of rural Wales, as a result of a number of interrelated socio-economic factors, is a cause of concern. 6.1.29 The key priorities for community development are: ! ! ! ! ! ! to develop the capacity of community organisations to determine local needs and build effective partnerships to address local development needs; to support the expansion and development of enterprises in the social economy, building on past good practice including LEADER; to provide support for targeted initiatives that allow people unable to take advantage of mainstream services - including the long term economically inactive - to enter training or employment; to ensure that all communities have access to high-quality ICT facilities; to promote equal opportunities and develop and use the culture of many rural areas to enhance local prosperity; addressing social exclusion and poverty in rural communities. 6.1.30 Comprehensive community regeneration will be supported under Priority 3 of the Objective 1 programme in West Wales and the Valleys. In rural areas the measures will be able to build on successful models such as the LEADER groups supported under the first two LEADER Community Initiatives. The emerging LEADER Plus initiative will also provide for these and new groups to develop throughout rural Wales innovative and integrated approaches within the priority themes for this programme identified by the Commission. 150 Improving access to rural services 6.1.31 Access to local services such as the village shop, pub, community centre, GP and public transport is declining for many rural communities. In sparsely populated areas the small number of service users means that there is rarely scope for economies of scale whilst at the same time services face higher costs, particularly for transport. 6.1.32 It is important to recognise the higher costs of providing accessible rural services, as well as offering support for marginal private and voluntary sector services, so that access to services for people living in rural areas fully meets their needs. It is also important to recognise that rural services are important sources of employment and income in rural communities. 6.1.33 The providers of rural services must be encouraged to improve access by building on established good practice. There is considerable scope for expanding the co-ordination and integration of rural services to maximise both the use of resources and the quality of service delivery, together with scope for strengthening liaison and co-operation between public, private and voluntary sector providers, including the development of multi-purpose community facilities and the co-location of services. 6.1.34 Improving access to services in rural areas is a common theme under the Priorities set out in the Objective 1 Single Programming Document. These priorities include specifically the measures under Priority 2 aimed at developing a competitive environment and Measure 4 of Priority 4 with an objective to widen access to learning. Investing in rural infrastructure 6.1.35 Rural Wales suffers from very varied infrastructure provision in terms of transport and telecommunications. While some rural areas along the north and south coastal strips enjoy good road links and adequate narrow-band telecommunications infrastructure, the pattern of provision in most rural areas is far less developed, and all areas need better access to two way broadband facilities. 6.1.36 Investment in infrastructure will need to be targeted at addressing peripherality, particularly where clear economic benefits can be identified. One of the most potent methods to reduce peripherality is the continued development of ICT links, which will allow the economy of rural Wales to develop into new areas of business. 6.1.37 Measures under Priority 2 of the Objective 1 Single Programming Document aimed at developing a competitive environment will help to address the additional barriers to economic prosperity and accessibility that many peripheral rural areas face. Measures under this Priority concern transport, ICT, energy, the environment and tourism - all issues of direct relevance to rural parts of the programme area. 151 Enhancing the rural environment 6.1.38 The natural environment is one of rural Wales' major assets and has a major impact on the perceived quality of life for resident, consumer, tourist and investor. There is also a valuable wildlife resource of species and habitats, varied and attractive landscapes and a network of paths, commons and National Parks for quiet recreation and enjoyment of the countryside. Over 60% of the Welsh coastal waters are subject to European conservation designations, and the coast supports internationally important populations of seabirds. The protection and enhancement of the environment is therefore important in terms of securing long-term sustainability and supporting economic development. 6.1.39 Those working in the countryside need access to resources to allow them to promote environmentally sustainable management of land where this sustains and creates local jobs. However there are still many pressures on the natural environment; the key environmental challenges are: ! ! ! ! ! to improve the management of countryside access to protect the environment while promoting the enjoyment, awareness and interest of the public; to encourage a greater degree of integration in land use management; to reduce and manage the waste generated in the countryside and coast; to promote the sustainable use of the coast's resources for economic, environmental, and social benefit and to enhance the quality of the coastal environment and the wildlife it supports; to promote all forms of onshore and offshore renewable energy schemes together with energy conservation programmes. 6.1.40 Within the Objective 1 area, many rural areas will benefit from activities supported through Measure 2 of Priority 5: the enhancement and protection of the natural environment and countryside management. 6.1.41 There are no specific fisheries measures included in the Rural Development Plan. There are separate plans for sea fisheries and port improvements etc. under Priority 5, Measure 9 in the Objective 1 Plan and equivalent measures will be available in East Wales. These plans will also offer grants for fish farming and will provide an opportunity for rural interests to diversify into this activity. Inland fisheries could, however, benefit from other indirect measures in this plan, particularly the tourism and agri-environment measures. Separate fisheries actions will be covered by the UK Financial Instrument for Fisheries Guidance plan. 6.1.42 Community renewable energy schemes and renewable energy supplies will be supported in the Objective 1 plan under Measure 5 of Priority 2 152 Sectoral Priorities for the Rural Development Plan Agriculture 6.1.43 Within the overall framework of rural development the policy issues on agriculture require a distinct analysis. Welsh agriculture is under enormous pressure. Farm incomes have fallen dramatically since the historically high levels of the mid 1990s, despite the very heavy degree of subsidy through the Common Agricultural Policy. The level of subsidy is such that although farming accounts for broadly 2% of Welsh Gross Domestic Product (GDP), this falls to less than 0.1% after direct and indirect subsidies are deducted. The industry is becoming more exposed to world market competition, and this trend will continue as the Common Agricultural Policy evolves. 6.1.44 The analysis underpinning ‘Farming for the Future’ (a National Assembly consultation paper, at Appendix 12) made clear that the farming industry, in Wales as elsewhere, is beset by significant economic and structural problems. There is a long-run trend for total income from farming in Wales to decline, both in real terms and as a share of Gross Domestic Product (GDP). Income from farming is also volatile, reflecting both the fact that it incorporates an element of profit, and agriculture's susceptibility to changes in the exchange rate and in natural factors. The number of agricultural holdings in Wales is in long-term decline, reflecting the move towards larger-scale, more economic production. The age structure of farmers is also imbalanced, with 40% of Welsh farmers aged 60 or over in 1995. 6.1.45 The relative decline of the agricultural sector has been exacerbated in recent years by a combination of negative developments, including: ! ! ! ! ! the high value of sterling against other currencies; the export ban on British beef; increased beef imports which have depressed domestic prices; decreasing commodity prices; increasing milk collection costs. 6.1.46 Nevertheless, the agricultural sector is still important in the rural areas of Wales. Over 53,000 workers are directly employed in agriculture in Wales, and in areas such as Powys, Ceredigion, Carmarthenshire, Pembrokeshire and Gwynedd the role of agriculture in providing employment is significant. In addition, agriculture provides benefits beyond its economic value, especially in terms of its contribution towards meeting environmental and social objectives. The landscape of Wales - one of its key assets - is the product of current and past patterns of farming, and agriculture will continue to play a key role in maintaining this environment. 6.1.47 These are issues that have to be faced. Farming is a unique industry. It determines the appearance and the ecological quality of our countryside. A radical change in the pattern of farming would potentially have implications for the social fabric and the character of rural communities. 6.1.48 It is essential to be clear about what objectives can realistically be pursued. These issues were raised in the discussion paper ‘Welsh Agriculture - a Sustainable Future’, published by the Welsh Office in January 1999, and in ‘Farming for the Future’. The response to the paper showed wide support for basing 153 policy on the concept of sustainability. The National Assembly has a statutory duty to promote sustainable development. Sustainable agriculture can be defined as a system which will; "supply safe, nourishing and affordable food, produced in accordance with generally accepted environmental and social standards; maintain a profitable industry, as well as contributing to an economically and socially viable rural society; minimise pollution; conserve and enhance the landscape, wildlife, cultural and archaeological value of agricultural land; and respect a high level of animal welfare." 6.1.49 The problems that Welsh agriculture has in terms of economic sustainability are well recognised. In 1997-98, the most recent year for which figures are available, direct subsidies accounted for about 150% of Net Farm Income, and about 75% of cash income. The percentages for 1998-99 are likely to be higher. These subsidies are helping family farms to stay in business, but the indirect subsidies increase food prices to consumers, so that they are significantly above world market levels, and the subsidy system overall does little to help the industry adapt and develop for the future. The pressures of world trade negotiations will gradually force reform of the CAP so that these production subsidies are eventually phased out. 6.1.50 In terms of social sustainability the dramatic fall in farm incomes in recent years have led to fears for the future of the Welsh family farm. The normal long term trend in developed economies is for employment in agriculture to decline. The number of agricultural holdings in Wales has been falling steadily for a long time. This is particularly so in the dairy sector, where milk quotas make it difficult to increase production. The decline in agricultural employment in rural Wales has so far been more than offset by the growth of employment in services, particularly those provided by the private sector. 6.1.51 The concern, however, is that if farm incomes remain at current levels, the rate of change in the farm structure could accelerate sharply, leading to many fewer, larger, commercially-viable holdings, and an increase in the number of small, part-time holdings. The pressure on the traditional family farm is recognised to have caused real stress for farming families. A recent survey by the National Farmers Union found that 43% of hill farmers in England and Wales said their children would not be taking over the farm when they retired. The challenge is to create job opportunities to give young people a genuine economic option of staying in rural areas. A major exodus of young people from rural Wales would have implications for the social structure also the strength of the Welsh language in its traditional heartlands. 6.1.52 The problems in environmental sustainability are less widely-recognised, but none the less real. The Welsh countryside remains visually stunning. It is an ancient landscape. More than half of traditional field boundaries are thought to be medieval or older, and it is work by farmers which maintains this landscape. But the pressure to intensify has led over the last 50 years to a substantial loss in the richness and variety of our wildlife . The trend towards a sheep monoculture in the uplands, agricultural improvement of grazing land, increasing grazing pressures and the switch from hay to grass silage have all had an effect. Unimproved and semi-improved grassland now amount to less than 10% of the total areas of lowland grassland, and a large proportion of the remaining heathland is in poor condition. Between the 1920s and the 1980s, 95% of wet heaths and 50% of dry heaths on the Lleyn peninsula were lost. 154 6.1.53 Much heather moorland has been lost - for instance, the area of heather moorland on the Berwyn hills declined by 44% between 1946 and 1984. Some 10% of semi-natural grassland sites in Radnor were either wholly or partially destroyed between 1987 and 1990. A decline in mixed farming practices and particularly in cereal production and winter stubbles in the uplands has been particularly serious for birds such as the Yellowhammer and Linnet. The decline in spring barley is problematic for birds such as Lapwing and Skylark which use bare soil and young crops during the nesting period. The RSPB estimate that the number of breeding pairs of Lapwing in Wales have fallen from 14,000 in 1970 to 1,700 in 1998. Extreme changes to the farming structure, leading to livestock "ranching", would mean less labour would be applied to maintaining hedges, walls and other features, and would have potential implications for animal welfare. 6.1.54 The conclusion is clear. If Welsh agriculture continues on its current path, it will suffer a painful decline. A more positive vision, based on a number on interlocking objectives, is needed: ! agriculture must become more economically viable. Welsh agriculture cannot compete by producing basic commodities. The aim must be to link agriculture more effectively to markets, with the emphasis on premium, branded products with an environmentally positive image, and much greater value-added processing of primary produce in rural Wales. Collaboration among farmers has an important part to play in developing this approach, and this is the way for primary producers to get a better financial return. This approach will help support wider rural development, and a strong image for Welsh food can also contribute to the image of Wales in the world; Welsh agriculture and land use must become more sustainable environmentally and ecologically. Apart from helping to meet bio-diversity targets, this will strengthen Wales' attractiveness for tourism, and strengthen the basis for marketing Welsh food as a premium product. Caring for the environment is a legitimate long-term basis for farming to be supported both in terms of the taxpayer, and in terms of world trade negotiations; extreme changes in the structure of family farms must be guarded against to help safeguard the traditional character of the countryside, and to ensure that the inevitable decline in agriculture employment does not run ahead of the generation of alternative, well-paid jobs in rural areas; and farming families need to run their businesses more effectively, take sensible decisions on how to develop or diversify, and to take informed choices generally about their future. Support services need to focus more coherently on helping them to do this. ! ! ! 6.1.55 Finite funding means that questions have to be asked about relative priorities within this overall vision. While the Rural Development Regulation sets out a menu of options for Member States, it does not presume that all countries will operate them all; agri-environmental action is the only compulsory measure. The fact that it lies within the Assembly's legal powers to adopt these measures does not mean that they could all be funded. The Assembly's clear priority is to favour measures which help build a viable long-term future for the industry, rather than short-term subsidies. The following paragraphs consider the potential contribution of each of the potential actions to the future of Welsh farming, in order to inform the development of a coherent and relevant strategy for the future of farming in Wales. 155 Forestry 6.1.56 Forests and woods cover 13% of the land area of Wales and forest industries support approximately 4,500 jobs. As with other rural sectors, forestry is under economic pressure; its future is inextricably linked to world markets and with the strong pound and competition from East European producers, the difficulties it faces are likely to continue. Over the last two years timber prices have fallen by over 30%, and they are unlikely to recover in the short term. All parts of the industry are affected (from grower, contractor, haulier, sawmiller to processor). The maintenance and management of woodlands are adversely affected and this in turn will have a detrimental effect on conservation, environment and bio-diversity. 6.1.57 Forestry has a key role to play in laying the foundations for a healthier and sustainable future; these benefits are applicable to both rural and urban areas of Wales. Nevertheless, trees grow slowly and many of our woodlands still reflect the policies that were being pursued at the time they were planted. Although priorities have changed, from the need to build a strategic supply of timber, following the two World Wars, to the current and much broader needs of sustainable woodland management, much still needs to be done to restructure our woodlands and wood based industries to reflect the current and future aims and needs of society. In line with the Wales Woodland Strategy, these will include: ! ! ! ! planting a broader range of species, appropriate to local ground conditions and local needs; the development of new markets and products; assisting businesses to adapt, and adding value to timber much nearer to woodlands and local communities; managing woodlands for the benefit of recreation, tourism and the environment. Key Rural Development Plan Priorities 6.1.58 The key strategic priorities for the Rural Development Plan, as indicated in paragraph 6.1.14, and the objectives within them, are set out below together with the measure(s) that will be used to deliver them. It must be emphasised that these priorities are highly inter-linked and that, although measures have been assigned to the priority to which they will make the greatest contribution, a number of them will also have a significant impact in achieving other priorities. Priority 1 (i) To create stronger agriculture and forestry sectors to broaden the economic base of rural Wales by developing the agri-food strategy and assessing and developing the potential for alternative crops, organic horticulture, energy crops, herbs etc; (ii) to help farming families to adapt, to take informed decisions on the future of family members, and to diversify sources of income; (ii) to complement other actions aimed at broadening the rural economy in appropriate circumstances; ! ! ! Investment in Agricultural Holdings - Articles 4 to 7 Forestry - Articles 29 to 32 Promoting the Adaptation and Development of Rural Areas - Article 33 - indents 7, 10 156 Priority 2 (i) To improve the economic competitiveness of rural communities and areas to become more sustainable economically, with the emphasis on premium, branded products with an environmentally-positive image, and much greater value-added processing of primary produce in rural Wales; (ii) to improve innovation through the adoption of new business skills and environmentally sensitive agricultural best practice; (iii) to improve market links by promoting collaboration among producers and co-operation between producers and processors; ! ! Processing and Marketing of Agricultural Products - Articles 25 to 28 Training - Article 9 To maintain and protect the environment and rural heritage Priority 3 (i) to help land use in the region become more sustainable environmentally and ecologically; (ii) improving access to services, supporting community regeneration and promoting social inclusion in rural communities; ! ! ! Agri-environment - Articles 22 to 24 Less Favoured Areas & Areas with Environmental Restrictions - Articles 13 to 21 Promoting the Adaptation and Development of Rural Areas - Article 33 - indents 5, 6, 11 6.1.59 These priorities and objectives will be supported by clear policies of countryside management aimed at preserving and enhancing an appropriate environment for economic development. This will not only benefit the resource-based industries but directly encourage tourism and enhance the image of the more rural areas of the region as a business location. 6.1.60 The key measures to be implemented in order to address these priorities are summarised below: Priority 1 Investment in Agricultural Holdings 6.1.61 If farming in Wales is to adapt successfully, farmers will need to make changes to their current activities. They will need to adopt best practice in animal husbandry and welfare and move to more cost effective and environmentally-friendly production techniques as well as improving the management of their farms by gaining the skills to manage their farms as businesses. In addition, they will need to explore the options available for diversifying their activities and be prepared to work in a more co-operative manner. As well as providing assistance in these areas, the adoption of this measure will assist in providing multiple sources of income for farming households and reduce dependency on a narrow and vulnerable economic base. 157 6.1.62 The main elements will be the introduction of a Whole Farm Review Scheme, to help farmers make a objective assessment of their current business and the opportunities for improvement and diversification, linked to three grant schemes which will provide capital support to facilitate a range of activities including protecting and enhancing the natural environment, pollution control and waste management, animal welfare, stock and crop management and farm diversification. Forestry Afforestation of Agricultural Land 6.1.63 The majority of EU funding for forestry is delivered through the Forestry Commission's Woodland Grant Scheme. Afforestation (the planting of new woodlands) on agricultural land provides a number of opportunities for farmers and in addition the potential to enhance the landscape and environment. The key aims of woodland creation on agricultural land are: ! ! ! ! ! ! to increase the production of wood; to provide jobs and improve the economy of rural areas; to improve the landscape; to provide habitats for wildlife; to offer opportunities for recreation and sport; to provide a complimentary land use for agriculture. 6.1.64 The nature of woodland and forestry expansion will vary from area to area. For example, new welldesigned productive woodlands will be encouraged where appropriate on the better quality land where agriculture is the main current use. Alternatively, on semi-natural agricultural land there will be the potential to create and extend native and semi-natural woodlands. Management of woodland, afforestation on non-agricultural land, marketing and forestry products 6.1.65 The principles on afforestation equally apply here. However, this measure goes further as it also includes woodland management, on all land, funded under the Forestry Commission's Woodland Grant Scheme and also has the potential to support timber marketing and processing. 6.1.66 Sound woodland management is the mechanism through which woodland owners will be able to produce sustainable woodlands of the future, for a wide variety of goals, including: ! ! ! ! creating productive woodlands, providing good quality timber to added value markets; enriching habitats for fauna and flora; improving the landscape; offering opportunities for access, recreation and sport. 6.1.67 Woodland management links naturally with many of the objectives contained in the Tir Gofal scheme, which has been designed to work in conjunction with the Woodland Grant Scheme. Wellmanaged woodlands will assist in the achievement of UK bio-diversity targets. 158 6.1.68 New markets and businesses close to the woodlands and local communities are needed. The recently formed Welsh Timber Forum is a good example of how small and medium businesses are working together to develop and promote the use of Welsh timber. These businesses, by using the timber produced, will act as a stimulus to owners to improve the quality of their trees, by better woodland management. Key aims include: ! ! ! ! ! ! ! ! development of added value businesses near to woodlands and communities with local processing, branding and marketing; development of supply chains and mutually beneficial collaborative working; modernisation of the forest harvesting equipment base with emphasis on machinery rings and shared facilities; improving business and transferable skills including business start ups, marketing, wildlife management and countryside interpretation skills; encouraging research and development into new products and methods of 'technology transfer'; development of wood and wood residues for renewable energy; training in forest industry related skills courses including on-site and on the job training; improved networking between all parts of the industry and the raising of professional standards. Diversification of agricultural activities and activities close to agriculture to provide multiple activities or alternative incomes 6.1.69 The need for diversification of farm enterprises in order to promote a more sustainable countryside is clear. Activities such as the production of novel crops (such as those intended for pharmaceutical products); development of new non - agricultural enterprises; reuse of redundant farm buildings; provision of services such as secretarial or computing; setting up of farm shops, direct sales and pick-your-own; agritourism including bed and breakfast; farm facilities (nature trails, open farm, quad bikes etc.) and fishing; catering operations; conversion of farm buildings into holiday accommodation; buildings for let as offices, craft workshops, etc. might all be appropriate in particular circumstances and locations. They might also give rise to wider pluriactivity opportunities in the service and manufacturing industries including contracting. Encouragement for tourist and craft activities 6.1.70 Rural Wales' varied, natural and attractive landscapes have resulted in the tourism industry being an integral part of the rural economy. As tourists become more discerning and demand higher service provision, there is a need for the industry to adapt and capitalise on these changes in the market. Rural tourism has been identified as a potential growth sector for the Welsh economy - the scenic inland areas of East Wales are well placed to take advantage. Local communities will be encouraged to develop tourist and craft activities appropriate to their locality. Support will be targeted on community led projects that encourage tourist and craft activities aimed at enhancing the contribution that these activities make to the rural economy, in particular those that will provide a high value return from tourism or help to extend the tourist season in the area. 159 Priority 2 Improving the processing and marketing of agricultural products 6.1.71 The key objective of building a stable, sustainable long-term future for Welsh agriculture requires farmers to gain a greater share of the margin between farm gate and consumer. The industry Action Plans for the lamb and beef, dairy and organic sectors, published by the Agri-Food Partnership in March 1999, envisage collaboration between farmers aimed at gaining a market for premium, branded products with a positive environmental image. Although the Welsh Development Agency will lead on the implementation of the Action Plans, the farming industry itself will continue to steer the strategy, through the Welsh AgriFood Partnership. 6.1.72 The main general measures will be: ! ! ! ! ! pro-active account management by the WDA of companies that process lamb and beef, dairy and organic produce, to help them target markets and expand; grants for marketing and processing projects to support this; support for co-operative initiatives by farmers to help gain a greater stake in processing and marketing their produce. This is the best way for farmers to gain a greater share of the price that consumers pay for food; feedback to farmers on the quality standards they need to meet to satisfy market requirements, coupled with farm assurance; and development of designated centres of excellence to provide expert support for food processing companies on product development. 6.1.73 Funding for agri-food developments will be available in future through the Guidance section of EAGGF under Objective 1 and, outside the Objective 1 area, through the Guarantee section of the EAGGF, under this Rural Development Plan. The industry has made it clear that it wants to see a coherent, rather than a scatter-gun, approach; while the emphasis will be on local delivery, projects will be assessed in terms of the contribution they offer to the overall achievement of the national Agri-Food Strategy for Wales, with a strong input from the Agri-Food Partnership's industry strategy groups on the lamb and beef, dairy and organic sectors, so that action adds up to a coherent Wales Agri-Food Programme. Section 9.9 of this plan sets out how this will be achieved. 6.1.74 This action is the main way in which Welsh agriculture can be helped to become more viable. It also dovetails with work to help farming become more environmentally sustainable. Trading on a strong reputation for environmentally-friendly production, and the highest standards of animal welfare, is a key part of developing premium products, which can command premium prices. Sustainable stocking levels may improve the quality of stock and the price that a farmer receives. 6.1.75 The promotion of organic farming has a particular part to play in this context. The opportunity to obtain premium prices is obvious. To the extent that organic farming encourages a return to traditional mixed farming systems, it can also make a real contribution to environmental sustainability. Improved grant rates for converting to organic have been agreed by the European Commission, and the fact that a farm is organic will help gain entry to Tir Gofal. The Organic Agri-Food Action Plan (Appendix 27) sets out wider action, including better information, advice and training on organic farming. 160 6.1.76 Clear potential exists for a similar action planning approach - the development of supply chains and added-value processing, backed by the WDA - to be taken to the development of other sectors. These include: ! ! ! ! ! ! horticulture (particularly organic vegetables); alternative crops (fibre, protein crops, pharmaceuticals, industrial oats); biomass (e.g. short-rotation coppice); farm woodlands; aquaculture, inland and sea fisheries; speciality/fine foods. 6.1.77 The Assembly and the WDA have commissioned further work on the likely investment costs and potential economic and environmental benefits of these sectors, so that informed decisions can be taken on which represent the best value for money. It would be more sensible to develop some of these sectors effectively, taking into account the results of the work in progress, than to spread efforts too thinly by trying to develop all of them simultaneously. Where research indicates that development of particular sectors would be worthwhile, then the plan will be modified to allow for support to be targeted effectively at those sectors. Training : Helping Farming Families to Adapt 6.1.78 For most farming families in Wales, farming is first and foremost a traditional way of life. Business planning and analysis of production costs is practised by many farms, however, if farming, and farming families, are to adapt successfully, a much more business-like and enterprising approach is needed. Farming families need help to: ! ! ! develop their skills to manage and develop their business successfully, and to diversify; adopt best practice, environmentally-friendly farming techniques; and take informed decisions about their future, and the career options facing family members. 6.1.79 Examples of priorities include business and IT skills, both general skills and best farm management practice; grassland management, organic and environmentally-sensitive farming; stock selection; pollution control; and business succession planning and career options for family members. Action on these areas will make a substantial contribution to the economic, environmental and social aspects of sustainability. 6.1.80 Consultation on the agri-food Action Plans, and on ‘Farming for the Future’, indicated strong support for developing greater coherence, technology transfer, training, information and advisory services to meet these needs. This needs to be done under the umbrella of Business Connect utilising Article 9. The AgriFood Partnership has formed a Farm Development Strategy Group, to steer the way forward, working with a wide range of public and private sector partners. The Group will examine in particular: ! ! ! ! how an all-Wales network of demonstration farms can be established to disseminate best practice; how services for farmers can be networked more effectively, under Business Connect, and delivered to consistent standards; how take-up of services can be expanded, to make a reality of lifetime learning in the farming sector; and how centres of expertise can be sustained and developed to drive the agenda forward. 161 Priority 3 Agri-environment 6.1.81 Tir Gofal provides an integrated all-Wales agri-environment scheme. The scheme will become a key element in implementing the strategy of increasing the environmental and ecological sustainability of Welsh farming. Tir Gofal has the potential to make a major contribution to conserving and creating landscapes and wildlife habitats as well as contributing to social sustainability by helping family farms to adapt and survive when otherwise they would not. 6.1.82 The objectives of the scheme will be to: ! ! ! ! improve wildlife habitats on agricultural land; protect characteristic rural landscapes; protect the historic environment; provide public access to the countryside (under Article 33). 6.1.83 Tir Gofal requires the obligatory management of the whole farm, encouraging good environmental practices and, as a minimum, an acceptable standard of environmental care on every participating farm. Under Regulation 1257/1999, the provision of new public access is no longer part of the EC agrienvironment programme and the public access components of Tir Gofal will now be supported under Article 33 (see Section 9.11). However, in order to ensure integrated delivery of the agri-environment programme and the public access measures, the latter element has been retained within the Tir Gofal literature and will be delivered using Tir Gofal project officers and administrative procedures. 6.1.84 The Organic Farming Scheme, introduced in October 1999 to replace the existing Organic Aid Scheme, complements Tir Gofal by providing support for farmers during the process of conversion to organic methods of production. Compensatory Allowances For Farming In the Less Favoured Areas 6.1.85 Compensation for the difficulties of farming in the hills has been paid in one form or another since the late 1940s. Under the Agenda 2000 agreement, Hill Livestock Compensatory Allowances (HLCAs), which are currently paid on a headage basis, are to be reformed into area-based payments. The main benefit attributed to the existing system of headage payments, particularly by the evaluation of HLCAs published by the Welsh Institute of Rural Studies in 1998, is that by slowing the trend towards fewer and larger farms, they have contributed to the social sustainability of the Welsh uplands. The system has, however, contributed towards environmental problems in some upland areas, and a re-orientation towards area-based payments could bring clear agri-environmental benefits. 6.1.86 Agri-environmental schemes can however be targeted more effectively on environmental objectives, whereas HLCAs have been implicated in adding to the pressures on the environment. The move to areabased payments should help counter this, and the proposals which have been developed are intended to secure environmental benefits from the reformed scheme. The contribution of compensatory allowances will continue, however, to be primarily social rather than environmental. 162 6.1.87 The Welsh Office and subsequently the National Assembly issued consultation papers on this in April and November 1999, and in the light of responses to those documents has evolved the proposals included in this plan. Basic services for the rural economy and population 6.1.88 A lack of basic service provision limits the scope for the rural economy to develop fully. Many communities in rural Wales have limited access to the broad span of services which their counterparts in urban areas might take for granted. Improved service provision is seen as a prerequisite for encouraging the most economically able to work, invest or set up businesses in rural Wales. Poor service provision is also a significant contributor to social isolation in many villages. Support will be provided to community partnerships for the cost effective enhancement of basic services for the rural economy and population in East Wales. The measure will support community led projects that widen access to mainstream services for the rural economy and population or marginalised communities. Renovation and development of villages and protection and conservation of the rural heritage 6.1.89 Both the built environment of rural Wales and the area's natural resources have the potential to provide a significant contribution to the area's prosperity. There is a need to conserve the best of the natural and built heritage whilst ensuring that appropriate new development can take place. Many rural settlements which have struggled to adapt to changing economic patterns are often faced with a parallel decline in their physical fabric. Such decline can become self-reinforcing as dereliction blights adjacent properties. A run-down environment discourages both local customers and tourist visitors and can be one of the factors discouraging those parts of the rural population most likely to add greatest value to the local economy from seeking their livelihoods in rural communities. It is proposed that support should be provided to community partnerships for the renovation and development of villages and protection and conservation of the rural heritage in East Wales. Protection of the environment in connection with agriculture, forestry and landscape conservation as well as with the improvement of animal welfare. 6.1.90 The Tir Gofal scheme and the other environmental measures described in Section 9.8 provide the main mechanism through which the environmental objectives of the plan will be addressed. Nevertheless, it is possible that opportunities for environmental enhancement and improvements to animal welfare will be identified which can, if resources are sufficient, be funded under this measure. Such opportunities might relate to the development of rural pursuits linked to the environment such as riparian habitat management and especially locally important aspects which add value and which are not included in the other areas of this plan. The provision of paid public access, which was previously administered under agri-environment schemes, will also be provided for under this measure. 163 Future development of the strategy 6.1.91 The Assembly will closely monitor progress towards the achievement of the strategy's key objectives and will keep the strategy itself under review, bringing forward proposals for amendment should these prove to be necessary. The studies into the viability of alternative sectors (see paragraph 6.1.77) and the development of the Wales Woodland Strategy, and other studies to be undertaken as the need arises, will assist this monitoring process. It is the intention of the Forestry Commission to review the Grant for Sustainable Forestry Operations and the Woodland Improvement Grant. Any changes to these measures arising from the review would be subject to Commission approval through a modification to the Plan. There will also be a need for continuing consideration of the strategic need for measures relating to support for young entrants to the farming industry and for early retirement. The present position in respect of these measures is summarised below. Support for Young Entrants 6.1.92 Regulation 1257/1999 allows a one-off grant of up to 25,000 Euros to be paid to a young entrant (aged under 40), or an interest-free loan to be offered up to the same amount. This could only be seen as a small contribution to the cost of purchasing a farm, equipment and quota. The fundamental way to make it easier for young people to enter farming is by reform of the CAP, to lower land prices and abolish quota systems; but this is a long-term solution. The National Assembly has commissioned a study to identify the advantages and disadvantages of a young entrants scheme; the allocation of resources to these measures will be considered in the light of the outcome of the study but it is not proposed to seek EU co-financing should this option be pursued. Early Retirement 6.1.93 Regulation 1257/1999 allows payment of up to 15,000 Euros per year for ten years to be paid to a farmer between the ages of 55 and 65 to help them retire. Previous requirements that land occupied by the retiring farmer must be amalgamated with other holdings, or taken out of agricultural production, no longer apply. The main requirements now are that the farmer must stop all commercial farming, and that the successor must demonstrate that the viability of the holding has been increased. 6.1.94 The National Assembly has considered whether to adopt such a scheme in Wales. In doing so it has noted that, in 1995, some 40% of Welsh farm operators were aged over 60. Some who wish to retire cannot afford to, because they have not made suitable provision. The case argued for an early retirement scheme is that it would enable such farmers to retire with dignity, and it might create room for younger, more innovative farmers to take their place. In this way, an early retirement scheme might contribute to both the economic and social dimensions of sustainability. 6.1.95 On the other hand, no other sector of business receives support for early retirement. In addition, it would be hard to avoid paying the money to farmers who were going to retire shortly anyway. The cost would also be significant: approximately £10m per year for ten years for every 1,000 farmers who took part. There are currently some 13,690 farmers in Wales between the ages of 55 and 65, and take-up could be significant. In the light of these factors the Assembly has concluded that it would not be appropriate to devote resources to this measure. 164 Summary of Priorities and Measures 6.1.96 Taking account of all the above factors, this plan has been developed on the basis of the following priorities for the use of EAGGF Guarantee funding under the Rural Development Regulation: (a) throughout Wales: ! ! ! the afforestation of agricultural land. agri-environment schemes (Tir Gofal and the Organic Farming Scheme) compensatory allowances for farming in Less Favoured Areas (b) in East Wales, in addition to the all Wales measures: ! ! ! ! ! investment in agricultural holdings support for forestry and forestry products the adaptation and development of rural areas improving the processing and marketing of agriculture products training Complementarity with other European Programmes 6.1.97 The adopted measures will complement equivalent programmes of action outlined in the Objective 1 (Priority 5) and Objective 2 (Priority 2) Single Programming Documents. Projects emanating from rural communities and rural market towns will be eligible for support except where equivalent measures are provided in the Objective 2 Single Programming Document, in which case only non Objective 2 and transitional areas will be eligible. 6.1.98 Under the overall strategy for rural Wales, the adopted measures will also be supported by Objectives 1, 2 and 3 and the LEADER Plus Community Initiative. For this reason a relatively small percentage of the funds available under the Rural Development Plan have been allocated for Article 33 activities. The following paragraphs summarise how the measures will be supported: Objective 1 6.1.99 The most peripheral parts of rural Wales contain some of the most severe economically deprived communities and are within the Objective 1 Programme area covering West Wales and the Valleys. The Objective 1 Single Programming Document (SPD) focuses on 6 main areas for action. (i) (ii) (iii) (iv) (v) (vi) Expanding and developing the SME base Developing innovation and the knowledge-based economy Community Economic Regeneration Promoting employability, social inclusion and the development of a learning society Rural Development and the sustainable use of natural resources Strategic infrastructure development. 165 6.1.100 Each of the priorities has a relevance to, and will impact on, rural areas in Wales. They will be delivered through a range of regional or local partnerships responsible for developing action plans to deliver the Programme. Mainstream business support and training initiatives will be delivered in ways which are sensitive to the needs of rural areas and to the additional cost of delivering services in sparsely populated areas. Measures to support community economic development in rural areas will be developed in a common framework whilst community regeneration of the more deprived rural areas will draw on support under Priority 3. Rural areas will also have a significant opportunity to benefit from investments in infrastructure and new technologies. Rural development and the sustainable use of natural resources (Priority 5) specifically focuses on addressing those issues unique to rural areas which are not dealt with elsewhere and ensures complementarity and read-across with Article 33 measures in the Rural Development Plan. The cross-cutting issue of equal opportunities will inform all activities, aiming to enhance the role of women in rural development and increase the participation of people with disabilities and those from ethnic minorities where they are members of rural communities. Objective 2 6.1.101 In accordance with Article 43(1) of Regulation 1257/1999, the indicative amount of EAGGF Guarantee Funding, envisaged for expenditure under Article 33 in the Objective 2 and transitional areas of East Wales covered by the Plan, is 6 million Euro for the period 2000 to 2006. This represents 75 per cent of the 8 million Euro allocated to support Article 33 measures during this period. 6.1.102 The Objective 2 and Transitional Programme in East Wales will provide, over the lifetime of the programme, 78 million Euro in European support for the new Objective 2 areas which include most of Powys (excluding the south-east corner) alongside largely urban areas in Newport and Cardiff. The rural areas should attract 40% of this support. In addition there will be 33 million Euro support for "transitional" areas covered by the previous Objective 5b and Objective 2 programmes but not included in the new Objective 2 programme. About 30% of this support will go to rural areas. Support will be drawn solely from the ERDF. 6.1.103 The draft SPD sets out three main priorities for action alongside a Technical Assistance priority. These are: (i) (ii) (iii) (iv) Developing sustainable & competitive SMEs. Sustainable rural development Urban Community Regeneration Technical assistance 6.1.104 Priority 1 will develop the SME base throughout urban and rural parts of the Objective 2 areas and transitional areas of East Wales. Priority 2 will be targeted on rural East Wales and provide support for the following measures: ! ! ! ! Rural economic development Building sustainable communities Development of community enterprise and the social economy Improving rural communities and accessibility 166 6.1.105 Much of this Priority supports complementary activity in this Plan. The Objective 2 SPD provides support for diversification measures not directly linked to agriculture and forestry. This includes both non-related on-farm activities and activities that are related to primary products but carried out "beyond the farm gate" by any eligible actor. Support will also be provided for a broad range of rural community development activities complementary to and going beyond those supported under Article 33 of the Rural Development Regulation. 6.1.106 Priority 2 will provide ERDF support for activities eligible under indent 6 (development of rural villages), indent 7 (diversification of agricultural holdings) and indent 9 (development of agriculturerelated infrastructure) of Article 33. These activities will be supported under the following measures. Support for the development of rural villages (indent 6) will be provided under Measure 2: Building sustainable communities. Diversification of agricultural holdings (indent 7) and the development of agriculture-related infrastructure (indent 9) will be provided for under Measure 1: Rural Economic Development. Objective 3 6.1.107 The Objective 3 Operational Programme for the whole of the East Wales region has been developed in close consultation with the partnership in East Wales and provides a strategic framework to support measures to combat and prevent unemployment, develop human resources and promote social integration and equality in the regions labour market. The programme will receive an allocation of some £80m from the European Social Fund. There are five priorities: (i) (ii) (iii) (iv) (v) Development of active labour market policies to prevent and combat unemployment Equal opportunities for all and promoting social inclusion Lifelong learning Promoting business competitiveness Promoting gender equality within the labour market 6.1.108 Whilst a Great Britain-wide monitoring committee will oversee strategy, policy, monitoring and evaluation of a Community Support Framework, an East Wales Monitoring Committee will be established, in accordance with partnership principles, to oversee the implementation of the regions Operational Programme. A degree of common membership between the Objective 2 and Objective 3 Monitoring Committees is envisaged. LEADER Plus 6.1.109 LEADER Plus is one of the four "Community Initiatives" which are part of the Structural Funds Programme. It will complement mainstream programmes by promoting integrated schemes conceived and implemented by active partnerships operating at the local level. It will fit within the strategic framework established by the Rural Development Plan, and complement activities funded under Objectives 1, 2 and 3. However, the focus of LEADER Plus is on innovation, with the opportunity to encourage the emergence and testing of new approaches to integrated and sustainable development. 167 6.1.110 It seeks to encourage the implementation of integrated, high-quality, original strategies for sustainable development designed to encourage experimenting with new ways of: ! ! ! enhancing the natural and cultural heritage; reinforcing the economic environment, in order to contribute to job creation; improving the organisational abilities of their community. Operational objectives and impacts 6.1.111 The objectives of the plan are: ! ! ! to create stronger agricultural and forestry sectors; to improve the economic competitiveness of rural communities and areas; to maintain and protect the environment and rural heritage. The global impacts of plan implementation are considered in Section 7, while proposals for more specific performance indicators against which the achievement of specific targets and measure-level objectives can be considered are included in the detailed descriptions of the priority measures, and the actions proposed to be taken to implement them, in Section 9. The arrangements for monitoring progress in implementing the plan are outlined in Section 12, although these arrangements will be subject to review by the Monitoring Committee, once this has been established. An Integrated Approach 6.1.112 The strategy outlined above, and the priorities selected, represent a coherent response to the problems which have been identified in the SWOT at page 118. The strategy seeks to create an environment within which rural businesses are encouraged to become more market orientated and to adopt the latest technologies to improve their viability and competitiveness. The process of implementation recognises the synergy to be obtained from the adoption of a coherent approach to the measures under the Plan, Objective 1, Objective 2 and LEADER Plus to ensure that the maximum benefit is derived by rural communities. 6.1.113 The prospect of these additional benefits is real, and is explored further in Section 7, which seeks to identify the global impacts which might be expected from the implementation of the plan. Equal opportunities for men and women 6.1.114 The integrated approach to the delivery of the policy objectives of the plan extends also to the key cross-cutting objective of integration between women and men. The measures part-financed by the Rural Development Regulation should comply with, and where appropriate contribute to, Community policy and legislation on equal opportunities for men and women. In particular, the opportunity should be taken to consider the possibilities for investments and training which facilitate the return to the labour market of people with children. 6.1.115 Equal opportunities has been identified as a key horizontal theme for European structural funding for the period 2000-2006. This is the direct result of the 1997 Amsterdam Treaty (Article 141), which expanded the scope of EU Equal Opportunities policy, implementing a new employment strategy in which 168 equality is a fundamental component, and extending the principles to include measures to combat discrimination based on racial or ethnic origin, religion or belief, disability, age or sexual orientation. Thus the concept set out in Article 119 of the Treaty of Rome, which called for "equal treatment of men and women in matters of employment and occupation, including the principle of equal pay for equal work or work of equal value" has now been extended to other excluded sectors of the community. The National Assembly has itself emphasised the need to consider gender, race and disability issues as priorities in the development of inclusive practice. 6.1.116 A key feature of the structural shifts occurring in the area is the rising importance of women in the labour market - the 'feminisation' of the labour market . Indeed, women are rapidly becoming predominant; in some parts of rural Wales, females already make up well over half the number of employees. Although women have lower economic activity rates than men (68% against 79% for men in Wales) this is countered to some extent by lower unemployment counts (3% against 8% for men). Despite this feminisation, old attitudes to female work remain, with men still tending to be perceived as chief family 'breadwinners' and women as 'topping up' the family income. 6.1.117 Opportunities in the labour market are still shaped by gender. In particular: ! Women and men tend to work in different industries. Women are 'over-represented' in service sector industries (Public Administration, Education and Health, Distribution, Hotels and Restaurants and Banking, Finance and Insurance). Women and men tend to work at different levels within the same industries. In Wales, women constitute 78% of employees in clerical and secretarial occupations, 71% of those in personal and protective services and 65% of those in sales. Men meanwhile make up 81% of plant and machine operatives, 67% of managers and administrators and 57% of employees with professional occupations. Women are more likely than men to work part-time. Part-time working is most common in those sectors in which women are over-represented. Almost half those women in employment in Wales work part-time compared with one in twelve men. Part-time workers generally have less access to training and promotion opportunities. ! ! 6.1.118 Gender segregation is more marked in the regional labour market than in the UK as a whole, with women being concentrated in a narrow band of occupational sectors and in mainly low-paid, low-status work. In addition, Wales has low levels of childcare provision, with rural Wales being particularly disadvantaged in this respect. 6.1.119 Key obstacles to equal labour market participation by women in rural Wales include: ! ! ! Low wages and poverty which restrict access to transport, childcare, education and training, and start up funds; Lack of provision of support services (Britain as a whole has the lowest level of childcare provision in the European Union with the exception of Portugal); Sex role stereotyping which restricts choices made by young people in their subjects at school and influences employers in allocating jobs and investing in employees' training, and restricts the extent to which women can persuade enterprise agencies to invest in their businesses and the extent to which women in business are taken seriously. 169 6.1.120 The National Assembly will, in implementing the Rural Development plan and the other cofinanced structural funds programmes, seek to widen access to childcare in all parts of the labour market to help women secure equal access to all areas of workplace and college based training. Advice and guidance will be available to address specific problems women or men face in accessing particular jobs and active labour market measures will address the specific needs of women seeking to return to or enter the labour market, especially lone parents. Specific support mechanisms will be provided for women seeking to start or grow their own businesses. 6.1.121 As with activity under Objectives 1, 2 and 3 and LEADER Plus, the effectiveness of the actions undertaken under the Rural Development Regulation will be measured against: ! ! ! ! improved access for all to training, education and employment opportunities reduced job segregation reduced pay differentials in equivalent jobs between men and women increased levels of accessibility, affordability and range of provision of childcare facilities in the community and at the workplace. Disability 6.1.122 A higher proportion of the population in Wales has a physical, sensory or mental impairment than other parts of the UK. Analysis of the limited data available suggests that economic activity among disabled people is lower than the national average. This reflects the poor development of accessible education and vocational training opportunities in Wales, the location of businesses in inaccessible premises, employer attitudes and employment practices. 6.1.123 According to research by Disability Wales, at least 400,000 disabled people live in Wales, 1 in 6 of the population. Data problems mean it is difficult to generalise about their position in the labour market. However, wider UK research suggests that disabled people in employment are more likely to work in manual and lower skilled occupations; and the average take home pay of disabled employees tends to be lower than that of non-disabled employees (£196 per week compared to £212). 6.1.124 There are significant barriers to participation in the labour market for disabled people. Environmental barriers include access to buildings, and to affordable transport. Attitudinal barriers include stereotypical views of the 'body normal' employee which persist despite the loss of manual occupations. 6.1.125 As with activity under Objectives 1, 2 and 3 and Leader Plus, the effectiveness of actions undertaken under the Rural Development Plan will be measured against: ! ! ! Increased choice of accessible educational and vocational qualification training for disabled people; Numbers of disabled people and people from ethnic minorities seeking employment advice; Numbers of disabled people and people from ethnic minorities applying for training and employment opportunities; 170 ! ! Numbers of women, disabled people and people from ethnic minorities in professional jobs; Diversity of occupations occupied by both ethnic minorities and disabled people. Ethnic minorities 6.1.126 It is also important to recognise other forms of discrimination, and to provide opportunities for other sections of society, including ethnic groups. In 1999 the Labour Force Survey estimated that nearly 2% of the Welsh population belonged to an ethnic minority compared to around 6.5% for the UK as a whole. 6.1.127 Within the generic term 'ethnic minority' there is considerable diversity. Groupings have different migration histories, skills levels, cultural orientations to the labour market, and experiences of discrimination, all of which affect their prospects in the labour market. 6.1.128 Data disaggregated for ethnicity is partial and out of date. It is nevertheless possible to identify some generic barriers to labour market participation: ! Lack of basic literacy and numeracy skills (especially among non-English speaking ethnic minorities the needs of first generation immigrants are different from those of second and third generation); Little or no appropriate work experience, or up-to-date and appropriate vocational/academic qualifications; Lack of information, guidance and counselling regarding realisable training and opportunities for employment/self-employment; Lack of affordable and religion/cultural sensitive childcare facilities. Lack of registered childminders from minority communities; Workplace discrimination (stereotyping on the basis of dress and accent). ! ! ! ! 6.1.129 Employment rates in Wales amongst ethnic minorities are considerably less than for the white population of working age and less than with that for ethnic minority groups in the UK as a whole. The economic activity rate for ethnic minorities in Wales is 71% compared to an overall economic activity rate for Wales of 74%. Furthermore, 48% of persons in Wales classified as non-white are in full-time employment and 53% of white. There are 13,000 economically active ethnic minority women in Wales, with an economic activity rate of 60% compared with 68% amongst white women. 6.1.130 For the black population, low employment rates primarily reflect high unemployment rates whilst amongst people in the Asian community of working age, they reflect above average inactivity rates. 171 Environmental Obligations and Sustainable Development Compliance with international, Community and national obligations 6.1.131 The international, Community and national obligations which will be taken into account in planning the use of environmental measures under Regulation 1257/1999 include : International obligations ! the Convention on Biological Diversity (June 1992, Rio de Janeiro) which is being taken forward through the preparation of the national Biodiversity Action Plan process and preparation of individual Species and Habitat Action plans - which help inform implementation of agri-environment measures; the Convention on Wetlands of International Importance for migratory and nesting water fowl (Ramsar 1971 which in practice is now linked to the implementation of the EU Birds Directive - see below); UNESCO Convention concerning the Protection of the World Cultural and Natural Heritage 1972; requires us to identify and protect sites which meet the UNESCO World Heritage Committee's criteria for outstanding universal value. UNESCO now requires that Management Plans should be in place for each site, to ensure a proper and co-ordinated approach to their presentation and protection: these plans should address visitor management issues. Convention for the protection of the marine environment of the north-east Atlantic (OSPAR); the Plan, together with national control measures, contributes to the UK's aim to reduce nutrient inputs to the marine environment. UNECE Gothenburg Protocol commits Parties to meet emission ceiling targets for four polluting gases (sulphur dioxide, oxides of nitrogen, volatile organic compounds and ammonia) that cause acidification, eutrophication and ozone formulation. Agriculture will be required to contribute to reductions in ammonia emissions. The Kyoto Protocol (1998) commitments on climate change under which the EU has agreed to legally binding reductions in emissions of greenhouse gasses of 8% of 1990 levels by 2008 - 2012. The Ministerial Conferences on the Protection of Forests in Europe highlighted the multi-functional role of forestry and the importance of sustainable forest management. The Government's commitment to sustainable forest management is demonstrated through the adoption of the UK Forestry Standard. The Birds and Habitats Directives (79/409/EEC) (92/43/EEC), linked to the RAMSAR and Bern Conventions and contributing to NATURA 2000. Section 5 describes progress in designating NATURA 2000 sites and the extent to which agri-environment measures currently contribute to safeguarding those sites. The Nitrates directive (91/676/EEC); a suite of Action Programme measures have been implemented in areas designated as Nitrate Vulnerable Zones with the specific aim of protecting water sources by reducing nitrate pollution from agriculture, whilst agri-environment on fertiliser inputs; ! ! ! ! ! ! Community obligations ! ! 172 ! The National Emission Ceilings Directive (NECD) sets targets for the same pollutants as the Gothenburg Protocol but only for the EU member states. The ammonia target for the UK is the same as in the Gothenburg Protocol; The IPPC Directive (96/61/EC) requires businesses in the EU carrying out a specific range of activities which have an environmental impact to operate under a system of government permits. The permits will oblige them to follow best available techniques to stop or reduce their emissions of certain named pollutants, including noise. For agriculture the Directive affects large pig and poultry installations; The EU Forestry Strategy sets out how EU actions on forestry can usefully support Member States' efforts to deliver sustainable forest management. In line with that principle, the forestry elements of the Plan complement the UK Government's wider forestry activities. ! ! 6.1.132 Section 9.2 also provides a description of the minimum environmental standards which operate in Wales and the associated legislation, compliance with which is a component of Good Agricultural Practice (Section 9.1). Sustainability 6.1.133 Large parts of the economy of rural Wales are based on the utilisation of natural resources. The long term economic viability of industries, communities and environments which utilise natural resources is based on that use becoming economically and ecologically sustainable. 6.1.134 Achieving sustainable use of natural resources will mean: ! ! increasing the level of GDP, earnings levels and employment opportunities in resource based industries; improved resource efficiency and energy use within local communities including support for small scale community renewable energy schemes, energy conservation, energy crops (including use of forestry residues); conserving high quality farmland, forestry and freshwater habitats, supporting and enhancing the associated bio-diversity and supporting the quantity and quality of natural habitats; providing enhanced opportunities for people to gain access to, interpret and understand the countryside as a living environment. ! ! 6.1.135 The natural environment is one of the area's major assets and has a major impact on the perceived quality of life for native, consumer, tourist and investor. Therefore protection and enhancement of the environment are important in terms of securing long-term sustainability and supporting economic development. As Section 5.1 has shown, rural Wales has a valuable wildlife resource of species and habitats, varied and attractive landscapes and a network of paths, commons and National Parks for quiet recreation and enjoyment of the countryside. 6.1.136 It is important to ensure that those working in the countryside have access to resources to allow them to promote environmentally sustainable management of land where this sustains and creates local jobs. However there are still many pressures on the natural environment affecting the quality of air, water and bio-diversity in the countryside and coast. Reversing these pressures in ways which contribute to the economy of the area is a key challenge. 173 6.1.137 As with activity under Objectives 1, 2 and 3 and LEADER Plus the effectiveness of actions undertaken under the Rural Development Plan will be measured against: ! improved management of countryside access to protect the environment and promote the enjoyment, awareness and interest of the public; encouragement of a greater degree of integration in land use management; development of appropriate recreational opportunities and facilities for the benefit of all; reduction and improved management of sustainable waste generated in the countryside and coast; promotion of the sustainable use of the coast's resources for economic, environmental, and social benefit and to enhance the quality of the coastal environment and the wildlife it supports. ! ! ! ! Environmental Cross Compliance 6.1.138 The Agenda 2000 CAP reform requires Member States to take the measures they consider appropriate to safeguard the environment, whether through agri-environmental schemes, general environmental legislation or environmental requirements as a condition for the payment of subsidy (cross compliance). 6.1.139 In the United Kingdom, measures are already in place under each of these headings. The question is whether further environmental conditions should be attached to subsidy payments. The arguments in favour of tighter conditions have to be balanced by an assessment of how practical they would be to administer and how they might affect the competitive position of farming. Current controls on overgrazing are already problematical to administer; reform of the Sheep Annual Premium onto a historically-based system of area payments is fundamentally what would enable farmers to take balanced decisions about stocking levels. The general response to consultation, which, although not a statement of the Assembly's position, has been taken into account in preparing this plan, was that no further environmental conditions should apply to subsidy payments given the comprehensive measures already in place, the limited additional environmental benefits which these conditions would deliver and the additional costs which they would impose. The issue of environmental controls, including those relating to over-grazing, will be covered in the Code of Good Agricultural Practice. 174 6.2 DESCRIPTION AND EFFECTS OF OTHER MEASURES 6.2.1 The strategy described in Section 6.1 necessarily explains the overall approach to rural development measures in rural Wales, given the limited co-financing made available under the Rural Development Regulation, the existence of complementary measures in other European programmes and the integrated approach that is being taken towards tackling the problems of the area. In addition, the codes of good agricultural practice are referred to elsewhere in this plan, as are the state aided measures which are necessary. There are, therefore, no further measures to be covered in this Section of the plan. 175 6.3 AREAS COVERED BY SPECIFIC TERRITORIAL MEASURES 6.3.1 Action to be taken under the measures available under the Rural Development Regulation will in principle be available throughout the plan area with the exception of: ! ! ! support for less-favoured areas (see paragraph 6.3.2 below); improving the processing and marketing of agricultural products (see paragraph 6.3.4 below); promoting the adaptation and development of rural areas (see paragraph 6.3.5 below). 6.3.2 The less-favoured areas in Wales are indicated on Map 1 in Section 5.1. There are no proposals to amend the Less Favoured Area designations in Wales. 6.3.3 The areas subject to an environmental restriction are described in Section 5.1 and comprise: ! three National Parks (Snowdonia, Pembrokeshire Coast and Brecon Beacons) together with five areas of Outstanding Natural Beauty (the Clwydian Range, Gower, Llyn, the Wye Valley and Anglesey/Ynys Môn) (indicated on Map 4); 62 National Nature Reserves, the Skomer Marine Nature Reserve, and more than 900 Sites of Special Scientific Interest (indicated on Map 5); six Environmentally Sensitive Areas (Cambrian Mountains, Clwydian Range, Llyn Peninsula, Preseli, Radnor and Anglesey/Ynys Môn) (indicated on Map 6). ! ! There are no further areas subject to environmental restriction. 6.3.4 Support for the processing and marketing of agricultural products will be targeted on those areas outside the Objective 1 area (since an equivalent scheme will be supported from Objective 1 resources). The Objective 1 area is defined in Section 3(2) and indicated on Map 10. 6.3.5 Support for the promotion and adaptation of rural areas will be targeted on areas outside the Objective 1 area. Projects emanating from rural communities and rural market towns will be eligible for support except where equivalent measures are provided for in the Objective 2 Single Programming Document, in which case only non Objective 2 areas will be eligible. The Objective 1 and proposed Objective 2 areas are defined in Section 3(2) and indicated on Map 10. 176 6.4 TIME-SCHEME AND UPTAKE 6.4.1 The following measures will be implemented for the whole of the period covered by the Plan : I. Investment in Agricultural Holdings II. Training III. Agri-environment IV. Improving Processing and Marketing of Agricultural Products V. Forestry VI. Promoting the Adaptation and Development of Rural Areas - the following indents only: ! ! Basic services for the rural economy and population (indent 5) Renovation and development of villages and protection and conservation of the rural heritage (indent 6) Diversification of agricultural activities and activities close to agriculture to provide multiple activities or alternative incomes (indent 7) Encouragement for tourist and craft activities (indent 10) Protection of the environment in connection with agriculture, forestry and landscape conservation as well as with the improvement of animal welfare (indent 11). ! ! ! 6.4.2 So far as support for less favoured areas and areas with environmental restrictions is concerned, the Assembly has chosen to continue the Hill Farming Compensatory Allowances scheme for the year 2000 (using the provision of Regulation 2603/1999), but will be implementing the new Tir Mynydd scheme, which complies with the provisions of Regulation 1257/1999, from 2001 to 2006. 6.4.3 The expected uptake for each measure is indicated in Section 7 of this Plan, and the associated financial provisions are given in the indicative financial table in Section 8. 177 178 7 APPRAISAL SHOWING THE EXPECTED ECONOMIC, ENVIRONMENTAL AND SOCIAL IMPACTS 7.1 This section of the Plan considers the overall economic, environmental and social impacts which the implementation of the strategy described in Section 6.1 might have. In particular it indicates the headline impact targets against which progress towards achieving the Plan's targets will be measured. More detailed consideration of the impacts of individual measures, including performance indicators and targets which might be used to capture those impacts, is included in the individual descriptions in Section 9 of the measures which it has been decided should be implemented. In addition, indicative targets and other quantified data in the format required by Commission working paper VI/12006/00 are provided at Appendix 22. 7.2 Council Regulation 1257/1999 brings together nine previous Regulations in a coherent package which offers enhanced possibilities for a cohesive and integrated approach to rural development. While each of the measures provides the scope to make a significant impact in a specific, and sometimes quite narrow, policy area the combination of measures allows for: ! ! ! opportunities to create additional sources of income and employment; measures which will safeguard and enhance the environment; improvements to basic services and infrastructure, making Wales a more attractive place to live and work. The way in which the Plan's targets can be more readily achieved through the synchronisation of action under the selected measures, exploiting the inherent synergy between them, is explored later in this section. Objectives and Impacts 7.3. The key objectives around which the strategy underpinning the Plan is focused are, as explained in Section 6.1, as follows: Priority 1: To create stronger agriculture and forestry sectors (i) (ii) (iii) to broaden the economic base of rural Wales by assessing and developing the potential for alternative crops, organic horticulture, energy crops, herbs etc; to help farming families to adapt, to take informed decisions on the future of family members, and to diversify sources of income; to complement other actions aimed at broadening the rural economy in appropriate circumstances; 179 Priority 2: To improve the economic competitiveness of rural communities and areas (i) to become more sustainable economically, with the emphasis on premium, branded products with an environmentally-positive image, and much greater value-added processing of primary produce in rural Wales; to improve innovation through the adoption of new business skills and environmentally sensitive agricultural best practice; to improve market links by promoting collaboration among producers and co-operation between producers and processors; (ii) (iii) Priority 3: To maintain and protect the environment and rural heritage (i) (ii) to help land use in the region become more sustainable environmentally and ecologically; improving access to services, supporting community regeneration and promoting social inclusion in rural communities. 7.4. The overall impact indicators against which progress by the end of the plan period towards meeting these objectives will be measured are: Priority 1: To create stronger agriculture and forestry sectors ! the value added per person employed in agriculture to grow at least as fast as productivity in the economy as a whole; the extent of diversification into agriculturally-related activities to increase substantially, with income from diversified activities to increase by 50%; the area of woodlands brought into active management on farms to increase by 10%. ! ! Priority 2: To improve the economic competitiveness of rural communities and areas ! ! the number of jobs in the dairy and lamb & beef processing industries to increase by at least 5%; integrated training and advisory services, including a network of demonstration farms, to have been established and to have made a measurable impact on the level of business and IT skills and innovation. Priority 3: To maintain and protect the environment and rural heritage ! ! 20% of agricultural holdings in Wales to have entered the Tir Gofal and Organic Farming schemes; the area of agricultural land covered by an agri-environmental agreement under Tir Gofal and the Organic Farming Scheme to reach 300,000 hectares; the social sustainability of rural areas to be strengthened with the assistance of the Tir Mynydd scheme and activities relating to provision of basic services and village renovation and development. ! 180 Synergy 7.5 The potential for synergy and for enhancing the contribution of actions under the plan by carefully synchronising their implementation is well illustrated in terms of the impact of the agri-environmental measures and their combination with other measures in a way which offers economic and social benefits in addition to environmental sustainability. The Tir Gofal scheme, which itself integrates a number of former agri-environmental schemes and thereby provides a more comprehensive and more comprehensible approach to whole-farm environmental action, offers clear environmental gains in terms of habitats, flora and fauna and will have the effect of conserving historic landscapes and enhancing the visual impact of the Welsh countryside. 7.6 But Tir Gofal will also have much wider impacts, derived from but separate to the achievement of its core objectives (see Section 9.8). Although the payments are related to the provision of environmental goods and services they will have the effect of safeguarding the viability of some holdings, and slowing the decline in the number of farm holdings in Wales. 7.7 There are also clear linkages between Tir Gofal and some of the other measures which it is proposed to implement in rural Wales. The link between Tir Gofal and the Woodland Grant Scheme administered by the Forestry Commission is particularly important, since the management of woodlands forms part of the whole-farm approach which lies at the heart of Tir Gofal: the expansion of the agri-environment scheme will have clear implications for the associated forestry measure. 7.8 The same approach, recognising the interplay between objectives, needs to be taken with support for farming in the Less Favoured Areas. The proposed scheme described in Section 9.7 builds on the previous arrangements for Hill Livestock Compensatory Allowances but now includes an element relating to the achievement of environmental goals in a way which is complementary to the action taken under Tir Gofal. This will ensure that environmental factors play a significant part in the new scheme thus helping to maintain the countryside and promote sustainable farming systems. However, maintaining a viable rural community, particularly in the remoter parts of rural Wales, is regarded as vital to the long term future of farming in Wales and support for hill farming is considered to be crucial in achieving this objective. For this reason the new scheme remains firmly linked to its primary purpose as a compensatory mechanism. 7.9 There is significant evidence, not least from the evaluation of the effectiveness of Hill Livestock Compensatory Allowances summarised in Section 5.2, of the positive contribution which the mechanism has made to the stability of agricultural structures, and the new scheme will (within the limitations imposed by Regulation 1257/1999) continue to provide support for this. The aim will be to sustain the livelihood of those farming in disadvantaged areas, but in addition to this economic objective the support for farming families in these remoter areas will have the effect of sustaining rural communities, not simply in terms of their social fabric but also in relation to the retention of basic services such as village schools, shops and pubs. The policy therefore has significant local employment effects, not least when the enhanced attractiveness for rural tourism and recreation is also taken into account. 7.10 The priority measures to be supported under Article 33, for the adaptation and development of rural areas, will inter alia seek to underpin the retention of basic services and the renovation of villages and 181 indeed foster their development where this proves to be feasible. The intention is to adopt a bottom-up, community-led approach to such development, recognising the innovative work which has been undertaken in the area, not least by the groups established under the LEADER initiatives. 7.11 The Organic Farming Scheme, while forming an integral part of the agri-environmental measures proposed for implementation in this plan, is obviously very closely linked to the processing and marketing measures, further exemplifying the integrated nature of the approach which has been taken to developing a coherent set of proposals for the development of rural Wales. The Scheme, which has been developed from (but considerably enhances) a pre-existing scheme, offers Welsh farmers the opportunity to move into a sector which is growing rapidly and has the capacity to provide enhanced returns for distinctive, premium, and above all, quality products. It can also offer other significant environmental benefits in increasing biodiversity and encouraging farms to develop mixed farming systems. Further, the acquisition of organic status is taken into account in considering applications for entry to the Tir Gofal scheme (although payments are modulated to eliminate the possibility of double funding). 7.12 The overall intention, as stated above, has been to develop a plan based on a coherent set of measures which derives substantial additional benefits from the synergy between measures and the capability of the actions taken to be mutually reinforcing, each contributing in a targeted way to the achievement of common objectives. 7.13 In that respect the outputs which can be achieved from the implementation of the plan as a whole may be expected to be greater than might be achievable from the implementation of the different measures as a series of unrelated actions. The benefits in terms of the perceived gains for sustainable development, in economic, environmental and social terms, are highly significant. 7.14 That is not to say that the contribution of the Rural Development Plan as a whole should be seen as more than one component of the programme of national and co-financed actions which are planned for rural Wales over the next seven years. The contribution of the Objective 1 programme in West Wales will be extremely important, and there is provision in that programme for the non-accompanying measures to be separately funded to increase the total availability of resources. Similarly, the Objective 2 programme will provide for development of certain measures in parts of East Wales; the Objective 3 programme will involve training and development actions of importance in rural areas; and the LEADER and INTERREG initiatives will play an important part in ensuring that a flexible response can be taken to the developing needs of the rural areas of Wales. Nevertheless, the measures co-financed under this Plan have a distinctive contribution to make to achieving the key objectives for rural development in Wales as a whole, not least because they are concentrated on the most vulnerable sectors and, where appropriate, geographically targeted to ensure maximum return for the resources invested in rural development. 182 8. FINANCIAL TABLES 8.1 This section sets out the indicative financial expenditure for the measures to be supported under the Plan. As required by the Commission there are three finance tables containing the following information: Table 8.1 : Table 8.2 : Table 8.3 : the total of national and Community financial resources for each measure which will be supported. the application of national top-ups. the application of the appropriations resulting from modulation. 8.2 In each table, the presentation of the information reflects the allocation of the individual measures to be supported to the three key priorities for the Plan as set out in Section 6.1. 8.3 With regard to Table 8.1, it will be noted that the minimum EU contribution of 25% has not been respected in all of the measures to be supported. This is because we have been constrained by an inadequate allocation of EU co-financing from achieving all we wanted to from our priority measures and have addressed this through the use of national top-ups and modulation. In general, these top-ups are shown in Table 8.2 but, as requested by the Commission, the top-up for the Less Favoured Areas has been included in the co-financed figures in Table 8.1 resulting in a much reduced contribution rate. 8.4 In accordance with Article 43(1) of Regulation 1257/1999, the indicative amount of EAGGF Guarantee Funding, envisaged for expenditure under Article 33 in the Objective 2 and transitional areas of East Wales covered by the RDP, is 6 Meuro for the period 2000 to 2006. This is covered in more detail in Section 9.11. 183 184 (EURO million) 0.62 0.42 0.00 0.12 0.22 0.16 0.21 0.00 0.06 0.12 0.62 0.88 0.12 0.19 0.35 0.15 0.44 0.06 0.09 0.17 0.62 1.38 0.21 0.19 0.35 0.16 0.69 0.11 0.09 0.18 0.62 1.86 0.27 0.19 0.35 0.15 0.93 0.13 0.10 0.17 0.62 1.86 0.34 0.19 0.35 0.16 0.93 0.17 0.09 0.18 0.62 1.86 0.40 0.19 0.35 0.15 0.93 0.20 0.10 0.17 0.62 1.86 0.40 0.19 0.35 0.16 0.93 0.20 0.09 0.18 4.34 10.12 1.74 1.26 2.32 1.09 5.06 0.87 0.62 1.17 0.16 0.62 0.31 1.25 0.62 1.25 0.62 1.25 0.62 1.25 0.62 1.25 0.08 0.16 0.08 0.31 0.16 0.47 0.23 0.62 0.31 078 0.39 0.62 0.94 1.25 0.47 0.62 3.44 8.12 1.72 4.03 2.98 2.96 61.98 0.22 0.22 0.27 70.79 0.00 11.10 1.80 12.90 83.69 19.96 84.48 20.43 6.45 12.10 6.05 11.68 82.19 5.84 0.00 5.55 0.90 0.00 10.94 1.16 0.00 5.47 0.58 0.00 10.94 0.74 0.00 5.47 0.37 0.00 10.46 0.32 10.78 20.90 78.92 0.00 5.23 0.16 5.39 21.36 0.00 9.26 0.22 9.48 67.79 2.22 1.48 8.56 0.11 0.11 0.09 13.51 2.99 2.99 61.59 0.35 0.35 0.54 72.38 2.24 1.50 8.56 0.17 0.17 0.13 14.38 3.14 3.14 58.41 0.35 0.35 0.81 70.51 2.36 1.57 8.56 0.18 0.18 0.20 15.06 3.57 3.57 54.21 0.35 0.35 1.08 68.14 2.68 1.79 8.56 0.17 0.17 0.27 15.97 4.32 4.30 4.54 0.35 0.35 1.22 58.31 3.24 5.42 2.15 5.42 8.57 42.54 0.18 0.35 0.18 0.35 0.31 1.35 17.09 60.88 0.00 4.63 0.11 4.74 21.83 0.00 7.34 0.10 7.44 68.32 4.07 2.71 8.57 0.17 0.17 0.34 18.59 0.00 3.67 0.05 3.72 22.31 6.30 6.30 42.54 0.35 0.35 1.48 62.93 0.00 5.82 0.10 5.92 68.85 4.72 28.72 21.53 3.15 28.68 14.35 8.57 363.81 59.95 0.18 2.32 1.16 0.18 2.32 1.16 0.37 6.75 1.71 19.82 463.94 114.42 0.00 2.91 0.05 2.96 0.00 65.86 4.44 70.30 0.00 32.93 2.22 35.15 22.78 534.24 149.57 TABLE 8.1: INDICATIVE FINANCIAL PLANNING TABLE: RURAL DEVELOPMENT PLAN FOR WALES Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Total Public EU Public EU Public EU Public EU Public EU Public EU Public EU Public EU Cost Contri Cost Contri Cost Contri Cost Contri Cost Contri Cost Contri Cost Contri Cost Contri bution bution bution bution bution bution bution bution Priority 1 Investment in agricultural holdings Afforestation of agricultural land Other forestry measures (p) Diversification (s) Tourist and craft activities Priority 2 Training Processing & marketing of agricultural products Priority 3 Agri-environment: Objective 1 Agri-environment: non-Objective 1 Less favoured areas (n) Basic services (o) Renovation of villages (t) Protection of environment Total Evaluation Ongoing contracts: Agri-environment Forestry Total ongoing contracts Total Programme TABLE 8.2: INDICATIVE FINANCIAL PLANNING TABLE: RURAL DEVELOPMENT PLAN FOR WALES: NATIONAL TOP-UPS (EURO million) Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Total Public EU Public EU Public EU Public EU Public EU Public EU Public EU Public EU Cost Contri Cost Contri Cost Contri Cost Contri Cost Contri Cost Contri Cost Contri Cost Contri bution bution bution bution bution bution bution bution 0.00 0.00 0.00 0.20 0.50 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.12 0.20 0.50 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.21 0.25 0.55 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.27 0.30 0.55 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.34 0.35 0.55 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.40 0.40 0.55 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.40 0.46 0.64 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1.74 2.06 3.89 0.00 0.00 0.00 0.00 0.00 Priority 1 Investment in agricultural holdings Afforestation of agricultural land Other forestry measures (p) Diversification (s) Tourist and craft activities Priority 2 0.00 0.26 0.00 1.60 0.00 1.80 0.00 2.00 0.62 2.00 0.00 2.00 0.00 0.50 0.00 0.80 0.00 1.00 0.00 1.00 0.00 1.00 0.00 0.00 1.00 2.00 0.00 0.00 5.30 11.86 0.00 0.00 Training Processing & marketing of agricultural products Priority 3 2.00 2.00 0.00 0.50 0.50 0.00 5.96 0.00 0.00 5.96 0.00 10.42 0.00 13.71 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 16.72 0.00 0.00 0.00 0.00 0.00 19.84 0.00 0.00 0.00 0.00 0.00 0.00 0.00 3.25 3.25 0.00 0.50 0.50 0.00 10.42 0.00 0.00 0.00 0.00 0.00 0.00 0.00 4.50 4.50 0.00 0.55 0.55 0.00 13.71 0.00 0.00 0.00 0.00 0.00 0.00 0.00 5.75 5.75 0.00 0.55 0.55 0.00 16.72 0.00 0.00 0.00 0.00 0.00 0.00 0.00 7.25 7.25 0.00 0.55 0.55 0.00 19.84 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 8.00 8.00 0.00 0.55 0.55 0.00 21.45 0.00 0.00 21.45 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 9.86 9.86 0.00 0.64 0.64 0.00 25.50 0.00 0.00 25.50 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 40.61 40.61 0.00 3.89 3.89 0.00 113.85 0.00 0.00 113.85 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Agri-environment: Objective 1 Agri-environment: non-Objective 1 Less favoured areas (n) Basic services (o) Renovation of villages (t) Protection of environment Total Evaluation Ongoing contracts: Agri-environment Total Programme 185 186 (EURO million) 0.00 0.00 0.00 0.00 11.47 7.07 13.79 8.49 16.08 9.90 16.12 9.90 21.45 0.00 20.61 0.00 0.80 0.40 1.04 0.52 1.20 0.60 1.42 0.71 0.00 0.00 1.22 0.65 0.00 0.00 5.34 2.67 6.38 3.19 7.44 3.72 7.35 3.68 9.70 0.00 9.86 4.83 45.86 22.94 6.98 3.49 98.70 60.84 TABLE 8.3: RURAL DEVELOPMENT PLAN FOR WALES: APPLICATION OF THE APPROPRIATIONS RESULTING FROM MODULATION Agri-environment: Objective 1 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Total Public EU Public EU Public EU Public EU Public EU Public EU Public EU Public EU Cost Contri Cost Contri Cost Contri Cost Contri Cost Contri Cost Contri Cost Contri Cost Contri bution bution bution bution bution bution bution bution 0.00 0.00 5.34 4.00 6.38 4.78 7.44 5.58 7.35 5.51 9.70 0.00 9.86 7.25 45.86 34.41 Agri-environment: non-Objective 1 Afforestation of agricultural land Total PART 3: PROPOSED MEASURES This part of the plan addresses point 9 of the Annex to Commission Regulation 1750/1999: 9 Description of the measures contemplated for implementing the Plan 187 188 9.1 GOOD FARMING PRACTICE 9.1.1 The new Rural Development Regulation (Council Regulation 1257/1999), under which the agrienvironment schemes will operate for the next seven years, lays down detailed rules for the schemes. One of the requirements of the Regulation is that farmers entering agri-environmental commitments must, as a minimum, adhere to at least the standard of Good Farming Practice on their whole farm. Similar conditions will also apply to LFA payments. 9.1.2 The purpose of the Good Farming Practice requirement is to ensure that farmers receiving incentive payments for environmental land management and/or compensatory payments for farming in disadvantaged areas follow good agricultural practice across the whole of their farms. Good farming practice is therefore the baseline above which agri environment scheme measures operate. Beyond that baseline, agreement holders will in addition have to meet the specific scheme requirements on the land subject to the agri-environment measures, and for which payments are made. Agri-environment payments are not intended to help farmers achieve good farming practice but to compensate, or provide an incentive for the undertaking of measures which go beyond good farming practice. 9.1.3 In drawing up these standards of good farming practice the National Assembly for Wales has tried to ensure they will not impose additional costs or unreasonable burdens on those who are managing their land responsibly and in accordance with relevant environmental legislation. The standards have, therefore, been chosen to ensure they are agriculturally practicable and will aid in the protection of the environment. The Assembly's Statutory Advisers and farming and wildlife interests were consulted in the development of these requirements. 9.1.4 Regulation 1750/1999 lays down the detailed rules for application of the Rural Development Regulation (1257/1999). Under Section 9, which sets out the rules for several measures including agrienvironment and less favoured areas, Article 28 states that: "Usual good farming practice is the standard of farming which a reasonable farmer would follow in the region concerned. Member states shall set out verifiable standards in their rural development plans. In any case, these standards shall entail compliance with general mandatory environmental requirements." 9.1.5 Regulation 1750/1999 states (Article 19) that "Where a farmer enters into an agri-environmental commitment in relation to part of the farm, he shall adhere to at least the standard of good farming practice in relation to the whole of the farm." In addition, Council Regulation 1257/1999, Article 14. 2 states that compensatory allowances shall be granted per hectare of areas used for agriculture to farmers who apply usual good farming practices compatible with the need to safeguard the environment and maintain the countryside, in particular by sustainable farming. 189 The Structure 9.1.6. The structure will have two elements. First, compliance with existing environmental legislation; second, a list of 'verifiable standards' both of which will be included as conditions for all new agrienvironment agreements or LFA allowance payments. In addition, all farmers joining agri-environment schemes will be given copies of the Codes of Good Agricultural Practice for Air, Soil and Water (which are several hundred pages long and contain a mixture of advice, recommendations and obligations) and encouraged to comply with the recommendations in them. 9.1.7 Requirements specific to the Tir Mynydd and Tir Gofal schemes are set out after the legislation and verifiable standards which apply for all farmers receiving support under these schemes. 9.1.8. he UK has wide-ranging environmental protection legislation, of which the main items are set out below, specifying the minimum environmental standards for the purpose of other articles of the RDR. This legislation is enforced by other Government Agencies or local authorities. However, National Assembly staff will carry out a basic check and if they suspect any clear breaches of the legislation they will inform those Agencies and ask them to carry out an inspection. Also, arrangements will be made for the authorities which enforce this legislation to notify the Assembly of any cases where farmers are convicted of offences under relevant provisions of this legislation or, in appropriate cases, against whom a statutory enforcement notice has been raised. Where such notification is received in relation to farmers participating in agri-environment schemes (and/or in receipt of LFA allowances), consideration will be given to whether penalties for breach of agreement should be effected, in relation to the objectives of the agreement, or in extreme cases, for exclusion from the scheme. Any penalty would be proportionate to the offence (see Section 12 of this Plan for details of controls and penalties). 9.1.9. The verifiable standards of Good Farming Practice are ones which are complementary to existing legislative requirements and are capable of verification by National Assembly staff to EU audit standards as part of the existing checks on 5% of agri-environment scheme participants and LFA farmers. These standards have been chosen so that they are agriculturally practicable and otherwise beneficial by, for example, preventing environmental damage. If these conditions are breached, proportionate penalties will be applied. 9.1.10. While all farmers joining agri-environment schemes will also be given copies of the Codes of Good Agricultural Practice on Water, Soil and Air compliance with the recommendations and advice in these Codes will not be subject to 5% checks as not all the standards are verifiable and penalties will not be applied. Farmers will be required to retain copies of the Codes throughout the life of their agreement. 9.1.11. For each of the following elements of good farming practice, a short description of the relevant legislation (the minimum standard) is shown, together with the 'verifiable standard' and reference to the relevant Code(s) of Good Agricultural Practice. 9.1.12. No payments will be made under the Schemes for complying with the legislative requirements or with the verifiable standards. 190 WATER POLLUTION a) Legislation Water Resources Act 1991- Part III deals with the control of pollution of water resources and Section 85 of Chapter II sets out the general offence of polluting controlled waters. It is an offence under this section if a person 'causes or knowingly permits any poisonous, noxious or polluting matter or any solid waste to enter any controlled waters'. 'Controlled waters' include the territorial sea, coastal waters, all inland freshwaters and groundwaters. This offence applies to any person and therefore is not specific to agriculture. Enforcement Agency: Environment Agency Control of Pollution (Silage, Slurry and Agricultural Fuel Oil) Regulations 1991 and as amended 1997 - these Regulations were made under Section 92 of the Water Resources Act 1991 and apply specifically to the agricultural sector in England and Wales. They require that where a farmer stores silage, slurry or fuel oil, any structure built or substantially altered since 1991 must comply with criteria specified in the regulation. Enforcement Agency: Environment Agency The Groundwater Regulations 1998 - these regulations complement the implementation of Council Directive 80/68/EEC on the protection of groundwater. They require that the disposal of prescribed substances, which are potentially hazardous in the environment (List I and List II substances), if not controlled under other relevant legislation, must be authorised under this Regulation. Authorisations may only be granted after prior investigation. Lists I and II are set out in the Schedule to the regulations and are based on the requirements of the lists included in Council Directive 80/68/EEC. Enforcement Agency: Environment Agency b) Verifiable Standards ! silage and slurry stores: any farmer who constructs a new silage or slurry storage facility must notify the Environment Agency before starting to use it. Checks will be carried out to see that this notification has been given for any new stores. sheep dip: any farmer proposing to dispose of sheep dip on his land must obtain prior authorisation from the Environment Agency. Checks will be made to see that either an authorisation has been obtained or that there is a reason why no authorisation is needed in that individual case. pollution: where an inspection reveals that there is an obvious pollution problem on a holding or that the farmer has breached regulations in terms of waste disposal on land, the matter would be reported to the Environment Agency. ! ! Codes of Good Agricultural Practice Code of Good Agricultural Practice for the Protection of Water. 191 AIR POLLUTION a) Legislation Clean Air Act 1993 - under this act it is an offence to burn waste materials in the open on trade premises if the burning produces dark smoke. Land being used for commercial agricultural or horticultural purposes constitutes a trade premises under this Act. Enforcement Agency: Local Authorities Crops Residues (Burning) Regulations 1993 - the regulations make it illegal to burn the following crop residues: cereals (straw and stubble); dry harvested field beans and peas; and oilseed rape, remaining in the field after harvest. An exception is made in certain circumstances (e.g. where a Plant Health Order has been served). Enforcement Agency: Environmental Health Officers of Local District Councils Heather and Grass etc. (Burning) Regulations 1986 - the regulations forbid the burning of heather, grass, gorse, bracken and vaccinium in most areas after 31 March, and in upland areas after 15 April. No burning is permitted without a licence after those dates, until 1 October in Upland areas and 1 November elsewhere. Local authorities can permit burning after these dates under certain circumstances. Enforcement Agency: Local authorities b) Verifiable Standard Breaches of the legislative requirements are likely to arise from isolated incidents and it is therefore inappropriate to set verifiable standards for this element. Codes of Good Agricultural Practice Code of Good Agricultural Practice for the Protection of Air. 192 FERTILISERS AND PESTICIDES a) Legislation The Action Programme for Nitrate Vulnerable Zones (England and Wales) Regulations 1998 - specific to the agricultural sector, the regulations bring into effect (in England and Wales) the requirement for an action programme under Council Directive 91/676/EEC concerning the protection of waters against pollution caused by nitrates from agricultural sources. The regulations apply within areas designated as 'Nitrate Vulnerable Zones'(NVZs). Enforcement Agency: Environment Agency Part III of the Food and Environment Protection Act 1985 and the Control of Pesticides Regulations 1986 provides for the continuous development of means to protect the health of human beings, creatures and plants; to safeguard the environment; to secure safe, efficient and humane methods of controlling pests; and with a view to making information about pesticides available to the public. The Act provides the Assembly with powers to regulate the import, sale, supply, advertisement and use of pesticides, both generally and in relation to specific products. The Assembly is also empowered to set maximum residue limits, to require information from dealers in, and manufacturers and users of, pesticides and to issue codes of practice for the safe use of pesticides on farms and elsewhere. The Act applies throughout the UK. Enforcement Agency: Health and Safety Executive; National Assembly for Wales; Environment Agency Plant Protection Products Regulations 1995 - the Regulations implement Council Directive 91/414/EEC in the United Kingdom. The Regulations provide for a Community-wide system controlling the sale and supply of plant protection products (mainly agricultural pesticides) in the UK. They also set out conditions to be satisfied for approvals based on mutual recognition, which allows approval to be granted for a use already approved in another Member State provided that the agricultural, climatic and plant health conditions can be shown to be comparable and the active substance(s) have been authorised by the Commission. Enforcement Agency: Health and Safety Executive; National Assembly for Wales; Environment Agency b) Verifiable Standards Breaches of the legislative requirements are likely to arise from specific incidents, it is therefore inappropriate to set verifiable standards for this element. Codes of Good Agricultural Practice Code of Good Agricultural Practice for the Protection of Soil; Code of Good Agricultural Practice for the Protection of Water; Code of Good Agricultural Practice for the Protection of Air. In addition, there is a Code of Good Practice for the safe use of pesticides on farms and holdings. 193 LINEAR FEATURES a) Legislation Hedgerow Regulations 1997 - the regulations make it illegal to remove most countryside hedgerows without first obtaining permission from the local planning authority. The authority can refuse permission for the hedgerow to be removed if, according to a set of statutory criteria, the hedgerow is considered to be important. Enforcement Agency: Local Authorities b) Verifiable Standards ! field boundaries: removal or destruction of any hedges, stone walls and other types of traditional field boundaries on the farm will not be permitted except by special derogation and subject to any necessary consent under the Hedgerow Regulations 1997. Enforcement will be through visual assessment of any recent damage during field checks. hedgerows: trimming of hedgerows on the farm must not be carried out between 15 March and 31 August. Trimming of hedgerows by Local Authorities or Highways Authorities where the hedgerow is interfering with traffic will be subject to a derogation. Enforcement will be through visual evidence of recent damage during any checks carried out in these months. ! Codes of Good Agricultural Practice Code of Good Agricultural Practice for the Protection of Soil. 194 DESIGNATED SITES a) Legislation Wildlife and Countryside Act 1981 - provides a measure of protection for all wild birds, wild plants and certain wild animals. The protection afforded to wild birds reflects that required under Articles 5 & 6 of the Birds Directive (79/409). The Act also provides protection for designated sites (Sites of Special Scientific Interest). There are over 1000 SSSIs in Wales covering around 11% of the total land area. Owners, including farmers, are required to give written notice to the Countryside Council for Wales before carrying out any operation which could damage the special conservation interests of a SSSI. Enforcement Agency: Countryside Council for Wales The Conservation (Natural Habitats etc) Regulations 1994 - provide additional protection for certain plants and animals, which reflect the requirement of Articles 12 and 13 of the Habitats Directive (92/43). The Regulations also provide additional protection above that for SSSIs for sites that are within Special Protected Areas (SPAs) and Special Areas of Conservation (SACs). Enforcement Agency: Countryside Council for Wales Countryside and Rights of Way Bill - The Countryside and Rights of Way Bill is expected to be enacted later this year. It will give greater protection to Sites of Special Scientific Interest (SSSIs) and strengthen wildlife enforcement legislation. The SSSI provisions are targeted at improving the protection and management of SSSIs through a number of means, combining strong protection with building a productive partnership with land managers. Enforcement Agency: Countryside Council for Wales; Local Authorities Ancient Monuments and Archaeological Areas Act 1979 (AMAA) Ancient Monuments (Class consents) Order 1994 (AMCC) Section 1 of the AMAA Act empowers the National Assembly for Wales to designate monuments by placing them on a Schedule. Section 2 of the Act stipulates that works affecting these scheduled monuments require a consent from the Assembly. The definition of works is broad and encompasses works which do not require planning permission including works which qualify as permitted development. In the context of farming, consent is required for change of land use (e.g. ploughing of pasture) within the scheduled area, and for works such as tree or hedge planting or removal, stone clearance, track construction, and agricultural developments otherwise permitted under development control regulations. Class Consent 1 of the AMCC Order 1994 pertains to arable or horticultural cultivation, permitting the continuance of cultivation practices which have previously been undertaken within a specified prior period, but excluding tree or hedge planting, subsoiling and drainage. However, the class consent expires where cultivation is suspended for a period of six years and subsequent cultivation requires consent from the Assembly. Enforcement Agency: CADW 195 b) Verifiable Standards ! Sites of Special Scientific Interest: farmers are required to notify the Countryside Council for Wales of any intended operations that are likely to damage statutorily designated SSSIs. It will be a condition of the schemes that participants will not proceed with any such operations without having obtained prior approval from the Countryside Council for Wales. Scheduled Ancient Monuments: damage or destruction of any scheduled ancient monuments will not be permitted. Evidence of such operations will be reported to CADW. ! Codes of Good Agricultural Practice Code of Good Agricultural Practice for the Protection of Soil 196 AGRICULTURAL/FORESTRY MANAGEMENT a) Legislation Forestry Act 1967 - a Felling Licence or approval under a Forestry Commission endorsed Grant Scheme is required by anyone involved in the felling of trees. All work must be undertaken in accordance with the terms of the permission granted by the Forestry Commission. b) Verifiable Standards ! overgrazing: this is defined as 'grazing land with livestock in such numbers as to adversely affect the growth, quality or species composition of vegetation (other than vegetation normally grazed to destruction) on that land to a significant degree'. Cases of suspected overgrazing which are identified in the course of routine 5% checks will be referred to technical staff who will investigate them using a standard methodology. They will carry out a site-specific appraisal of whether overgrazing is occurring and ascertain the causes. This appraisal will be used to set a management regime including a maximum stocking rate to be observed on that site, for which no compensation is payable. Failure to follow this regime would be a breach of this condition. supplementary feeding: in some cases no supplementary feeding is permitted under the terms of the agreement. Where it is permitted, the feed must be provided in such a way that the vegetation is not excessively trampled or poached by animals or rutted by vehicles used to transport feed. Cases of suspected unsuitable supplementary feeding will be investigated and failure to follow advice thereafter would be a breach of this condition. undergrazing: to prevent problems of undergrazing a minimum stocking level of 0.10 LU/ha will apply. Producers maintaining whole farm stocking levels below this level will not qualify for a compensatory payment, except in cases where agri-environment initiatives or other recognised environmental objectives require a reduced level of stocking. ! ! Codes of Good Agricultural Practice Code of Good Agricultural Practice for the Protection of Soil; Code of Good Agricultural Practice for the Protection of Air; Code of Good Agricultural Practice for the Protection of Water. Specific standards required for Tir Mynydd 9.1.13 For Tir Mynydd, the selection of farms to be checked will attach a high weighting to farms with stocking levels which may cause overgrazing. All farms with a stocking density of 1.8 LU/ha or above will be subject to physical inspection in 2001, or in the year in which this threshold is first exceeded, and at least once every three years thereafter. Furthermore, in areas where experience shows that overgrazing can occur at a lower stocking density, as a result of altitude, exposure or other relevant factors, the Welsh Authorities will ensure that the risk analysis used in determining the selection of farms for physical 197 inspections will attach a high weighting to farms with stocking densities below this level. Physical inspections will involve a site-specific appraisal of whether overgrazing is occurring and will ascertain the causes. If overgrazing is identified, a management regime including a maximum (and, where appropriate, a minimum) stocking rate to be observed on that site will be prescribed. A follow-up visit will be undertaken no later than twelve months after the initial inspection to ensure compliance with the prescribed management regime and stocking limits. Failure to observe the stocking limits specified in the management regime would be a breach of Good Farming Practice requirements and would lead to loss of all entitlement to Tir Mynydd payments. Specific standards required for Tir Gofal 9.1.14 In general, the overall stocking density must not exceed 1998 stocking levels. In the LFA, the maximum stocking density must not exceed that agreed for the Tir Mynydd Scheme. For other areas applications will be considered on a case by case basis and specific management regimes set which will include the maximum (and as appropriate the minimum) stocking density. Farmers in the scheme must comply with the appropriate stocking density. 9.1.15 Tir Gofal management guidelines may require stock reduction on, or exclusion from, some habitats and features on the farm. Any surplus stock should normally be removed from the land under agreement, but exceptionally it may be possible to accommodate some of the surplus stock on improved grassland. In such cases this must not result in environmental damage from overstocking. 198 9.2 EC MINIMUM STANDARDS FOR ENVIRONMENT, ANIMAL WELFARE AND FOOD AND ANIMAL HYGIENE 9.2.1. Council Regulation 1257/1999 requires member states to apply minimum standards regarding environment, hygiene and animal welfare. These are conditions for: investment in agricultural holdings (Section 9.5) and improving processing and marketing of agricultural products (Section 9.9). ENVIRONMENT 9.2.2. In Wales the minimum standards in respect of the environment are detailed in the table below. The table also shows the penalties applicable for any offence and the public body responsible for enforcing the legislation. 9.2.3. The environmental legislation will also be taken into account in applying standards of Good Farming Practice to participants in agri-environment schemes (Section 9.8) and recipients of support in less favoured areas (Section 9.7). MINIMUM ENVIRONMENTAL STANDARDS Relevant Legislation Water Resources Act 1991 Groundwater Regulations 1998 Control of pollution (Silage, Slurry and Agricultural Fuel Oil) Regulations 1991 The Action Programme for Nitrate Vulnerable Zones (England and Wales) Regulations 1998 Hedgerow Regulations 1997 Wildlife and Countryside Act 1981 Subject Pollution of water Disposal or tipping Storage and handling of these substances Penalty Up to £20,000 Up to £20,000 Up to £5,000 Enforcement Agency Environment Agency Environment Agency Environment Agency Measures to reduce nitrate leaching Unlimited fine Environment Agency Removing hedgerows Damage to Sites of Special Scientific Interest; wildlife Offence Unlimited fine Unlimited fine Local Authorities Countryside Council for Wales 199 Relevant Legislation Part III of the Food and Environment Protection Act 1985 Plant Protection Products Regulations 1995 Clean Air Act 1993 Crops Residues (Burning) Regulations 1993 Heather and Grass etc. (Burning) Regulations 1986 Ancient Monuments (Class consents) Order 1994 Protection of Badgers Act 1992 Forestry Act 1967 Subject Misuse of pesticides Penalty Unlimited fine EnforcementAgency Heath and Safety Executive Heath and Safety Executive Environment Agency National Assembly for Wales National Assembly for Wales CADW Misuse of pesticides Unlimited fine Emitting dark smoke Burning crop residues Up to £20,000 Up to £5,000 Burning heather Up to £1,000 Damaging ancient monuments Unlimited fine Protection of badgers Level 5 fine or up to National Assembly for / badger setts 6 months imprisonment Wales Licences for felling trees Level 4 fine or twice Forestry Commission the value of the trees felled whichever is the higher 200 ANIMAL WELFARE 9.2.4. A comprehensive framework of legislation exists to protect animals kept for farming purposes. The Agriculture (Miscellaneous Provisions) Act 1968 makes it an offence to cause unnecessary pain or unnecessary distress to any livestock, while Protection of Animals Acts 1911 makes it an offence to cause unnecessary suffering to any domestic or captive animal. The 1968 Act also authorises Agriculture Ministers to issue more detailed regulations specifying detailed conditions under which livestock must be kept. It also provides for codes of recommendations for the welfare protection of farm animals. Storekeepers are required by law to be familiar with, and have access to, the welfare codes which encourage the adoption of the highest standards of husbandry. Although the codes are not directly applicable in law, failure to observe their provisions may be used in support of a prosecution for offences under the 1968 Act. Enforcement 9.2.5 The 1968 Act, and its subsidiary legislation is enforced by the State Veterinary Service (SVS). The SVS visits farm premises to check the welfare of the livestock, and investigates all complaints and allegations that welfare requirements have been infringed. The SVS liaises closely with local authorities, the police and organisations such as the RSPCA. They do not hesitate to prosecute, where necessary, or to provide expert witness in the case of prosecutions brought by other bodies. 9.2.6 As a member of the European Union, the UK is required to implement into domestic law any Directives adopted. Other member states are also bound by the Treaty of Rome to implement legislation in their countries. 9.2.7 There are currently 3 main EC Directives laying down minimum standards for the welfare of specific farm animals: ! ! ! 88/166/EEC (laying hens in battery cages); 91/629/EEC, as amended by 97/2/EC and 97/182/EC (calves); and 91/630/EEC (pigs). These Directives are implemented in GB by the Welfare of Livestock Regulations 1994 (S.I 1994, No. 2126) and the Welfare of Livestock (Amendment) Regulations 1998 (S.I 1998, No. 1709). Both are made under the Agriculture (Miscellaneous Provisions) Act 1968. 9.2.8 Directive 98/58/EC, which sets minimum standards for the welfare of all farm animals, applies from 31 December 1999 and will be implemented into UK legislation in due course by updated Welfare of Farmed Animal Regulations. 9.2.9 Directive 99/74/EC sets new standards for laying hens. It bans the barren battery cage from 2012 and lays down minimum welfare standards for the keeping of laying hens in non-cage systems. This Directive applies from 1 January 2002 and will be implemented in due course. 9.2.10 Encouragement to farmers to adopt high standards of animal husbandry is given through the welfare codes, through a wide range of advisory booklets on welfare issues (e.g., lameness, heat stress, condition scoring, lamb/calf survival etc.) and through advisory meetings and workshops run by the agricultural consultancy, ADAS. 201 FOOD HYGIENE General 9.2.11 The minimum hygiene standards for food businesses are laid down in the General Food Hygiene regulations and the Temperature Control regulations made under the Food Safety Act 1990. This secondary legislation implements Council Directive 93/43/EEC on the Hygiene of Foodstuffs. The Temperature Control regulations are a national measure. Enforcement 9.2.12 These standards are enforced by Environmental Health Officers in (local) Food Authorities. Lead responsibility for interpretation and enforcement of the hygiene legislation lies with the Food Standards Agency. In any dispute between a Food Authority and a food business proprietor, interpretation of the legislation rests with the courts who are able to penalise either by fine, 2 years imprisonment or both, depending on the outcome. 9.2.13 The enforcement authorities are required to pay due attention to statutory Codes of Practice, issued under the Food Safety Act 1990, which provide instructions on enforcement of the SIs. The Food Standards Agency also formally recognises a number of Industry Guides to Good Hygiene Practice which provide advice to various sectors of the food industry on compliance with the Regulations. Following these Guides is voluntary. Dairy 9.2.14 The Dairy Products (Hygiene) Regulations 1995, as amended, (DPHRs) implement within England and Wales Council Directive 92/46 which lays down the health rules for the production and placing on the market of raw milk, heat-treated milk and milk-based products (similar legislation applies in Scotland and Northern Ireland). 9.2.15 The Regulations apply to all premises which produce and place on the market raw milk, heattreated drinking milk, milk for the manufacture of milk-based products and milk-based products intended for human consumption. However, they do not apply to most retail premises, which sell milk and milkbased products e.g. to the ultimate consumer. Storage depots and wholesalers are subject to only minimal requirements. Enforcement 9.2.16 All premises with one or more cows, goats, sheep, and buffaloes need to be registered and inspected by the Dairy Hygiene Inspectorate (DHI) in England/Wales (or licensed by the Environmental Health Department in Scotland and with the Department of Agriculture in Northern Ireland) if they are producing milk for sale (known as production holdings). 9.2.17 All premises heat-treating milk or processing dairy products for sale are known as dairy establishments. Such premises (which may be on farm) are subject to additional requirements to those 202 applying to production holdings. In particular they need to be approved (or inspected in the case of direct sellers of raw milk or milk products where approval is not required) by Environmental Health Departments (EHDs), which have overall responsibility for supervising the necessary standards of hygiene in such premises. 9.2.18 Enforcement instructions are provided both for the DHI and EHDs. 9.2.19 Six Guidance booklets on the Regulations (including a Food Safety Act 1990 - Code of Practice) are available for use by interested parties. Penalties 9.2.20 Regulation 19 of the DPHRs sets out offences and penalties for infractions under these Regulations. These are part of criminal law. Enforcement criteria ranges from supervision of activities pending correction (e.g. via Improvement Notices) through to withdrawal of registrations or approvals. There are procedures for appeals to a Magistrates Court. In the event of prosecutions, fine and/or imprisonment may result. Egg Products Regulations 9.2.21 The Egg Products Regulations are made under the Food Safety Act 1990. This legislation implements Directive 89/437/EEC on 'hygiene and health problems affecting the production and the placing on the market of egg products'. Enforcement 9.2.22 These standards are enforced by Environmental Health Officers in (local) Food Authorities. Egg product establishments must be approved by the enforcement authorities. Revocation of approved status lies with Food Authorities and in special cases at Ministerial level. In any dispute between a Food Authority and an Egg Product establishment, interpretation of the legislation rests with the courts who are able to penalise either by fine, 2 years imprisonment or both, depending on the outcome. 9.2.23 The enforcement authorities are provided with a list of statutory and other guidance to assist the enforcement role. 9.2.24 The General Food Hygiene, Temperature Control and the Egg Products Regulations do not cover animal welfare, animal hygiene or any aspects of primary production. These secondary regulations have cross reference to other legislation not directly associated with food. The Ungraded Eggs (Hygiene) Regulations 1990 9.2.25 These regulations are under review. They were made under the 1984 Food Act and refer to the Council Regulation 2772/75 on the 'Marketing Standards for eggs as amended'. Their main force is to prevent the retail of cracked eggs by farms, local markets or by door to door sales. 203 Enforcement 9.2.26 These regulations are enforced by the local authorities. Interpretation in dispute lies with the courts who are able to penalise infractions either by fine, 2 years imprisonment or both, depending on the outcome. 9.2.27 No enforcement guidance has been issued on the UEHRs. 204 MEAT HYGIENE Establishments producing fresh meat 9.2.28 With certain limited exceptions (such as small on-farm poultry slaughterhouses and premises supplying the final consumer, e.g. farm shops), all premises slaughtering, cutting or storing fresh meat intended for sale for human consumption must hold a licence under one or more of the following Regulations, made under the Food Safety Act 1990: ! The Fresh Meat (Hygiene and Inspection) Regulations 1995 (as amended) (which implement the EC Fresh Meat Directive 64/433/EEC (as amended) and, in respect of large farmed game, the EC Farmed Game Directive 91/495/EEC). The Poultry Meat, Farmed Game Bird Meat and Rabbit Meat (Hygiene and Inspection) Regulations 1995 (which implement the EC Poultry Meat Directive 71/118/EEC (as amended) and, in respect of farmed game birds and rabbits, the EC Farmed Game Directive 91/495/EEC). The Wild Game Meat (Hygiene and Inspection) Regulations 1995 (which implement, in part, the EC Wild Game Directive 92/45/EEC). ! ! 9.2.32 Licences are granted, on application, if the premises meets the structural and hygiene standards laid down in the Regulations. Licensed premises must be supervised by an Official Veterinary Surgeon of the Meat Hygiene Service (MHS) if those premises meet the structural and hygiene standards laid down in the relevant Regulations. The Regulations are enforced, in stand alone premises, by the local authority and in combined premises by an Official Veterinary Surgeon of the Meat Hygiene Service (MHS). Enforcement 9.2.37 The relevant enforcement authority has powers to take enforcement action when standards in approved premises deteriorate. These include powers to prosecute breaches of the Regulations and, in the case of the Minced Meat & Meat Preparations (Hygiene) Regulations 1995, to seize unfit minced meat & meat preparations and, ultimately, to revoke premises' approvals. 9.2.38 Local Authorities and the MHS are subject to the relevant Codes of Practice issued under the Food Safety Act 1990 and receive instructions and guidance through Codes of Practice, Guidance Notes and, for the MHS, the Operations Manual. These are public documents. 9.2.39 Premises which are exempt from the Regulations listed in paragraphs 1 and 2 of this section are nevertheless subject to the requirements of the Food Safety Act 1990 and the Food Safety (General Food Hygiene) Regulations 1995. Penalties 9.2.40 If found guilty of an offence under the Meat Products (Hygiene) Regulations 1994 or the Minced Meat & Meat Preparations (Hygiene) Regulations 1995 an operator shall be liable: (i) on summary conviction, to a fine not exceeding the statutory maximum; or (ii) on conviction on indictment, to a fine or imprisonment for a term not exceeding two years or both. 205 9.3 ECONOMIC VIABILITY OF HOLDINGS 9.3.1 The term economic viability is used to refer to the holding's ability to be economically sustainable under the current owner. The holding is taken to include any supplementary activities, such as forestry, tourism etc. The owner's alternative incomes, such as income from services, shall be taken into account if they are permanent. 9.3.2 For the assessment of economic viability, the aid application must be accompanied by an income declaration and 3 years annual accounts supplemented by a complete list of economic activities. If these documents are not available, for example, if the holding is newly established, a Business Plan shall be attached. The financial situation after the investment shall be shown by the cost estimates. No cost estimates are required for minor investments in viable holdings. The assessment shall relate to a normal year as regards income and expenditure. This means that the information provided may need to be adjusted to a normal year. 9.3.3 If the annual accounts and the income declaration show that the holding has sound finances and is profitable and that the owner has a declared income which is sufficient for his needs, no further testing is required. 9.3.4 If the holding has weak finances, the need to show improved returns increases. Together with the owner's other incomes, the return must be sufficient to provide assurance that agricultural income together with other existing earnings opportunities is sufficient for the owner's own needs. 9.3.5 For part-time holdings which are carrying out urgent investments for environmental and animal environment improvements, a low return or a loss may be acceptable if the holding is still considered to be viable in the long term. For investments where aid can be paid for up to 100% of the eligible costs, there is no requirement to carry out an assessment of the holding's economic viability. 9.3.6 Cost estimates used to demonstrate economic viability must include sufficient information about the holding's economic circumstances and any other information required by the aid authorities. 9.3.7 The aid authority may accept simplified financial estimates if the holding is judged on the basis of experience to be economically viable, such as a dairy holding which is sufficiently large and has only a moderate level of debt. Processing and Marketing of Agricultural Produce under Articles 25 to 28 of Regulation 1257/1999 9.3.8 The eligibility criteria for the activities being supported under this measure reflect the more commercial nature of the projects that will be submitted. Although the activities under this measure will secure significant direct benefits for primary producers, the majority of applicants will be private sector companies or groups of individuals rather than a single farmer who is solely dependent on the income from the holding. This presents a more complicated financial structure which will need detailed analysis. In addition, the levels of support provided under this measure are likely to be considerably higher than that under other measures. Additional information relating to viability is therefore included in the text for this measure. 206 9.4 DEROGATIONS TO ARTICLE 37(3) REGULATION 1257/1999 9.4.1 Consistent with Article 37(3) of Regulation 1257/1999, the National Assembly will not support under the Rural Development Plan, projects or investments falling within the scope of support measures under Common Market Organisations or research projects, measures to promote agricultural products or to eradicate animal diseases. 9.4.2 However, we would not wish to deny access to the measures in the Plan to Producer Organisations recognised under the fruit and vegetable regime or individual members of such a producer organisation where the measures complemented the support already available to them under their operational plan. We are therefore seeking an exception, as provided for under Article 37(3) of Regulation 1257/1999. The exception provides for individual members of a producer organisation, or Producer Organisations themselves, to be permitted to apply for support under the Plan, in respect of: ! ! ! Articles 4-7 (investment in agricultural holdings); Articles 25-28 (processing and marketing of agricultural products); and Article 33 (promoting the adaptation and development of rural areas - indents 7 and 11). 9.4.3 This exception is in order to allow individuals or Organisations to pursue projects and investments which are outside the scope of their Producer Organisation's current operational programme or which are undertaken in an individual capacity. Verification of this will be included as part of the respective assessment process for each Article(s). The Common Market Organisation affected by this derogation is the Fruit and Vegetable Producers Scheme. 9.4.4 The National Assembly recognises the need to ensure coherence and complementarity between actions financed under the fruit and vegetables Common Market Organisations and Regulation 1257/1999 and confirm that the intention is to implement these provisions so as to ensure no overlap or duplication of funding opportunities occurs at the level of individual projects. 9.4.5 In order to ensure this coherence the following conditions will apply: ! any investments of an individual nature conceived and implemented by farmer members of a PO in a personal capacity will be financed exclusively under the Wales Rural Development Plan. PO's will only be able to access the Plan for collective actions concerning products or specific activities which do not fall within the scope of their approved operational programme and whose purpose would not undermine or limit the future development of the PO concerned. project assessment procedures will ensure that access by a PO to the Plan as a means to supplement its financial resources, once the budget under its approved operational programme under the CMO has been exhausted, will be excluded. any support under the RDP which would discourage non-members of a PO to join a PO will be avoided. the actions implemented under the Plan will not weaken or contradict actions implemented by PO's in the area concerned. ! ! ! ! 207 9.5 INVESTMENTS IN AGRICULTURAL HOLDINGS 9.5.1 Activities in this area are covered by Articles 4 to 7 of Council Regulation 1257/1999. Article 4 allows for support for investment in agricultural holdings to contribute to the improvement of agricultural incomes and of living, working and production conditions. It indicates that such investment shall pursue one or more of the following objectives: ! ! ! ! ! to reduce production costs; to improve and re-deploy production; to increase quality; to preserve and improve the natural environment, hygiene conditions and animal welfare standards; and to promote the diversification of farm activities. 9.5.2 Support for investment shall be granted to agricultural holdings for which economic viability can be demonstrated, which comply with minimum standards on the environment, hygiene and animal welfare, and where the farmer possesses adequate occupational skill and competence. 9.5.3 Support shall not be made available for investment which has as its objective an increase in production for which no normal market outlets can be found, or where, if relevant, the availability of the corresponding production rights (e.g. milk quotas) cannot be demonstrated. The total amount of support, expressed as a percentage of the volume of eligible investment, is limited to a maximum of 40% generally and to 50% in less favoured areas. This may increase for young farmers to a maximum of 45% and 55% respectively. 9.5.4 The adoption of this measure is expected to achieve the following objectives as identified in the SWOT in Section 5.1: ! ! ! ! ! ! ! ! assist in providing multiple sources of income for farming households; reduce dependency on narrow and vulnerable economic base; reduce costs of production and improve business efficiency; provide opportunities for business development; improve product quality; encourage energy conservation and reduce pollution; improve animal welfare and encourage sustainable use of resources; encourage the adoption of environmentally friendly systems of production. Rationale for proposals 9.5.5 If farming in Wales is to adapt successfully, farmers will need to make changes to their current activities. They will need to adopt best practice in animal husbandry and welfare and move to more cost effective and environmentally-friendly production techniques as well as improving the management of their farms by gaining the skills to manage their farms as businesses. In addition, they will need to explore the options available for diversifying their activities and be prepared to work in a more co-operative manner. 208 9.5.6 As well as providing assistance in these areas, the adoption of this measure will assist in providing multiple sources of income for farming households and reduce dependency on a narrow and vulnerable economic base. Complementary Actions 9.5.7 Many of the problems facing farmers in terms of improving the profitability and long term viability of their businesses can be addressed through specific advice and training. The following actions will be supported under Article 9, but will assist in meeting the objectives of Article 4. ! Reducing production costs If farmers are to secure a viable long term future, they need to improve business efficiency and become more cost effective and efficient both in terms of livestock and land management and in the administration of their farms. Skills relating to the general administration of the farm business, such as book keeping, IT use and cash-flow management, will be provided through the strategy being developed by the Farm Development Strategy Group as set out in Chapter 9.2, (activities supported under Article 9 of Regulation 1257/1999). The development and improvement of cost effective and environmentally friendly livestock and land management practices, including on-farm advice, will be addressed using the network of demonstration farms (also set out in Chapter 9.2), and through the dissemination of best practice in a variety of ways e.g. word of mouth, articles in farming publications etc. The demonstration farms will also cover diversification options. ! Improving and re-deploying production In order to maximise their ability to access the quality and niche product markets, farmers need to modify their farming practices to meet market and consumer demands. The demonstration farms network advisers will include the examination of how the farmer is currently undertaking his business in order to provide him with advice on how to modify his activities to better enable him to target production to hit these key markets. The deployment aspects will primarily be dealt with under the training activities set out in Chapter 9.2. ! Increasing quality The Wales Agri-Food Strategy is targeted at moving the Welsh agri-food industry into the quality end of the market where Welsh products will attract a premium price and provide the maximum potential return for all in the industry, including farmers. To do this, it will be essential to improve the quality of Welsh products to the best possible standard and, although a considerable amount of work has already been undertaken into breed improvement (under the previous EAGGF Objective 5b scheme), we will build on this with further developmental work. The demonstration farms will be able to access research to address particular breed and animal health problems that are of key concern to Welsh farmers and disseminate that information to farmers. They will also undertake specific research work in relation to a specific project / investment provided sufficient numbers of farmers will benefit from it. 9.5.8 In addition, diversification into areas that are not of or towards agriculture will be supported under Article 33 (indent 7). Illustrative examples of the type of activity to be supported under that Article are set out in Section 9.11. 209 Actions proposed under Article 4 9.5.9 Three grant schemes will be introduced to address the needs identified in the following areas: ! Preserving and improving the natural environment, hygiene conditions and animal welfare standards; and Promoting the diversification of farm activities. ! 9.5.10 Each grant will include provision for a Business Planning Service, to be operated through the network of demonstration farms referred to above, which is designed to help farmers undertake a detailed analysis of their business needs in relation to capital investment. This assistance will only be available to those farmers who subsequently successfully apply for at least one of the grants to implement the recommendations arising from the analysis. If applicable the grant schemes will provide financial assistance for a maximum of 50% of the total cost of the Business Planning Service subject to a total grant of £1,000. The Farm Improvement Grant This will help farmers to adopt best practice, to make animal welfare, hygiene and product quality improvements and to enhance, protect and maintain the environment of the farm. There are three categories of eligible activities: ! Preserving and improving the natural environment This will apply to those farmers who, whilst unable to qualify for Tir Gofal, want to carry out conservation works of significant benefit to the environment. Such a scheme would have considerable benefit in those parts of Wales where the loss of habitat and biodiversity has been greatest but farming is too intensive to meet the Tir Gofal criteria. Examples of the type of activity it would cover are : ! ! ! ! hedge, traditional stone wall and bank renovation (inc. any necessary protective fencing); renovation of traditional buildings; amenity works to include tree planting, ponds, and streamside corridors. Pollution and Waste Management This will help farmers deal in an environmentally friendly and effective manner with pollution and waste management issues but would only apply in circumstances where the activities proposed would take the farm above the existing statutory requirements. Examples of the type of activity it would cover are: ! ! ! ! ! ! modernisation and re-siting of sheep dipping and handling facilities; slurry storage (including covers for tanks) and handling equipment; dirty water disposal, including low rate irrigation systems for dirty water; farmyard manure stores; machinery for the injection of slurry below the soil surface; silage effluent handling and control. 210 ! Animal welfare, stock and crop management In the last few years, increasing consumer demand for high quality, welfare and environmentally friendly products has meant that retailers and purchasers have demanded ever higher standards of animal welfare and on-farm practices. Whilst the majority of the improvements to animal welfare standards have come about as a result of statutory legislation, there are areas where retailers' demands exceed the legal requirement. In addition, the standards required in the non-livestock sectors are rising and increasingly farmers are required to store and handle crops in a manner which will preserve the quality of the crop and minimise the impact on the environment. These factors mean that in order for farmers to access this market, they have to make considerable additional investment on their farms. As with any investment, it is vital that farmers know exactly what they need to achieve, and what work they need to carry out, and so this type of assessment will be included under the Business Planning Service set out above. The result of the assessment will help farmers decide what capital work is required to ensure that retailers' required standards of animal health and welfare and environmental protection are achieved and the Farm Improvement Grant will be used to provide assistance in implementing the results of a review undertaken under the Business Planning Service in cases where farmers can demonstrate appropriate links to a specific retailer or purchaser. The Farm Enterprise Grant The current pressure on farm incomes and the associated problems of many rural areas have made it essential that consideration be given to ways of widening the employment base on and off farm for farmers and for farming family members. This grant will provide assistance for a range of activities directed at diversification of and towards agriculture such as those listed below (this is an illustrative list only) : ! ! ! ! new farm enterprises covering sectors/species not currently on the farm - including planting, harvesting, storage and marketing of energy crops (see below); livery for horses and ponies including riding schools; and erection of new buildings for a limited number of uses; setting up of farm shops, direct sales and pick-your-own. Biomass / Energy Crops Support for the development of Miscanthus (elephant grass) and other biomass crops will be provided under this grant scheme. It will not cover Short Rotation Coppice as this falls under the provisions of Article 31 - Forestry - and is covered in Section 9.10. Miscanthus is still in the very early stages of development with only experimental plots in the UK and no plantings in Wales. Miscanthus has, however, been grown successfully in the UK. Support under this grant scheme will: ! ! ! ! Provide opportunities for farmers to diversify sources of income; Encourage sustainable management of resources including energy conservation and avoiding pollution; Encourage the adoption of environmentally friendly farming systems; Assist in meeting the DTI targets to produce 10% of UK electricity from renewable sources. 211 It is also intended that the grant will provide support for the growing of Miscanthus or other energy crops as an alternative enterprise. The grant would cover: ! ! ! ! planting costs ( including ground preparation, weed control, rabbit fencing, planting material costs and first year cut back); purchase of machinery necessary for the planting or harvesting of the crop the development of on-farm storage facilities, for example the conversion of redundant farm buildings or provision of new facilities development of machinery to plant, harvest or utilise the crop. Funding for Miscanthus will be provided on an individual project basis rather than the provision of a national grant scheme. Complementary support will also be made available for the establishment of Energy Crop Grower and Service Groups including the design of appropriate financial and legal structures, information and guidance, training, education, market development, assistance with capital purchases and facilitation of access to appropriate financing packages. Where appropriate, e.g. training, this will be funded under the Plan but other funding sources will also be accessed. Funding for development to improve the quality of the crop, husbandry and harvesting techniques will also be provided. In addition to these specific areas, the scheme will also support groups of farmers who have established an organisation for the purpose of purchasing items that if purchased by an individual would be regarded as an investment, for example machinery or other agricultural supplies. The Small Food Processors Grant An important area for diversification is the development of on-farm added value processing of agricultural products. This grant will help farmers to start up new, and develop existing, small scale added value processing on their farms. Assistance will be provided for the construction of new buildings, the conversion of existing buildings (disused or otherwise) and the purchase of equipment specifically for added value processing. This grant will be complementary to the actions proposed under Articles 25 to 28 of EC Regulation 1257/1999 as it will be limited to projects costing less than £40,000 and will only be available to individuals with registered holdings. Eligibility 9.5.11 The farm enterprise and improvement grants are extremely important measures in addressing the current problems in Welsh agriculture. The Business Planning Service element will provide valuable guidance for farmers on how they can adapt their businesses to meet market demands and the grant schemes will provide pump priming financial support for the large number of farmers who are unable to access other grant schemes because their needs fall below the cost thresholds of other schemes. 212 9.5.12 To qualify for assistance under any of the three grant schemes farmers must: ! ! ! ! have viable farm businesses (as defined in Section 9.3); must comply with the minimum standards regarding the environment, hygiene and animal welfare(as defined in Section 9.2); must provide 45% of the total eligible cost from his / her own resources; and have project costs in excess of £1,500 - projects below this level would not be deemed to have a significant impact on the business. In addition, in order to be able to benefit from support under this measure, farmers will be required to demonstrate that they possess the necessary technical skills and competence to undertake the project or prove that they are actively acquiring such skills (for example, through training, recruitment of specialist staff etc.). 9.5.13 For the Farm Improvement Grant scheme, farmers must be able to demonstrate that their project exceeds the statutory requirements for that area and, where applicable, must have had either an environmental impact assessment undertaken or provide the results of a review undertaken under the Business Planning Service or be able to demonstrate the environmental benefits of their proposal through an alternative means e.g. a business plan completed by a suitably qualified individual / company. Where the project relates to livestock, crops etc., the farmer will be expected to indicate a market for the end product (e.g. construction of welfare friendly livestock housing could be linked to the production of veal calves for the market in welfare friendly veal or a commitment to join a producer group linked to one of the large multiple retailers). 9.5.14 For the Farm Enterprise Grant scheme, farmers will need to be able to demonstrate the economic viability of their project either through providing the results of a review undertaken under the Business Planning Service or an alternative as described in paragraph 9.5.13. In general, projects will be expected to become self-financing within 3 years (although there may be exceptions where changes can only realistically be achieved over a longer time scale) and any buildings or equipment that is the subject of a grant must remain in the use for which the grant was awarded for 10 years from the date of completion of the project. 9.5.15 For the Small Food Processors Grant scheme, farmers must be able to demonstrate the economic viability of their project, as described in paragraph 9.5.13 and, where appropriate, the applicant will be expected to demonstrate that markets exist for the products concerned. Aid Intensity 9.5.16 The maximum rate of grant aid will be 40% of total eligible costs or 50% in less favoured areas. For young farmers the maximum rates will be increased to 45% and 55% respectively. 213 Community contribution 9.5.17 The Community contribution under this measure will be 25% of public cost. For any revenue bearing investments the terms of Article 47(2) of Council Regulation 1257/1999 which refers to the rates in Article 29(4b) of Council Regulation 1260/1999 will be respected Investment Threshold 9.5.18 The Farm Improvement Grant and the Farm Enterprise Grant will be subject to a maximum total investment threshold of £150,000 (about 234,000 euro). 9.5.19 Where multiple applications are made, detailed consideration will be given to the content of each application, its relationship to the other applications (e.g. do they form a coherent development package) and value for money. In no circumstances would applicants be allowed to receive more than one grant at a time and they will be expected to successfully complete one project before being considered for further support. 9.5.20 Details of the exceptions being sought, as defined under Article 37 (3) of Regulation 1257/1999, are set out in Section 9.4. There are no ongoing contracts from the previous programming period. Indicators 9.5.21 Breakdown by the type of production and by type of investment of the following figures: ! ! ! ! ! ! ! Number of farmer beneficiaries; Number young farmer (i.e. under 40 years) beneficiaries; Number of green initiatives grant aided; Total amount of eligible investments grant aided; Total amount of public expenditure ( of which % EAGGF); Total number of farm appraisals undertaken; Number of welfare friendly initiatives funded. Biomass ! Area of energy crops planted on agricultural land; ! Dry mass produced per year ( yield - tonnes per hectare); ! Area of land planted with energy crops; ! Added income derived from the sale of biomass; ! Multiplier effect e.g. environmental benefits, tourism, recreation et al.; ! Jobs created; ! Volume of electricity generated; ! Reduction in Welsh carbon budget. 214 9.6 TRAINING - FARMING ADAPTATION 9.6.1. Activities supported under this measure are covered by Article 9 of Regulation 1257/1999 which allows for support to be given for vocational training to contribute to the improvement of occupational skills and competence of farmers and other persons involved in agricultural and forestry activities, and their conversion. 9.6.2. Training shall in particular be designed: ! to prepare farmers for qualitative reorientation of production, the application of production practices compatible with the maintenance and enhancement of the landscape, the protection of the environment, hygiene standards and animal welfare and acquisition of the skills needed to enable them to manage an economically viable farm; and to prepare forestry holders and other persons involved in forestry activities for the application of forest management practices to improve the economic, ecological and social functions of forests. ! Introduction 9.6.3 The bed rock of the development of the supply chain must be the increasing quality and costefficiency of production of Welsh farms. The skills relating to analysing costs and setting out business targets are not available to many Welsh livestock farmers, in particular, but their acquisition is now essential. In addition, there is substantial scope to improve quality and cut cost by adopting best practice. If farming in Wales is to adopt successfully, farmers will need to adapt best practice and environmentally friendly production techniques; to gain the skills necessary to manage their farm businesses effectively; to diversify; and to take informed decisions about their future and those of their families. 9.6.3 This measure will address the following issues as identified in the SWOT in Section 5.1: ! ! ! ! ! ! ! ! ! ! ! ! provide opportunities for business growth; provide increased income and employment opportunities; reduce dependence on narrow and vulnerable economic base; provide opportunities for diversifying sources of farm household income both on and off farm; broaden the skills base of the rural population; encourage sustainable management of resources including energy conservation and avoiding pollution; improve animal welfare and product quality; improve biodiversity; encourage the adoption of environmentally friendly systems of production; provide opportunities for maintaining small family farms; provide greater opportunities for entrepreneurs especially in other sectors including the service industries such as tourism, and manufacturing; and provide new opportunities linked to the natural environment. 215 Barriers to Training 9.6.4 Some training is still seen as patronising and largely irrelevant to the needs of individual farming businesses. 9.6.5 There is also a degree of frustration with the 'top down' concept of training, presented in formal training sessions by academic experts with insufficient personal experience of small rural business management. 9.6.6 Attending training courses is time consuming, particularly where businesses have labour resource issues to consider. Affording time to attend courses or alternatively providing cover where resources are already constrained is a major barrier. Delivery Mechanisms for Future Training 9.6.7 An integrated approach will be required for training in the future with clear quality standards being applied through an umbrella organisation such as LANTRA, which is a UK National Training Organisation responsible for overseeing and monitoring training programmes in the agriculture and forestry sectors. To ensure that this happens, the Assembly has set up the Farm Development Strategy Group and given it the remit to develop plans for a coherent, Wales-wide strategy for training for farmers and their families to help them adapt. The Group will work with bodies such as LANTRA, the WDA and other training providers to ensure that farmers and their families are made aware of what training is available and can easily access it. 9.6.8 This approach will need to be based on, and communicate to the industry, the new vision for Welsh farming: focused on what customers want, with the emphasis on quality products; environmentally sensitive, with extensive or organic production, reinforcing the quality image; and part of a more diverse and sustainable rural economy and society. 9.6.9 There will be a focus on more bottom up delivery of programmes through local providers. These may work with groups of farmers, for example through producer groups such as existing grassland societies. 9.6.10 Demonstration farms and centres of excellence based on existing businesses may be utilised for the purposes of formal development sessions. Training Quality 9.6.11 Courses operated through mechanisms such as Objective 5b have tended to be quantity rather than quality driven i.e. the measurable targets have related to the number of participants and the number of courses run, rather than building life skills focusing on quality. It is proposed that in future training will be linked to verified quality standards where possible, building a structured programme of life skills through continual professional development. 216 9.6.12 Farmers will take part in a training needs assessment as part of a life skills programme. By ensuring that quality training is recognised though a qualification, farmers will gain skills commonly recognised within the market place. 9.6.13 By undertaking the training needs assessments local training providers will also be more informed of the demand, type and level of training required at a grass roots level. 9.6.14 Qualifications are gained currently through the following mechanisms: ! ! ! ! National Traineeships - these involve working and having a structured training programme which leads to a recognised qualification (NVQ). Modern Apprenticeships - these are the same as National Traineeships but requiring employed status, 3 GCSE passes at grade C or above or progression from a National Traineeship. Minimum outcome NVQ level 3. Full-time and part time courses - GNVQ, NVQ National Diplomas, higher national diplomas, degrees and higher degrees. There are currently two forms of courses to cover business training: ! The Achieving Series; ! The Business Series. Technical Skills Training National Vocational Qualifications 9.6.15 Future training programmes will build on and develop existing provisions. They should where possible carry a recognised quality standard such as General National Vocational Qualification (GNVQ) or National Vocational Qualification (NVQ), although it is recognised that the current range of qualifications may not be flexible enough or appropriate to apply to some of the training packages. Industry benchmarks will be developed to enable recognised competency standards to be achieved. 9.6.16 The Actions indicated below will be supported under this measure. The categories indicated comprise training areas which are intended to be the basis of future training packages:- Agriculture Training will be designed to encourage qualitative reorientation of production, the application of production practices compatible with the maintenance and enhancement of the landscape, the protection of the environment, hygiene standards and animal welfare and acquisition of skills needed to enable those completing the training to manage an economically viable farm. 217 Preparation for qualitative reorientation of production Preparation for the application of production practices compatible with the maintenance and enhancement of the landscape, the protection of the environment, hygiene standards and animal welfare, in particular: ! ! ! ! ! ! ! ! ! ! ! ! ! grassland management; organic and environmental modes of production; ways of combining timber production and grazing livestock; health and safety including risk assessment and first aid courses; manual handling; technical training to cover crops and cultivation etc.; estate maintenance e.g. chainsaw, welding; equipment maintenance; livestock husbandry - beef, dairy, sheep, pigs and poultry; pollution waste management (to include the code of good agricultural practice, safe disposal of sheep dip and protection of water courses); pesticides - safe use and different application levels; vehicle handling e.g. atvs tractor, telescopic handlers, fork lift trucks; pest control. Animal Welfare Development of farmers' skills to include such items as knowledge of how to deal properly with the welfare of their animals in accordance with the legislation and codes of practice as laid down under the 1968 Agriculture Miscellaneous Provisions Act. Such skills would include: ! ! ! ! ! ! hoof trimming; preparation of stock for market; housing - cattle, sheep, pigs, poultry; lambing; poultry - rearing and egg production; veterinary and medicine. 218 Acquisition of skills needed to manage an economically viable farm. Courses will be aimed at meeting new challenges in agriculture which may be imposed through legislation, standards or competitive pressure: ! ! ! ! ! ! ! ! ! Business management skills including IT and administration to enable farmers to manage their businesses effectively, taking advice and guidance on best livestock business management practices issued by the MLC and others; Compliance with legislation to improve returns; business succession planning - retirement options for family members; Accounting - gross margins, management and investment income, net farm income, profit and loss, partial budgeting, financial ratios, finance; Computer skills - spreadsheets, programmes; PAYE and National Insurance; Taxation; Legislation - Tenancy, Agenda 2000; Package for new entrants to farming. Environment The programme of participant training available under Tir Gofal aims to: ! ! ! give new entrants to the Scheme an understanding of the concept of managing an agricultural holding in an environmentally sensitive manner through participation in an agri-environment scheme; supply agreement holders with knowledge of how to manage specific features and habitats using the Tir Gofal prescriptions; supply agreement holders with practical skills so they can fully deliver the undertakings entered into. The programme consists of the following main components: ! Induction Training Objective - to give new entrants to the Scheme an understanding of the concept of managing an agricultural holding in an environmentally sensitive manner through participation in an agrienvironment scheme; This is designed to achieve the initial objective by providing an opportunity for all agreement holders and their staff to visit (within 12 months of entering the scheme) a "mentor farm". Such farms comprise holdings which are achieving a high standard of environmental management integrated into a viable farming business (or well managed small holding) as part of their participation in one or more of the predecessor agri-environment schemes such as ESA, Tir Cymen, Habitat Scheme or Hedgerow Renovation Scheme. In due course, the list of mentor farms will include Tir Gofal participants. This approach develops participants' understanding of the concepts behind Tir Gofal and provides an opportunity to view at first hand the standards of work that are expected. Delivery of the training is overseen by the Countryside Council for Wales' External Training Officer. This element is free of charge to participants. 219 ! Agri-Environment Management Training Objective - to supply agreement holders with knowledge of how to manage specific features and habitats to achieve a desired outcome using the Tir Gofal prescriptions This is designed to achieve the secondary objective by providing an opportunity for all agreement holders and their staff to attend course on the management of the specific features, priority habitats and optional elements included in their Tir Gofal agreement. This part of the training programme is free of charge to participants. ! Practical Skills Training This is designed to achieve the third objective by providing an opportunity for participants (or farm workers and contractors involved in work on Tir Gofal agreements) to gain the necessary practical skills required to implement an agreement successfully. Half of the costs of this element are met from the Tir Gofal Participants Training budget, with the balance contributed by trainees. Conditions Trainee Eligibility - agreement holders (and others with a role in managing agreements) are eligible for all three elements of the package. Farm workers and contractors are eligible for Agri-Environment Management and Practical Skills Training. Training Providers - the Induction Training programme is organised and delivered by the Countryside Council for Wales in association with host farmers. The Agri- Environmental Management and Practical Skills components is contracted out (on a competitive tender basis) to organisations or individuals with a nationally recognised training accreditation . Course Eligibility - courses must be directly relevant to Tir Gofal and the structure, content, standards and trainee to tutor ratio will be approved by the Countryside Council for Wales. All prospective training providers must submit detailed proposals, including course objectives, programmes, supporting literature, training methods in advance of any approvals being granted. Non Compliance with Tir Gofal Obligations - agreement holders who have benefited from Tir Gofal training, and who are subsequently penalised for non-compliance with the agreement's prescriptions, may be liable to reimburse the Countryside Council for Wales for all or part of the training costs. Quality Control of Training Providers This is undertaken by an analysis of the course evaluation forms completed by all participants and by spot checks by CCW staff on 10% of courses 220 Financial Controls Checks that all costs are eligible for inclusion in tender documents e.g. accommodation, meals, promotion / publicity, instructors etc.; Dual Funding issues - assurances are sought from training providers that no other public funds are used for the development or delivery of a course. Such assurances are subject to verification checks; Accounts - training providers may be asked to make financial accounts available for inspection by the Countryside Council for Wales at any time. Such inspections are designed to ensure that value for money is being achieved. Minimising Duplication of Existing Provision Induction Training - other than under Tir Gofal, there is no provision for this type of training available in Wales. Agri-Environmental Management Training - Habitat and environmental features training which is tailored to the needs of participants in an agri-environment scheme is not a common feature of training programmes in Wales. Where available, it generally covers a very limited range of habitats and features within restricted geographical areas. Additional provision of this element is required as part of the Tir Gofal training package to ensure adequate all-Wales coverage of the full range of subject matter. The content of existing courses is checked to avoid any unnecessary duplication. Practical Skills Training - courses to deliver practical skills are widely available throughout Wales. In the first instance those requiring such training would be referred to existing providers. However, it is anticipated that Tir Gofal will create a demand for practical skills training over and above that which can be currently supplied, and this element of the programme is available to satisfy additional demand created by the new scheme. Costs of Attendance Whilst it is appreciated that training participants give of their time to attend courses, (and may well incur expenditure in respect of the employment of labour to cover for absence) the time /costs incurred will not be eligible for any payment as part of Tir Gofal. Costs of Delivering the Programme A summary of the proposed annual expenditure in sterling on training activities is shown below: Induction Training Habitat Management Training Practical Skills Training Total 7,680 21,375 10,800 39,855 221 Systematic Identification of Training Needs Because of the difficulties involved in estimating the likely demand for each element of the Scheme, a 'Training Needs Assessment' is undertaken each year once details of that years intake becomes available. Such assessments enable Countryside Council for Wales to identify the need for specific courses in geographical locations, and amend course content to take account of regional requirements if necessary. The Training Needs Assessment is undertaken by Project Officers. Farmers are guided in the completion of a proforma at the time of final negotiations. Data from the proformas is collated centrally by the Countryside Council for Wales. The list of courses put out to tender will also be organised centrally. Training Providers For the purposes of Induction Training, delivered via 'mentor' farms, the host farmer is regarded as a training provider and reimbursed accordingly. Training providers for Agri-Environmental Management and Practical Skills elements constitute universities and colleges, LANTRA, and any other commercial individual or organisation with the necessary abilities and accreditation to deliver the required instruction. Project Officers and other Countryside Council for Wales staff are involved in the administration, setting up, delivery, quality control and monitoring of Farmer Training, but this resource input has not been included in the request for co-financing Publicity and Links Between Trainees and Training Providers In order to preserve confidentiality, the Countryside Council for Wales will acts as the link between training providers and individual agreement holders. General promotion and publicising of courses is undertaken by training providers. Project Officers have an important role in promoting the value of training to agreement holders and other eligible parties so as to ensure the programme delivers maximum benefit. Prioritisation In the event that the demand for Tir Gofal training is higher than the budget will allow, a system of prioritising the need for particular courses will be implemented so as to maximise the agrienvironmental benefits. In the event that the situation persists, the training budget will be reviewed Monitoring The effectiveness of the Farmer Training will be assessed through implementation of a programme of monitoring. 222 New Enterprises In order to maximise their ability to access the quality and niche product markets, farmers need to modify their farming practices to meet market and consumer demands. This may be achieved by establishing alternative farm enterprises. Skills may need to be adapted, upgraded or gained in a new specialism such as: ! ! ! ! ! horticulture; aquaculture; alternative crops; livestock; new technologies. Organic Farming Training provided will cover all aspects as discussed in the specific proposals which relate to organic farming and processing. Provision will include planning for conversion courses, specialist courses, distance learning packages, training for general advisors, administration and other specialists, training for students, training for organic farming specialists and group activities. Further details are included within Section 9.8. To help take this forward the Assembly has established an Organic Centre of Excellence based at the Welsh Institute of Rural Studies. The Centre will be run by a consortium comprising the Institute, ADAS Consulting Ltd, the Institute of Grassland and Environmental Research, the Soil Association and the Elm Farm Research Centre. Its remit will include identifying training demands and training provision within the industry, providing technical advice, encouraging and initiating organic farming research and development in Wales, and supporting a network of demonstration farms. Diversification There are a broad range of skills necessary to embark on any new venture with success. Such skills will include legislative requirements, marketing awareness, best practice and, in some cases, industry recognisable qualifications. Within this section there are a number of areas in which farmers may chose to diversify, some of which include: ! ! ! tourism and visitor support; care in the community; leisure e.g. 4x4 driving and mountain biking. Food production Provisions will relate to processing, new product development food science, food production and quality systems (HACCPS), packaging and market development, selling to the public, basic food hygiene and dairy hygiene. In order to make full use of existing provision, the WDA Food Directorate will co-ordinate training in this area. As part of their overall delivery of the Agri-Food Action Plans, they will assess training needs and link individuals / companies with the relevant training provider(s) and course(s). They will work in conjunction with the Farm Development Strategy Group, the Agri-Food Partnership and the Organic Strategy Group. 223 Marketing The key requirement to help farmers to understand market requirements in terms of carcass quality and conformation, the need for traceability (including the potential tagging of sheep at the point of sale), etc. The Farm Development Strategy Group will co-ordinate activity in this area. Forestry Actions will be centred on the application of forest management practices to improve the economic, ecological or social functions of forests. Raising and maintaining woodland and forestry skills are an essential and integral part of a sustainable woodland industry. A range of courses are available, either full or part-time, from the University of Wales and Welsh based colleges of Further Education. These courses are complemented by those offered by other training providers such as LANTRA and the National Trust. Forestry and wood related training and skill development can be broken down into the following main areas: Establishment ! ! ! ! ! ! ! ! ! ! ! planning and designing a new woodland; plant care and plant handling; woodlands and water; forest drainage; methods of woodland establishment; all terrain vehicles; all terrain cycles; clearing saws; mechanical and hand weeding; fencing; use of pesticides. Management ! ! ! ! ! ! ! ! care and maintenance of young woodlands; tree identification; managing woodlands; access to woodlands; thinning of (broadleaf and conifer) woodlands; an introduction to timber measurement; management of deer and grey squirrel; using a chainsaw. 224 Harvesting ! ! ! ! ! ! tree measurement (tarrifing); chainsaws; harvester/processor; extraction of timber (including the use of such machinery as skidder, grapple skidder, forwarder, skyline); recovery & debogging; pollution control. Other ! ! ! ! ! ! ! health and safety in the woodland; risk assessment; manual handling; working from ladders; tree climbing; working at heights; trailer towing. Adding Value ! ! ! ! operating a mobile saw; using static saws; how to store timber; the art of kiln drying. Coupled with these courses are more general courses relating to the wide suite of management and business skills required by SMEs and their staff. Biomass Provision will be made for the delivery of appropriate training and advisory packages to farmers and foresters, covering the production of Short Rotation Coppice and other crops as appropriate as well as harvesting of forest residues. Eligibility 9.6.17 To be eligible for support farmers and their families must: ! ! ! ! have or be connected to viable farm businesses (as defined in Section 9.3); the farm business must comply with the minimum standards regarding the environment, hygiene and animal welfare (as defined in Section 9.2); the individual applying must possess adequate general occupational skills and competence; and the individual applying must have had a skills assessment completed. 225 9.6.18 There would need to be clear links between the training course(s) applied for and the outcome of the skills assessment and, in those cases where a Farm Business Review has been completed, we would expect the results of that Review to identify the training requirements. 9.6.19 Actions supported will include all activities that will help address the skills deficit of farmers and their families and improve the long term viability of the individual businesses and the agriculture and forestry industries as a whole. Beneficiaries 9.6.20 The beneficiaries will be farmers and/or members of their families, farm workers, forest holders and forestry workers. Financial assistance will be provided to the individual applying and not the organisation that will provide the training in order to ensure that no normal education systems or programmes are financed. Aid Intensity 9.6.21 The maximum rate of grant aid will be 50 % of total eligible costs. Community contribution 9.6.22 The Community contribution will be 50% of public cost. Exceptions 9.6.23 No exceptions, as defined under Article 37 (3) of Regulation 1257/1999, are being sought. Ongoing Contracts 9.6.24 There are no ongoing contracts from the previous programming period. Indicative Training Programmes - pre 1999 9.6.25 Details of courses funded under the Objective 5b Programme are set out at Appendix 7. Other courses run by the UK National Training Organisation, LANTRA, are at Appendix 13. The courses funded under the Objective 5b Programme will be closed with Objective 5b money and there are no ongoing contracts. 226 Indicators 9.6.26 Quantitative Indicators ! ! ! ! ! ! number of training actions number of participants average number of training days received per participant total amount of costs borne by beneficiaries total amount of eligible costs total public expenditure (including EAGGF contribution) 9.6.27 Qualitative Indicators Standards will be specified for the effectiveness of training services provided. Training will also be assessed against these standards. 227 9.7 LESS FAVOURED AREAS AND AREAS WITH ENVIRONMENTAL RESTRICTIONS 9.7.1. Articles 13 to 21 of Council Regulation 1257/1999 allow for support for less favoured areas and areas with environmental restrictions. Support will contribute to the following objectives: ! Ensuring continued agricultural land use and therefore contributing to the maintenance of a viable rural community; Maintaining the countryside; Maintaining and promoting sustainable farming systems which protect the environment; Ensuring environmental requirements and safeguard farming in areas with environmental restrictions; Encouraging farmers to apply good farming practices compatible with the need to safeguard the environment and maintain the countryside by sustainable farming. ! ! ! ! Background 9.7.2. Since the 1970s the Hill Livestock Compensatory Allowances (HLCA) Scheme has provided the mechanism by which Wales has channelled specific support to livestock farmers within the Less Favoured Areas (LFA). 9.7.3. Farming in the LFA has higher costs of production (see Section 5.1). These costs are associated with altitude, shorter growing seasons and longer winters accompanied by higher feed and waste management costs, topographical difficulties and remoteness from markets. 9.7.4. Map 1 in Section 5.1 illustrates the current extent of the LFA designation. Wales is extremely dependent on this designation, with over 77% of the agricultural land in Wales included. 9.7.5. Apart from the key role that farming in the LFA performs in food production associated with lamb, beef and to a lesser extent milk, the LFAs play a vital role in terms of landscape value and habitat provision supporting a wide range of flora and fauna. 9.7.6. Additionally outward migration from rural areas is of growing concern (see Section 5.1, which indicates the level of outward migration from rural areas) and the farming community has a key role in sustaining the rural population (see Appendix 14 "Less Favoured Areas and their Role in Maintaining Viable Rural Communities and the Wider Countryside") and contributing to the linguistic and cultural heritage of Wales. It is reasonable to assume that the farming community within the LFAs is larger than it would otherwise have been without LFA designation; the Welsh Institute of Rural Studies evaluation of the effectiveness of the HLCA scheme (summarised in Section 5.2 and included at Appendix 4) provides compelling evidence for this assumption. 9.7.7. There is a need to ensure that livestock production continues in the LFA and that a more balanced enterprise mix prevails, in order to reduce dependency on a sheep monoculture and increase numbers of cattle within such areas. This will achieve two objectives: it will provide benefits in terms of habitat 228 management and will also decrease risks associated with over specialisation within a commodity sector. Grazing livestock in the hills has a role to play in terms of landscape characteristics and biodiversity. 9.7.8. The role of the farming community in providing environmental goods and services is becoming increasingly important. There is therefore a need to recognise, develop and enhance the role that farmers are undertaking in this area. The proposed scheme will ensure that the key environmental opportunities which are associated with sustainable farming practices can be grasped while continuing to provide farmers with the necessary payments for farming in areas with severe disadvantages. 9.7.9. The adoption of this measure will achieve the following objectives as identified in the SWOT in Section 5.1: ! ! ! ! ! ! ! Provide assistance to those farmers with higher cost of production; Provide opportunities to improve product quality; Encourage greater biodiversity; Encourage the adoption of environmentally friendly systems of production; Encourage more sustainable management of resources; Contribute to sustaining the rural population; Contribute to sustaining the Welsh language, landscape and culture. Year 2000 - Hill Livestock Compensatory Allowance Scheme 9.7.10 The National Assembly for Wales has taken the opportunity under the Transitional Regulation to continue the existing Hill Livestock Compensatory Allowances Scheme for the year 2000. Details are as follows. 9.7.11 Community co-financing of public expenditure costs will be at 25%. Payments (in accordance with Article 7 of Commission Regulation (EC) No. 2603/1999) will be calculated on eligible breeding cattle and breeding sheep forming part of a regular breeding herd or breeding flock maintained in the Welsh LFAs. Payments are being made at the following rates (the same as in 1999): In Severely Disadvantaged Areas: £73.39 per eligible breeding cow. £8.88 per eligible ewe of approved breeds in specially qualified flocks. £4.64 per other qualified ewe. Payment restricted to £102.75 per hectare of eligible land available to the claimant. £36.69 per eligible breeding cow. £4.09 per breeding ewe. Payment restricted to £60.85 per hectare of eligible land available to the claimant. In Disadvantaged Areas: 229 Eligibility conditions 9.7.12 In accordance with Article 14(2), farmers must undertake to farm in the Less Favoured Areas for five years from the first payment of a compensatory allowance, including those paid under Council Regulation 950/1997 and its predecessor. 9.7.13 Producers must also adhere to the requirements of Article 14(3) of Council Regulation 1257/1999 on the non-use of prohibited substances. 9.7.14 Eligible land is that which lies within the Welsh Less Favoured Areas and which meets the definition of forage area for the purposes of the IACS area aid application (as governed by Commission Regulation 3887/1992). 9.7.15 Payments will only be made to producers who maintain extensively grazed beef herds and/or sheep flocks on their eligible land for a specified period of retention. In the case of claimed cattle, the animals must have been retained for a period of three months starting the day after the claim was received. In the case of claimed sheep, the animals must be retained during the period 5 February to 14 May 2000. 9.7.16 A maximum stocking rate of 1.4 LU/ha applies, with subsidiary limits relating to ewes set at a maximum of 6 ewes (0.9 LU)/ha in the Severely Disadvantaged Areas (SDAs) and 9 ewes (1.35 LU)/ha in the Disadvantaged Areas (DAs). No payment is made on stock carried above these levels. 9.7.17 Producers must meet the requirements of good farming practice, details of which have been provided in Section 9.1, in order to be eligible to receive payment. 9.7.18 Requirements favouring the environment or promoting sustainable agriculture which are applied to cattle or sheep subsidy schemes under Council Regulation 1259/1999 will apply to compensatory allowances. 5-year commitment to farm 9.7.19 Compensatory allowances were first paid in Wales in 1976. Typically, approximately 13,000 payments are made each year. With the exception of those producers who will no longer meet the increased minimum area criteria (6 hectares of forage land) for the new scheme known as Tir Mynydd, recipients of payments will be eligible for payment under Article 14. The majority of producers who first received payment after 1995 will therefore be able to carry forward their 5 year commitment to farm in the Less Favoured Areas. Producers who are excluded from payment because they no longer meet the increased minimum area criteria from 2001 and who have not yet fulfilled their 5 year commitment will be released from that commitment. Level of aid amount and administrative procedures 9.7.20 As the payment arrangements are primarily the same as under the 1994-1999 programming period, the level of aid is to be unchanged from that provided in the final year of that period. 230 9.7.21 Administrative arrangements will follow the IACS model and general rules on payment accreditation. Claims have been made separately for eligible sheep and cattle: claims for sheep are combined with those for the Sheep Annual Premium Scheme; claims for cattle are made individually. All claims will have been administratively checked and loaded onto an automated system. The claimant information will have been checked with existing vendor details and with IACS to determine if a valid Area Aid Application exists and that this contains LFA land. In respect of cattle claims, ear tag numbers will have been automatically checked for duplicates with other claims for LFA compensatory allowances and for subsidies under the main beef regimes. In addition, 10% of sheep and cattle claims respectively have been selected for inspection. Approximately 7% will have been selected by risk assessment and 3% by random selection. The inspections will be carried out within retention. Further management checks will also be carried out in line with established procedures. 9.7.22 Any breach of the terms of Article 14(3) of Council Regulation 1257/1999 detected as part of the veterinary inspection regime will be notified to those responsible for overseeing Less Favoured Areas compensatory allowances so that the relevant penalties can be implemented. 9.7.23 Penalties for the over-declaration of animal numbers will be applied in line with Article 10 of Commission Regulation 3887/92. Any breaches of other scheme requirements may result in recovery of all or part of the payment made. A penalty system is applied. Serious offences, such as preventing an inspecting officer from carrying out his duties, will be punishable under national law. A report of the operation of the inspection regime and of any penalties applied will be submitted to the Commission. Definition of the minimum surface 9.7.24 To be eligible for payment, a claimant must farm at least 3 hectares of eligible forage land in the Welsh LFA. Tir Mynydd: A New Scheme For Compensatory Allowances For Less Favoured Areas In Wales 2001-06 9.7.25 The scheme consists of two elements: Element 1 9.7.26 This will be a payment per hectare, with two rates of payment: one for land in the Disadvantaged Area (DA) and one for land in the Severely Disadvantaged Area (SDA). The differential between DA and SDA payments per hectare will be calculated in such a way that it would replicate the differential that exists under the existing HLCA scheme. The eligible hectarage will be the applicant's forage area in the LFA as declared on the IACS database, excluding land grazed by dairy cows, which will be deducted by taking the total available milk quota figure (owned and leased) held by the Intervention Board for a farm as at 31st March, converting it to an equivalent number of dairy cows, and thence into forage area. 9.7.27 The scheme will only be open to farmers with "significant holdings", defined as a holding of 6 hectares or more. 231 9.7.28 The change to an area-based system of payments which is required under Regulation 1257/1999 will have a very significant impact on the distribution of compensatory allowances, with a very large number of eligible farmers either losing a significant proportion of their current levels of payment, or gaining significant additional income. In order to minimise the risk of over-compensation (as envisaged in Article 15(1) of the Regulation) an area based taper (described in paragraph 9.7.51) will apply to reduce payments in respect of very large holdings. 9.7.29 However, this adjustment will not deal with the problem of those farmers who will lose a significant proportion of the allowances hitherto paid to them. A mechanism will therefore be introduced which will, for a limited period, limit the potential scale of losses, as follows: ! in 2001 the minimum sum payable to a farmer will (assuming no changes in forage area or any other relevant factor ) be his entitlement as calculated in accordance with paragraph 9.7.26 together with any sum necessary to bring the total to 90 per cent of the sum payable in 2000; in 2002 the minimum sum payable (on the same assumptions) will be his entitlement as calculated in accordance with paragraph 9.7.26 together with any sum necessary to bring the total to 80 per cent of the sum payable in 2000; in 2003 the minimum sum payable (on the same assumptions) will be his entitlement as calculated in accordance with paragraph 9.7.26 together with 50 per cent of the difference between that entitlement and the sum payable in 2000 (where that sum is greater than his entitlement as calculated in accordance with paragraph 9.7.26). ! ! 9.7.30 From 2004 this 'safety net' will no longer be in existence and payments for Element 1 will be calculated purely on eligible forage area using the rates set out below (in paragraph 9.7.53). Element 2 9.7.31 Element 2 comprises a range of indicators of sustainable farming, which will allow farmers to obtain top-ups to their payments. These do not overlap with the Tir Gofal agri-environment scheme, but instead reward good, mixed farming practice and animal husbandry, and reflect the objective in the Regulation that compensatory allowances should help to maintain and promote sustainable farming systems. If a farmer scores one bonus point, the payment he/she is due to receive under Element 1 will be increased by up to 10%. If he/she scores two points or more, the payment would be increased by up to 20%. 9.7.32 One point will be awarded for each of the following: ! A. the farm has mixed cattle and sheep production, i.e. at least one bovine livestock unit to 30 ewes in the LFA. Cattle graze differently from sheep: they are less selective and will graze the more unpalatable species. Cattle and sheep therefore complement each other. Cattle also trample vegetation (e.g. bracken); their dung is beneficial to the land, and encourages insects and therefore birds. The definition of cattle would be determined by reference to Suckler Cow Premium claims and milk quota held. This means that both beef and dairy breeding cows will be covered. The FRCA estimates that some 46% of existing HLCA claimants would qualify on this basis. 232 ! B. the farm is an organic livestock farm registered with UKROFs, which has completed conversion. Currently very few LFA farms (less than 1%) are organic, but current levels of interest indicate that the percentage is set to increase (1% in 2001 and 3% in 2003). Organic farming promotes high standards of animal welfare, and encourages mixed farming practice. C. the farm has at least a minimum proportion (2%, but with a minimum of one hectare) of its land within the LFA for arable cropping, root crops and/or field horticultural crops (excluding maize and grass ley). Under-sowing these crops with grass will be permitted. Cropping benefits farmland birds and small mammals. Further consideration will have to be given to whether Tir Gofal agri-environment participants would have to be excluded from this element, or not. Currently, a low proportion (less than 1%) of LFA farmers would meet this criterion, but a higher proportion (10 - 20%) could do so with little difficulty. Root crops in particular are a practical and viable proposition. Land on which Arable Aid was being claimed would not be eligible. D. the farm has a stocking rate at or below 1.2 livestock units per hectare. This would provide an incentive for farmers in the LFA to reduce their stocking levels. Data will be drawn from Sheep Annual Premium Scheme and Suckler Cow claims. E. the farm makes a commitment to remove all stock from common land for 3 months, within the period September - February inclusive. This would provide an incentive for farmers to remove stock from common land during the parts of the year when the vegetation is particularly sensitive to grazing pressure. The system would accommodate the variety of local practice, by allowing the graziers to select which 3 of the months between September and February the commitment should apply to. Qualification would depend on all active graziers on a common reaching similar agreements. This would make this criterion much harder to achieve than if it were simply dependent on an individual grazier making the commitment, but there is a real danger that a system based merely on individual commitments by graziers would see some increasing their stock on unenclosed land, to take unfair advantage of the reduced stocking by their neighbours. F. the farm has an area equivalent to at least 2% of the eligible IACS LFA forage area, with a minimum of one hectare, as woodland, to which access for grazing is managed (i.e. the area must be fenced, although cattle and sheep may be allowed in for part of the year for shelter). Woodland is valuable for shelter in the LFA, but unless access is managed, grazing pressure can threaten the future of the woodland. The majority of Welsh deciduous woodlands are suffering from neglect. FRCA estimate that 10 % of LFA livestock farms would be able to benefit from this criterion. Land attracting other CAP support (i.e. Farm Woodland Premium Scheme) would not be eligible. G. the farm has membership of an approved farm assurance scheme. This is intended to reward good farming practice and animal husbandry. This criterion will depend on UKAS accreditation being achieved by the end of the year. ! ! ! ! ! 233 9.7.33 The range of criteria under Element 2 means that the great majority of farmers should be able to aim realistically at achieving at least one point. The system is designed to reward and encourage realistic steps towards more sustainable agricultural practice. The proposals for how the budget would be shared out, set out below, would ensure that if few farmers achieved points, the money would be recycled to them through Element 1. This provides a further safeguard that the system will not work to the disadvantage of farmers. Administrative procedures and controls 9.7.34 The application for Tir Mynydd (the reformed LFA scheme) has been incorporated into the annual IACS declaration of forage land. IACS administrative, inspection and control requirements will contribute to ensuring the accuracy of declarations of eligible Less Favoured Area land and land under arable or woodland cover not receiving other CAP support. Further details will be collected from producers regarding other Element 2 indicators: membership of a farm assurance scheme; registration as an organic producer; and removing animals from common land. 9.7.35 For 2001-2003, declarations of animals maintained will be derived from claims for Suckler Cow Premium and Sheep Annual Premium and, in regard to Element 1, and one of the environmental indicators under Element 2, from the national register of milk quota. The administrative, inspection and control requirements for each of these schemes/regimes will contribute to ensuring the accuracy of stocking levels and animal numbers used to calculate the Element 2 environmental indicators. 9.7.36 Automated and/or manual checks will be carried out to ensure that the following basic eligibility criteria have been met: ! ! ! that producers have not less than 6 ha of eligible forage land; that they farm either suckler cows and/or breeding ewes; and that they are eligible for payment enhancements. 9.7.37 In addition to the above controls, claims for Tir Mynydd will be liable to on-farm checks in accordance with Commission guidelines for an integrated Rural Development inspection regime. The inspections will ensure in relation to LFA support that producers are meeting all relevant commitments for receipt of the aid. The scheme will also be subject to the control procedures set out in Section 12 9.7.38 Any breach of the terms of Article 14(3) detected as part of the National Assembly's veterinary inspection regime will be notified to those responsible for overseeing Tir Mynydd so that the relevant penalties can be implemented. 9.7.39 Penalties for the over-declaration of land areas will be applied in line with Article 9 of Commission Regulation 3887/92. Any breaches of other scheme requirements may result in recovery of all or part of the payment made. A penalty system will be applied. Serious offences, such as preventing an inspecting officer from carrying out his duties, will be punishable under national law. A report of the operation of the inspection regime and of any penalties applied will be submitted to the Commission annually. 234 Eligibility conditions 9.7.40 In accordance with Article 14(2) of Council Regulation 1257/1999, farmers must undertake to farm in the Less Favoured Areas for five years from the first payment of a compensatory allowance, including those paid under Council Regulation 950/1997 and its predecessor. Producers must also adhere to the requirements of Article 14(3) of Council Regulation 1257/1999 on the non-use of prohibited substances. 9.7.41 Eligible land is that which lies within the Less Favoured Areas in Wales and which meets the definition of forage area for the purposes of the IACS area aid application (as governed by Commission Regulation (EEC) No. 3887/1992). 9.7.42 Payments will only be made to producers who maintain extensively grazed beef breeding herds or sheep breeding flocks on their eligible land. The continuation of extensive suckler-cow beef and sheep breeding is crucial to maintaining the environment and social fabric of the LFA, in support of the objectives set out in Article 13(a) of Regulation 1257/1999. It is traditional and extensive sheep and beef grazing that has largely moulded the environment, biodiversity and landscape of the Welsh LFAs and contributes greatly to the social fabric of these areas. Although a modest amount of dairying takes place in the LFA it is restricted to the best pastures suffering the least natural handicap. It would not be environmentally sound to encourage dairying on poorer land; that could lead to overgrazing and damage to the environment of the hills. Traditionally this land has made a social contribution by maintaining dairy farmers without special support beyond that offered by the market regime. In order to avoid overcompensation, the scheme does not therefore, include support for land used for dairy farming. Other forms of livestock production also exist in the Welsh LFAs. These production units have evolved relatively recently without direct LFA support. To support land used for these purposes under the Plan would risk overcompensation. 9.7.43 To be eligible for payment, a claimant must farm at least 6 hectares of eligible forage land in the Welsh LFA. 9.7.44 The maximum stocking density limits to be applied in the LFA are outlined in Section 9.1 covering Good Farming Practice. In addition, producers must respect the requirements of Good Farming Practice in order to be eligible to receive payment. 9.7.45 A minimum stocking density of 0.15 livestock units per hectare will apply, unless a lower stocking density is required by agri-environmental measures or other recognised environmental prescriptions, for example on designated sites. Failure to observe the minimum stocking limit will lead to the imposition of a proportionate financial penalty. Arrangements for 2001 9.7.46 The IACS 2000 Application form, which had to be submitted to the National Assembly for Wales Agriculture Department by 15 May 2000, also acted as the basic claim form for the Tir Mynydd Scheme 2001. The IACS literature explained that stock carried above the existing HLCA stocking rate of 1.4 LU/ha would not be included in the payment calculation for Tir Mynydd, which, at the time of submission of the form, included a production related element. 235 9.7.47 Clearly, when submitting their forms before 15 May, farmers were not aware of the eligibility criteria in relation to stocking density for Tir Mynydd (as set out in Section 9.1) as they had yet to be developed. This being the case, maximum and minimum stocking rates will be applied from the 2001 IACS application cycle onwards. 5-year commitment to farm 9.7.48 Compensatory allowances were first paid in Wales in 1976. Typically, approximately 13,000 payments are made each year. With the exception of those producers who no longer meet the increased minimum area criterion (6 hectares of forage land) all previous recipients of payments will be eligible for payment under Article 14(3) of Council Regulation 1257/1999. The majority of producers who first received payment after 1995 will therefore be able to carry forward their 5 year commitment to farm in the Less Favoured Areas. Producers who are excluded from payment because they no longer meet the increased minimum area criterion from 2001 and who have not yet fulfilled their 5 year commitment will be released from that commitment. Budget provisions 9.7.49 Budgetary provision for compensatory allowances in the LFA in the financial table at Section 8 for 2001 onwards is set at the baseline for which finance is available. The extent of the disadvantage faced by livestock farmers in the LFA is such that higher provision, commensurate with the budget available in 1998/99 and 1999/2000, would be legitimate and appropriate, should further resources become available: but the financial table has to reflect the present limitations on funding. The Assembly will continue to keep the level of budgetary provision for LFA compensatory allowances under review, in the light of the availability of funding, but will ensure that rates will be fixed for the period beyond 2002. 9.7.50 The payment structure will be reviewed in 2002-2003 following the completion of the study into land differentiation within the Less Favoured Areas indicated in Section 10. Tapering 9.5.51 As indicated in paragraph 9.5.28, a stepped taper will be applied to payments in order to ensure that the risk of over-compensation of the largest holdings does not occur. The taper will not apply to the first 140 hectares of eligible forage land on a holding. For holdings of over 140 hectares, payments on eligible forage land on that part of the holding in excess of 140 hectares, but less than 640 hectares, will be reduced by 35 %. For holdings of over 640 hectares, payments on eligible forage land on that part of the holding in excess of 640 hectares will be reduced by 70%. The effect of the taper will ensure that average payments for each farm size band remain reasonably constant in order to protect the position of family farms; at the same time it will avoid overcompensation of the largest holdings. 236 Level of support 9.7.52 Indicative minimum payment rates for Element 1 will be set having regard to the overall budget and to the intention to pay 95% of the budget on that element in 2001 and 2002, and 90% in subsequent years. Should insufficient claims be received to do so, the payment rates will be scaled up to ensure that this element of the budget is fully spent. Any necessary scaling up of payments will be carried out after 96% of claims have been processed. The indicative minimum rates will be: 2001 SDA (£/Ha) DA (£/Ha) 35 23 2002 35 23 2003 35 23 2004 35 23 2005 35 23 2006 35 23 The remaining 5% of the budget in 2001 and 2002, and 10% in subsequent years, will be used to fund Element 2. If insufficient points are scored under Element 2, the unused balance of funds will be paid out by increasing payments under Element 1 pro-rata. This calculation will be made after 96% of claims have been processed. Element 2 provides for bonus payments of up to 10% for those scoring one point, and up to 20% for those scoring two points or more. If the number of points scored overall means that, to remain within budget, no one can be paid the maxima of 10% and 20%, everyone will be paid at the same but lower rate within the maxima e.g. say 7% and 14%. 9.7.53 The aid intensity of this measure will be 100% of total costs; the Community contribution will be no more than 25% of the public cost. 9.7.54 There will be no exceptions as defined under Article 37(3) of Regulation 1257/1999. There are no ongoing financial commitments from the previous programming period. Indicators 9.7.55 These will include: ! ! ! ! ! Number of beneficiaries of compensatory allowances; Number of hectares covered by compensatory allowances; Average amount of payment (per holding and per hectare); Total public expenditure; % of those areas covered by compensatory allowances (of which mountain areas, other less favoured areas, areas with environmental restrictions, areas of rotational cropping). Green Measures ! ! Stocking rates Classified agricultural surfaces with additional environmental actions 237 9.8 AGRI - ENVIRONMENT 9.8.1 Activities in this area are covered by Articles 22 to 24 of Council Regulation 1257/1999 which allow for support for agricultural methods designed to protect the environment and to maintain the countryside, which will contribute to achieving the Community's policy objectives regarding agriculture and the environment. Support will promote: ! ways of using agricultural land which are compatible with the protection and improvement of the environment, the landscape and its features, natural resources, the soil and genetic diversity; an environmentally-favourable extensification of farming and management of low-intensity pasture systems; the conservation of high nature-value farmed environments which are under threat; the upkeep of the landscape and historical features on agricultural land; the use of environmental planning in farming practice. ! ! ! ! 9.8.2 Support will be granted to farmers who give agri-environmental commitments for at least five years and, where necessary, a longer period will be determined for particular types of commitments in view of their environmental effects. Agri-environmental commitments will involve more than the application of usual good farming practice and will provide for services which are not provided for by other support measures, such as market support or compensatory allowances. 9.8.3 The adoption of this measure will achieve the following objectives as identified in the SWOT in Section 5.1: ! ! ! ! ! encourage less specialisation and the adoption of mixed farming systems; encourage more sustainable use of resources; encourage farmers to manage wildlife habitats; lead to the adoption of environmentally friendly systems of production; provide greater opportunities associated with creating links between the environment, agriculture and diversification. Rationale for Proposals 9.8.4 The agricultural industry has always exerted considerable influence over the creation and maintenance of the countryside fabric. More recently, however, a combination of land improvement and intensification of production systems have had a major impact on both biodiversity and landscape. An increase in the use of sheep; a decline in cattle grazing; a shift from hay cropping into silage; and a general reduction in the cropping of both cereals and roots have all contributed to recent declines in farmland wildlife. In particular, changes in agricultural practice have severely affected UK Biodiversity Action Plan species such as the marsh fritillary butterfly, brown hare and skylark. 238 9.8.5 The agri-environment support programme will encourage farmers to retain existing beneficial practices at the same time as providing new opportunities to improve the quality of the environment through better management of natural resources such as soil, water, biodiversity, cultural features and landscape. 9.8.6 Recent declines in the rural labour force have made it increasingly difficult to maintain traditional field boundaries and undertake other labour intensive tasks such as woodland management and shepherding. Nevertheless, the agricultural industry in Wales is taking the opportunity to develop new markets for products positively associated with the environment. By encouraging the extensification of agriculture and the wise use of environmental resources, both the All Wales Agri-Environment Scheme (Tir Gofal) and the Organic Farming Scheme (OFS) are well positioned to make a major contribution to the continuing process of agricultural adjustment. Requirement for an All Wales Agri-Environment Scheme 9.8.7 Prior to the launch of Tir Gofal in March 1999 , the majority of Welsh farmers were unable to participate in a fully comprehensive agri-environment scheme. Some 30% of Wales was covered by an opportunity to enter a whole farm scheme of one type or another, whilst across the remainder of the country, the agri-environment programme consisted of a mix of part farm schemes, each with differing entry requirements. 9.8.8 This wide range of available schemes proved to be confusing to farmers as well as denying many of them the kind of opportunities available under some of the more advanced whole farm schemes. During the summer of 1996, a wide ranging public consultation exercise identified overwhelming support for a whole farm scheme available throughout the whole of Wales. Full details of the Tir Gofal programme were subsequently prepared by a Working Group comprising representatives drawn from the relevant statutory agencies, farming unions and the voluntary sector. Tir Gofal: Scheme Objectives 9.8.9 Each of the Tir Gofal measures takes forward best practice identified in the earlier generation of Welsh agri-environment schemes including ESA, Tir Cymen and Habitat Scheme. A wide range of measures have been developed so as to ensure that the scheme can meet the requirements of the UK Biodiversity Action Plan, as well as contribute to the enhanced management of the Natura 2000 network of Special Protection Areas (SPA) and Special Areas of Conservation (SAC). 9.8.10 The principal objectives of Tir Gofal are as follows: ! to benefit wildlife on agricultural land by promoting positive management of existing wildlife habitats and by encouraging habitat restoration and re-creation; to protect characteristic rural landscapes and promote the management and restoration of significant landscape features; to protect the historic environment, including both historic landscapes and features by encouraging farming practice compatible with their conservation and enhancement; In addition, the delivery of public access to the countryside under Article 33 of the RDR is integrated into the delivery of the Tir Gofal programme at local level. ! ! ! 239 Coverage 9.8.11 Tir Gofal is a whole farm scheme available to farmers throughout Wales. A wide range of component measures means that the scheme is suitable for the full range of farm types, farm sizes and farm locations found within Wales. 9.8.12 Applications are accepted into the scheme according to the order in which they are received. A scoring system is used to ensure that all applications provide sufficient environmental benefits. Structure of scheme 9.8.13 ! Tir Gofal consists of the following main components: An obligatory whole farm section consisting of a suite of measures designed to go beyond good environmental practice over the whole farm as set out in Section 9.1; Obligatory management of "Priority Habitats"; Optional management of habitats and features; Provision for access (funded under Article 33); Additional payments for habitat and feature management. ! ! ! ! THE WHOLE FARM SECTION 9.8.14 All participants in the Scheme are required to comply with a series of environmental measures, which apply to the whole farm. The Whole Farm Section seeks to ensure that the management all of the land entered into the scheme is compatible with good environmental practice. These measures are over and above the requirements of the Code of Good Agricultural Practice for the territory. The Whole Farm Section is aimed primarily at the protection of landscape, wildlife and historic features as well as the maintenance of opportunities for public access to the countryside. 9.8.15 The basic components of the Whole Farm Section are set out below. Landscape Features Field Boundaries (a) Scheme participants must retain all existing traditional boundaries including hedges, dry stone walls, earth banks, slate fences, stone gate posts and stone and ladder stiles. (b) Traditional boundaries which are stock proof at the time of entering into an agreement must be maintained in a stock proof condition using locally appropriate traditional materials. (c) At least 25% of the hedges on land under agreement must be left untrimmed in any one year, apart from those alongside roads which may require annual trimming to comply with legal requirements. The Project Officer will provide advice on detailed hedgerow management guidelines. 240 Trees (a) Individual trees and small groups of trees must be retained. Dead trees must be retained unless they cause a hazard or obstruction. Where possible the farmer/land manager should encourage natural regeneration to replace lost trees, otherwise replanting should be undertaken with saplings of local provenance. Damage to trees and associated plants and animals, e.g. by pesticide or herbicide drift , must be avoided. (b) If felling trees, the necessary licences must be obtained from the Forestry Commission. Historic/ Traditional Landscape Features (a) Historic sites and features are important components of the landscape. They must not be damaged or destroyed. They must be safeguarded from damage by stock, vehicles, cultivation or land reclamation works; trees should not be planted on these sites and no stones should be removed for any purpose including walling or building renovation work. (b) Traditional buildings are important landscape features. Those, which are weatherproof and structurally sound must be maintained in a weatherproof condition. Traditional buildings or parts thereof, which have not been modified must be maintained using traditional materials. (c) Semi-traditional buildings, which have been modified can be maintained using compatible materials. (d) Other traditional sound and well maintained landscape features, e.g. sheep folds, sheep pounds and stone slab bridges must be similarly maintained. (e) The use of metal detectors on agreement land must be in accordance with the Treasure Act 1996. Rock Features and Landforms (a) Geological features and landforms must be protected from damage. There should be no extraction of rock, scree, sand, shingle, gravel, clay or peat other than with the agreement of the Project Officer. (b) A 2 metre buffer zone around rock features must be maintained whilst observing the same prescriptions as given for field boundary buffer zones. Rubbish The farm should be kept free from rubbish, litter, derelict machinery and equipment. Whenever possible all bale wrappings and other plastics should be recycled through an approved outlet. 241 Field Boundary Buffer Zones A one metre buffer zone to all field boundaries measured from the base of the hedge, earthbank, wall or slate fence should be maintained. There should be no ploughing or cultivating and none of the following must be applied to the field boundary or to the buffer zone: ! ! ! ! lime or other substance to alter soil acidity; inorganic or organic fertiliser; pesticides; herbicides - except where carrying out selective treatment of nettles, spear thistle, creeping thistle, curled dock, broad-leaved dock, ragwort, Japanese knotweed, rhododendron or Himalayan balsam, using spot treatment or weed wiper. Other heavy infestations of problem weed species may be controlled where necessary following consultation with the Project Officer. Water Features (a) All water features such as ponds, lakes, streams and ditches must be maintained and should be protected from damage. Poaching and stock damage to banks, except watering places agreed beforehand with the Project Officer, must be avoided. (b) Participants in the scheme must not apply any fertilisers, off farm wastes, lime, pesticides or any other chemicals within 1 metre of water features. Neither can farm yard manure or slurry be applied within 10 metres of water features. Avoid poaching by stock or stock feeding in locations where this will cause pollution of water features. (c) Non native plants, fish or other species of birds and animals must not be introduced. (d) Pollution of waters (surface water, underground aquifers and cave systems) should be avoided. The control of pollution as required by the Water Resources Act and the Land Drainage Act 1991 must be adhered to. Stocking Rate (a) Overall stocking levels of grazing animals on all land subject to agreement should not be increased above the level carried in 1998 unless it is necessary to achieve agri-environmental objectives. (b) The management guidelines may require stock reduction on, or exclusion from, some habitats and features on the farm. Any surplus stock should normally be removed from the land under agreement, but exceptionally it may be possible to accommodate some of the surplus stock on improved grassland. In such cases this must not result in environmental damage from overstocking. In any event, overall stocking rates must not exceed the 1998 stocking level, or the Tir Mynydd maximum stocking density rate in LFAs, or the Code of Good Farming Practice maximum rate in other areas. 242 Non-native Species Scheme participants must not introduce any non-native animal or plant species to land subject to agreement, other than by agreement with the Project Officer. Animal Welfare UK guidelines and regulations in relation to animal welfare and the protection of wild birds, animals and plants must be followed. Codes of Good Agricultural Practice Scheme participants must operate their business in accordance with the Codes of Good Agricultural Practice as set out in Section 9.1. Public Access (a) Scheme participants must agree to allow public access on foot to unenclosed moorland, heathland and grassland. (b) Access to reach these areas may be by means of public rights of way where they exist, or by the creation of new permissive footpaths volunteered by scheme participants. Any overriding agricultural, safety or environmental considerations which necessitate the temporary closure of a permissive footpath or access area will need to be agreed with the Project Officer. (c) The agreement holders legal responsibilities relating to existing public rights of way which cross the land must be complied with. This includes keeping them free from obstruction and reinstating them after ploughing. Legal Requirements Scheme participants must comply with all relevant UK legal requirements, both in force when entering an agreement and which may come into force during the period of the agreement and will be responsible for obtaining any necessary consents, e.g. planning permission. Consultation Agreement must be obtained from the Project Officer in respect of proposals to undertake any of the following: (a) Erecting new buildings or significantly altering existing buildings, or modifying traditional buildings, other than the farmhouse. (b) Constructing tracks, roads, yards or hardstandings. 243 (c) Constructing new hedges, walls, fences or banks. (d) Realigning, dredging or damming watercourses; creating new or increasing the level of, existing water abstraction or altering the level of a water feature. (e) Moving or quarrying stone (including isolated boulders), scree, sand, shingle, gravel, clay or peat. (f) Using the land, or open water within the agreement holder's control, for organised and/or commercial sporting or recreational activities which may be in conflict with the scheme. (g) Clearing any areas of scrub, tree felling, or planting of trees and any work in woodland not included within the Woodland Grant Scheme agreement. (h) The control of bracken. (i) Excavating or depositing spoil on land or disposing of any off farm wastes. (j) Location of new hay or silage feeding sites. Payment Rates: The maximum payment made under the Whole Farm Section is £3000. The minimum size farm accepted into the scheme is 3 ha. These limits are the same as were applied in the preceding Tir Cymen scheme. The payments are tiered as follows: 0 - 20 ha 20 - 50 ha 50 - 100 ha 100 - 410 ha Over 410 ha £25 per ha £15 per ha £10 per ha £5 per ha Nil (max = £500) (max = £950) (max = £1450) (max = £3000) 244 OBLIGATORY MANAGEMENT OF "PRIORITY HABITATS". 9.8.16 Under this part of the scheme, farmers receive annual payments per hectare in return for managing their land according to a set of detailed prescriptions. In the event that any of the listed habitats are present on the farm, it is mandatory to enter those habitats into the scheme and to comply with the detailed prescriptions laid down for that measure. Woodland and Scrub 2.01 2.02 2.03 Semi-Natural Broadleaved Woodland Scrub Orchards and Farmed Parkland Heathland 2.04 2.05 2.06 High Mountain Heath Upland Heath Lowland Heath Grasslands 2.07 2.08 2.09 2.10 2.11 Unimproved Acid Grassland Unimproved Neutral Grassland Unimproved Limestone Grassland Semi-Improved Grassland Marshy Grassland Wetlands 2.12 2.13 Blanket and Raised Bogs Reedbeds, Swamps and Fens Coastal Land 2.14 2.15 2.16 2.17 Coastal Grazing Marsh and Floodplain Grassland Saltmarsh Maritime Cliff and Slope Sand Dune 9.8.16 The protection of areas of open water, as well as stockproof hedges, walls, earth banks, slate fences and other historic landscape features is included in the Whole Farm Section of the Scheme. 245 Woodland and Scrub 2.01 Semi-natural broad-leaved woodland Environmental Objectives (a) (b) (c) (d) (e) To encourage sustainable management of semi-natural broad-leaved woodlands in Wales. To encourage growth of the native tree, shrub and ground living plants typical of broadleaved woodlands, while retaining scattered conifers where these contribute to wildlife and landscape. To encourage a varied age structure in broad-leaved woodlands, comprising open glades and areas of naturally regenerating woody species, as well as mature woodland and individual trees. To allow for the development of a plentiful supply of dead standing timber. This will benefit hole nesting birds, lichens and fungi as well as insects and other invertebrates. In appropriate sites, to retain a short sward and open woodland structure of benefit to mosses and lower plants as well as to birds such as pied flycatcher and redstart. Environmental Justification This measure will contribute to UK Biodiversity Habitat Action Plan targets covering upland oakwoods, lowland beech and yew woodlands, upland mixed ash woods and wet woodlands. It supports UK BAP short list species such as red squirrel, pearl bordered fritillary butterfly, netted carpet moth and Kilarney fern. Broad-leaved woodlands support a wide range of plants, animals and birds, as well as forming attractive features in the landscape. Many of the broadleaved woodlands in Wales are open to grazing which inhibits or prevents their natural regeneration. The reduction or exclusion of grazing would encourage the growth of woodland saplings and a diverse woodland structure. Prescriptions (a) Within 12 months of entering the scheme, agree with the Project Officer a programme of management work designed to enhance the environmental, economic and where appropriate, the recreational value of the woodland. Where necessary, ensure that stock can be excluded. In woodlands which require light grazing (as defined by Project Officer) the stocking rate should not exceed 0.4 LU/ha/yr in wet woodland, or 0.05 LU/ha/yr in dry woodland. In particular years as agreed with the Project Officer, where weed control is necessary after 'mast' years to enhance seedling establishment, grazing should not exceed 0.3 LU/ha/yr. In woodlands where a short sward is required, existing grazing can be maintained. Do not carry out any supplementary feeding within the woodlands. (b) (c) (d) 246 Payment Rates Ungrazed (stock exclusion): Lightly Grazed: Existing Grazing: £125 per ha per year £95 per ha per year £10 per ha per year The Tir Gofal payments cover the stock exclusion/stock management as required by the Project Officer. Where additional payments are necessary to cover the cost of silvicultural management, agreement holders are entitled to apply for assistance under the Woodland Grant scheme, as follows: Relationship with Woodland Grant Scheme Where felling permissions are required, or management payments sought to contribute to the costs of implementing the management plan, the applicant should apply to enter woodlands into the Forestry Commission Woodland Grant Scheme (WGS). Eligible works under the WGS may include thinning, coppicing, construction of woodland management access tracks, rhododendron control and any necessary restocking with broad-leaved trees. 2.02 Scrub Environmental Objectives (a) (b) (c) (d) (e) To retain and enhance the value of native scrub for the benefit of wildlife and landscape. To manage areas of bramble, thorn, gorse and willow to ensure that there is no net loss of more valuable habitats or historic features. To manage large stands of scrub to provide a range of age classes interspersed with small areas of open ground. To reduce existing stands of non-native scrub, including rhododendron, sea buckthorn, holm oak and introduced cotoneasters. To remove scrub that is causing damage to historic landscape features. Environmental Justification The component habitats support UK Biodiversity Action Plan species such as dormouse, linnet, yellowhammer, stonechat and whitethroat. The management of scrub can be important for the safeguarding of habitats and historic and landscape features. 247 Prescriptions In areas specified by the Project Officer, agree a plan for management and control of scrub. Stock at a rate set for the underlying grassland type Payment Rates Scrub management : £30 per ha per year (Where scrub clearance is necessary, additional payments are available - see Additional Payments). 2.03 Orchards and Farmed Parklands The "Parklands" which this measure is intended to protect are areas of agricultural land. They are mainly under grassland, but may occasionally be in arable, with scattered mature trees. They form a specific type of traditional landscape associated with former large estates. The finest examples are listed in the "Register of Landscapes of Outstanding Historic Importance" jointly produced by CCW and CADW (the Welsh Historic Monuments Agency). Environmental Objectives (a) To encourage the development of a diverse habitat comprising standard fruit trees and species rich grassland in orchards; and comprising specimen broad-leaved and exotic trees, together with replacement saplings and lightly grazed pasture in farmed parklands. To encourage the maintenance and management of orchards and farmed parklands as traditional elements in the rural landscape. To maintain the characteristic features of less intensively managed sites such as dead wood and ancient trees. This will benefit hole nesting birds, mosses, lichens and fungi as well as insects and other invertebrates. To safeguard traditional varieties of fruit trees in orchards, especially those local to the area. To ensure that any replacement planting in farmed parklands is in keeping with existing landscape character and the historic value of the site. (b) (c) (d) (e) Environmental Justification This measure contributes to UK Biodiversity Habitat Action Plan targets covering lowland wood pastures and parklands. It supports UK BAP short list species such as pipistrelle bat, lesser horseshoe bat, greater horseshoe bat and orange fruited elm-lichen. Orchards and parkland form attractive features in the landscape. Well established orchards may be of significant value in biodiversity terms for traditional varieties of fruit trees. 248 Parklands are important as they form a particular type of historic landscape in the countryside, but there has been a decline in sites that have survived enclosure. This measure will contribute to their protection. Prescriptions (a) Within 12 months of entering the scheme, agree with the Project Officer a simple management plan covering the maintenance of existing trees, and historic parkland features, together with any necessary replanting, tree management and installation of tree guards. Ensure that stock can be controlled where necessary, by fencing, hedgerows or walls. Stock at a rate not exceeding 1.0 LU/ha/yr on improved grassland in orchards and 1.5 LU/ha/yr on improved grassland in parklands. On semi-improved or unimproved grassland the stocking rates appropriate to the habitat should be applied. Do not plough areas of semi-improved or unimproved grassland or apply any inorganic or organic fertilisers, other than farmyard manure (FYM) applied at a rate not exceeding 10 tonnes/ha every second year. Pesticides may used on arable land and may be used on grassland if spot treating notifiable weeds. (b) (c) (d) (e) Payment Rates are related to the underlying habitat as follows: Semi-Improved Grassland: Improved Grassland: Arable (tree management): Heathland 2.04 High Mountain Heath £80 per ha per year £80 per ha per year £20 per ha per year Environmental Objectives (a) (b) (c) (d) To maintain and enhance the characteristic remote and open landscape. To encourage the growth of characteristic native plants including dwarf shrubs such as crowberry and heather, together with a range of sedges, mosses and lichens. To discourage the spread of acid grassland plants favoured by heavy grazing such as common bent grass, tormentil and heath bedstraw. To prevent excessive grazing and the development of patches of bare ground (except where obviously due to climatic conditions). 249 Environmental Justification This measure supports the UK Biodiversity Action Plan long list species such as the dotterel. This habitat and its characteristic species are rare in Wales and has now been proposed for inclusion in the UK BAP. Prescriptions (a) (b) (c) (d) (e) (f) Stock at a rate not exceeding 0.05 LU/ha and remove all animals, by shepherding if necessary, between October and March each year. Do not cultivate or apply lime or inorganic or organic fertilisers, including FYM. Pesticides may only be used if spot treating notifiable weeds. Obtain the agreement of the Project Officer before clearing ditches or carrying out any cutting or burning. Do not carry out any supplementary feeding. Avoid over-grazing or under-grazing by shepherding on large sites. Payment Rates High Mountain Heath: 2.05 Upland Heath £30 per ha per year Environmental Objectives (a) (b) (c) To maintain and enhance the open moorland landscapes of these areas. To encourage a sward dominated by dwarf shrubs such as heather, cross leaved heath, bell heather, bilberry, deer grass and sphagnum mosses. To discourage the spread of plants favoured by heavy grazing and frequent burning and drainage, especially mat grass, wavy hair grass, sheep's fescue, purple moor grass, hare's-tail cotton-grass and heath rush. To prevent the development of 'damaged' growth forms of heather and other indicators of heavy grazing such as peat erosion. To maintain a water table close to the soil surface on wet areas. To prevent extensive encroachment by bracken, soft rush and scrub. To maintain small scale features including anthills, occasional scrub, small areas of bare ground and the typical hummock and hollow patterning of wet ground, as these are of value to a wide range of wildlife, especially birds and insects. (d) (e) (f) (g) 250 Environmental Justification This measure will contribute to the UK Biodiversity Habitat Action Plan targets covering Upland Heathland. It supports UK BAP species such as skylark as well as the golden plover, hen harrier and merlin. Prescriptions (a) On dry heath, stock at a rate not exceeding 0.225 LU/ha/yr. On wet heath, stock at a rate not exceeding 0.1 LU/ha/yr. On both dry and wet heath, stock numbers must be reduced by 25% between October and March each year. Do not cultivate or apply lime or inorganic or organic fertilisers, including FYM. Do not use herbicides or pesticides, other than for spot treating notifiable weeds, without the prior approval of the Project Officer. Obtain the agreement of the Project Officer before clearing ditches or carrying out any burning, cutting or supplementary feeding. Avoid over-grazing or under-grazing by shepherding on large sites. (b) (c) (d) (e) Payment Rates Upland Heath: 2.06 Lowland Heath £50 per ha per year Environmental Objectives (a) To encourage a sward dominated by dwarf shrubs such as heather, cross leaved heath, bell heather, bilberry, deer grass and sphagnum mosses, together with a range of herbs, mosses and lichens and in coastal locations, other characteristic species such as spring squill, thrift and sea plantain. To discourage the spread of plants favoured by heavy grazing, frequent burning and drainage especially mat grass, wavy hair grass, sheep's fescue, purple moor grass, hare's-tail cotton-grass and heath rush. To prevent the development of 'damaged' growth forms of heather and other indicators of heavy grazing such as peat erosion. To maintain a water table close to the soil surface on wet areas. To prevent extensive encroachment by bracken, soft rush and scrub. To maintain small scale features including anthills, occasional scrub, small areas of bare ground and the typical hummock and hollow patterning of wet ground as they are of value to a wide range of wildlife, especially birds, insects and other invertebrates. (b) (c) (d) (e) (f) 251 Environmental Justification This measure contributes to the UK Biodiversity Habitat Action Plan targets covering lowland heathland. It supports UK BAP species such as skylark, hornet robber fly, marsh fritillary butterfly, southern damselfly and black bog ant and on coastal heath, the chough, which are particularly significant in Wales. Prescriptions (a) (b) (c) (d) Do not cultivate or apply lime, inorganic or organic fertilisers, including FYM. Do not use herbicides or pesticides other than for spot treating notifiable weeds, without the prior approval of the Project Officer. Obtain the agreement of the Project Officer before clearing ditches or carrying out any burning, rolling, chain harrowing, cutting or supplementary feeding. On areas of dry heath, stock at a rate not exceeding 0.3 LU/ha/yr. On areas of wet heath, stock at a rate not exceeding 0.1 LU/ha/yr. On both dry and wet heath, at least 25% of the stock should be removed between October and March each year. Coastal heath sites suitable for chough may be grazed at a rate not exceeding 0.8 LU/ha/yr. Avoid over-grazing or under-grazing by shepherding on large sites. (e) (f) Payment Rates Lowland Heath: Grassland 2.07 Unimproved Acid Grassland £80 per ha per year Environmental Objectives (a) (b) (c) (d) To encourage the growth of the native plants typical of acid soils including, heath bedstraw, tormentil, sheep's sorrel and lousewort. To discourage the growth of weed species and those characteristic of more fertile soils such as creeping thistle, curled dock, perennial rye grass and white clover. To prevent extensive encroachment by bracken, scrub and unpalatable vegetation such as mat grass and heath rush. To maintain small scale features including anthills, occasional scrub and small areas of bare ground as they are of value to a wide range of wildlife, especially insects and other invertebrates. 252 Environmental Justification This measure contributes to UK Biodiversity Habitat Action Plan targets covering lowland dry acid grassland. It supports UK BAP species such as skylark and hornet robber fly. This habitat is important for the red kite which is a species of particular importance in Wales. Upland dry acid grassland forms a substantial component of the landscapes of the uplands of Wales from Snowdonia to the Brecon Beacons. It contributes significantly to the characteristic openness of these upland landscapes and where traditional grazing systems have helped to ensure the survival of a range of historic features. Prescriptions (a) (b) Do not cultivate, apply lime, inorganic or organic fertilisers, including FYM. Do not use herbicides or pesticides other than for spot treating notifiable weeds, without the prior approval of the Project Officer. (c) Stock at a rate not exceeding 0.4 LU/ha/yr. The rate can be increased up to a maximum of 0.75 LU/ha/yr on upland swards dominated by bent grasses and fescues. (d) (e) (f) Obtain the agreement of the Project Officer before clearing ditches, or carrying out any burning, rolling, chain harrowing, cutting or supplementary feeding, or "topping" before 15 July. Do not install new drainage. Avoid over-grazing or under-grazing by shepherding on large sites. Payment Rates Enclosed: Unenclosed: Under 200 ha: 200 - 500 ha: Over 500 ha: Under 200 ha: Over 200 ha: £55 per ha per year £40 per ha per year £30 per ha per year £15 per ha per year £40 per ha per year £30 per ha per year Commons: Justification for different payment rates for Unimproved Acid Grassland (a) Enclosed/ Unenclosed Unimproved Acid Grassland Enclosed acid grassland is normally capable of a higher level of production and stocking rate than where unenclosed. Enclosed areas tend to be on more productive land which may even have received a degree of agriculture improvement in the past. Unenclosed areas will generally be on less productive moorland which justifies a lower payment. 253 (b) Modulation of Payments for Unenclosed Unimproved Acid Grassland As the area of unenclosed unimproved acid grassland increases, we would expect to see a fall in productivity, as the larger areas tend to occur in the less productive upland regions. Also, as the area increases, the opportunities for agricultural improvement tend to reduce due to both the poor quality of the land and the physical problems of dealing with such large and remote areas. Therefore, a reduced level of payment is justified as the area increases. (c) Common Land Commons are normally grazed by groups of graziers exercising their rights over large tracts of open land and payments to these groups would be based on the total area of the common. The allocated grazing rights for the common entitle commoners to graze at stocking rates higher than those found on similar blocks of land farmed by individuals. Consequently, the imposition of reduced stocking rates has greater impact on commons, and the payments need to reflect this situation. Additionally, extra time is likely to be needed for shepherding and for the administration of the agreement by groups of graziers. Therefore, in order to encourage uptake, there is no reduction in payment for areas of over 500ha. 2.08 Unimproved Neutral Grassland Environmental Objectives (a) (b) (c) (d) To encourage the growth of the native species of neutral soils including bird's foot trefoil and knapweed. To discourage the growth of weed species and those characteristic of more fertile soils such as creeping thistle, curled dock, perennial ryegrass and white clover. To prevent extensive encroachment by bracken, scrub and coarse grasses favoured by lack of grazing, e.g. cocksfoot and false oat grass. To maintain small scale features including occasional scrub and small areas of bare ground as they are of value to a wide range of wildlife, especially insects and other invertebrates. Environmental Justification This measure contributes to the UK Biodiversity Habitat Action Plan targets covering species rich neutral grassland. It supports the UK BAP species such as skylark, brown hare and corncrake. 254 Prescriptions (a) (b) (c) (d) (e) (f) Do not cultivate or apply inorganic or organic fertilisers with the exception of FYM, where this has traditionally been applied, at a rate not exceeding 10 tonnes/ha every second year. Do not use any herbicides or pesticides, other than for spot treating notifiable weeds, without prior approval from the Project Officer. Stock at a rate not exceeding 0.75 LU/ha/yr. Obtain the agreement of the Project Officer before clearing ditches or carrying out any burning, liming, rolling, chain harrowing or supplementary feeding, or "topping" before 15 July. Do not install any new drainage. Close off haymeadows for at least eight weeks before mowing. Cut once a year after the date specified by the Project Officer, which will not be before 1 July. Payment Rates Grazing: Haymeadows: £90 per ha per year £145 per ha per year 2.09 Unimproved Limestone Grassland Environmental Objectives (a) To encourage the growth of the native plants typical of limestone soils including thyme, bird's foot trefoil, rockrose and salad burnet. In areas of limestone pavement, typical species include herb robert, hart's tongue fern and wall rue. To discourage the growth of weed species and those characteristic of more fertile soils such as creeping thistle, curled dock, perennial rye grass and white clover. To prevent extensive encroachment by bracken, scrub and those coarse grasses favoured by lack of grazing such as false oat grass. To maintain small scale features including anthills, occasional scrub and small areas of bare ground as they are of value to a wide range of wildlife, especially insects and other invertebrates. (b) (c) (d) Environmental Justification This measure contributes to the UK Biodiversity Habitat Action Plan targets covering lowland limestone grassland and upland limestone grassland. Supports a range of UK BAP species including skylark, brown hare, early gentian and high brown fritillary. 255 Prescriptions (a) (b) (c) (d) (e) Do not cultivate, apply lime, inorganic or organic fertilisers, including FYM. Do not use pesticides or herbicides, other than for spot treating notifiable weeds, without prior approval from the Project Officer. On limestone grassland, stock at a rate not exceeding 0.4 LU/ha/yr. On limestone pavements, stock at a rate not exceeding 0.15 LU/ha/yr. Obtain the agreement of the Project Officer before clearing ditches or carrying out any rolling, chain harrowing, cutting or supplementary feeding, or "topping" before 15 July. Do not burn grassland or install any new drainage. Payment Rates Unimproved Limestone Grassland: 2.10 Semi-improved Grassland £130 per ha per year Environmental Objectives (a) (b) (c) (d) To encourage the growth of the native species including bird's foot trefoil, knapweed, sheep's sorrel, tormentil, rock rose and salad burnet. To discourage the growth of weed species and those characteristic of more fertile soils such as creeping thistle, curled dock, perennial rye grass and white clover. To prevent extensive encroachment by bracken, scrub and coarse grasses favoured by lack of grazing such as cocksfoot and false oat grass. To maintain small scale features including occasional scrub and small areas of bare ground as they are of value to a wide range of wildlife, especially insects and other invertebrates. Environmental Justification This measure supports the UK Biodiversity Action Plan species such as skylark, brown hare and corncrake. 256 Prescriptions (a) Do not cultivate or apply inorganic or organic fertilisers with the exception of FYM applied at a rate not exceeding 10 tonnes/ha every second year. In exceptional circumstances, where FYM is unavailable, it may be possible to agree an alternative such as light annual dressings of organic based fertiliser. Do not use herbicides or pesticides, other than for spot treating notifiable weeds, without prior approval from the Project Officer. Stock at a rate not exceeding 1.0 LU/ha/yr on neutral grasslands and 0.75 LU/ha/yr on acid and limestone grasslands. Obtain the agreement of the Project Officer before clearing ditches or carrying out any liming, rolling, chain harrowing or supplementary feeding or "topping" before 15 July. Do not burn or install any new drainage. Close off haymeadows for at least eight weeks before mowing. Cut once a year after the date specified by the Project Officer which will not be before 1 July. (b) (c) (d) (e) (f) Payment Rates Grazing: Haymeadows: 2.11 Marshy Grassland £90 per ha per year £145 per ha per year Environmental Objectives (a) To encourage growth of the native plants typical of damp soils including tormentil, meadow thistle, marsh bedstraw and angelica in the lowlands, and cross leaved heath, tormentil, marsh violet and sedges in the uplands. To discourage the dominance of invasive species and those characteristic of more fertile soils such as purple-moor grass, rush and tufted hair grass. To prevent extensive encroachment by scrub and bracken. To maintain small scale features including anthills, occasional scrub and small areas of bare ground as they are of value to a wide range of wildlife, especially insects and other invertebrates. (b) (c) (d) Environmental Justification This measure contributes to the UK Biodiversity Habitat Action Plan targets covering purple-moor grass and rush pastures. It supports UK BAP species such as lapwing, curlew, marsh fritillary butterfly, southern damselfly and golden plover in the uplands. 257 Prescriptions (a) (b) (c) (d) (e) (f) Do not cultivate, apply lime, inorganic or organic fertilisers, including FYM. Do not use herbicides or pesticides, other than for spot treating notifiable weeds, without prior approval from the Project Officer. Stock at a rate not exceeding 0.4 LU/ha/yr. Obtain the agreement of the Project Officer before clearing ditches or carrying out any rolling, chain harrowing, cutting or "topping", supplementary feeding or burning of grassland. Do not install any new drainage systems. Do not use any lime, inorganic or organic fertiliser including FYM or pesticides within a 10 metre buffer zone adjoining marshy grassland. Payment Rates Marshy grassland: Wetlands 2.12 Blanket And Raised Bogs £80 per ha per year Environmental Objectives (a) (b) (c) (d) (e) (f) To encourage the growth of native plant species typical of the habitats such as sphagnum mosses, bog asphodel and sundew. To discourage the spread of plants favoured by heavy grazing, frequent burning and drainage, especially purple-moor grass, hare's-tail cottongrass and heath rush. On blanket bog sites to prevent the development of 'damaged' growth forms of heather and other indicators of heavy grazing such as peat erosion. On raised bogs, to prevent peat erosion and the spread of species associated with disturbance and nutrient enrichment such as rose-bay willowherb, birch, brambles and bracken. On blanket bogs, to maintain a water-table close to the surface and prevent extensive encroachment by soft rush and scrub. On raised bog sites, to maintain a high water table with natural surface pools and peripheral streams at the edge of the raised bog in order to encourage the continued growth of peat-forming species. To maintain small scale features such as the typical hummock and hollow patterning of wet ground since these are of value to birds such as the golden plover as well as insects and other invertebrates. (g) 258 Environmental Justification This measure contributes to the UK Biodiversity Habitat Action Plan targets covering blanket bogs and raised bogs. It supports UK BAP species such as bog ant, as well as golden plover, hen harrier and merlin which are particularly significant in Wales. Prescriptions (a) (b) (c) Do not cultivate or apply lime, inorganic or organic fertilisers including FYM. Do not use herbicides or pesticides, other than for spot treating notifiable weeds, without prior approval from the Project Officer. Stock at a rate not exceeding 0.05 LU/ha/yr and avoid grazing, by shepherding or stock exclusion, between October and March each year; avoid overgrazing or under grazing for the remainder of the year. Obtain the agreement of the Project Officer before clearing ditches, cutting vegetation or carrying out supplementary feeding. Small scale peat cutting for personal use may be acceptable following consultation with the Project Officer. Do not burn raised bogs; burn blanket bogs only with the approval of the Project Officer. Do not install any new drainage systems. Do not cultivate or use any lime, pesticides or inorganic fertiliser, including FYM, on land within a 10 metre buffer zone of blanket or raised bogs. (d) (e) (f) (g) Payment Rates Blanket Bog: Raised Bog: £40 per ha per year £50 per ha per year 2.13 Reedbeds, Swamps and Fens Environmental Objectives (a) (b) To encourage the growth of native plant species typical of the habitats. To maintain wet conditions throughout the year. For areas of tall fen, reedbed and swamp, to ensure shallow flooding during the winter months and to retain areas of open water as these are of benefit to a wide range of wildlife. To prevent scrub encroachment, but in areas of tall fen, reedbed and swamp, maintain existing woodland cover. In areas of tall fen, reedbeds and swamp, provide suitable conditions for breeding birds such as sedge and reed warblers as well as rare species such as bittern and aquatic warbler. (c) (d) 259 Environmental Justification This measure contributes to the UK Biodiversity Habitat Action Plan targets covering species rich fens and reedbeds. It supports UK BAP species such as southern damselfly, marsh fritillary butterfly, otter, aquatic warbler, bittern and water vole. Prescriptions (a) (b) (c) (d) (e) (f) Do not cultivate, apply lime, inorganic or organic fertilisers, including FYM. Do not use herbicides or pesticides, other than for spot treating notifiable weeds, without prior approval from the Project Officer. Do not reduce existing water levels, or install any new drainage systems. Obtain the agreement of the Project Officer before clearing ditches or carrying out any burning. Agree a simple management plan defining which areas may be cut and which may be grazed. Stock at no more than 0.15 LU/ha/yr. Do not cultivate or use any lime, pesticides, inorganic or organic fertiliser, including FYM, within a 10 metre buffer zone of reedbeds, swamps and fens. Payment Rate:s Reedbeds, Swamps and Fens: Coastal 2.14 Coastal Grazing Marsh and Floodplain Grassland £35 per ha per year Environmental Objectives (a) (b) (c) (d) To maintain the traditional landscape pattern of species rich and improved grassland, together with ancient hedgerows and areas of scrub, swamp and open water. To encourage a diversity of vegetation structures within drainage ditches, ranging from open water through to tall herbs and common reed. To maintain high water levels and reduced stocking densities during spring so as to benefit ground nesting birds such as snipe, redshank and lapwing. To maintain small scale features including anthills, occasional scrub and small areas of bare ground as they are of value to a wide range of wildlife, especially insects and other invertebrates. 260 Environmental Justification This measure contributes to the UK Biodiversity Habitat Action Plan targets for coastal grazing marsh and floodplain, as well as many of the component habitats such as unimproved neutral grassland and lowland marshy grassland. It supports UK BAP species such as brown hare, water vole, lapwing, skylark, shrill carder bee, mole cricket and shining ramshorn snail. Prescriptions (a) (b) (c) (d) (e) (f) (g) Manage existing habitats such as unimproved or semi-improved grassland, whether cut or grazed, and marshy grassland according to the relevant guidelines. Manage improved grassland by fertilising at no more than 50 kg/ha/yr of Nitrogen (or FYM equivalent). The improved land must not be rolled, fertilised or cut between 1 April and 15 June, but may be grazed at no more than 0.4 LU/ha. Obtain the agreement of the Project Officer before converting any areas of improved grassland to arable land. Cast at least 80% of the ditches over the lifetime of the agreement but treat no more than 20% in any one year, unless otherwise agreed with the Project Officer. Do not reduce existing water levels, or install any new drainage system, without the approval of the Project Officer. On improved land, do not cultivate or use any lime, pesticides, inorganic or organic fertilisers, within 2 metres of a river, stream, field boundary ditch or other open water feature*. *Note: Farmyard manure and slurry are already prohibited within 10m of a water feature or water course under the terms of part 3 (ii) of the Whole Farm Section. Payment Rates Coastal Grazing Marsh and Flood Plain Grassland: Improved Land: Neutral Grassland: Semi-Improved Grassland: Marshy Grassland: Other habitats: £180 per ha per year £90 per ha per year/£145 per ha per year £90 per ha per year/£140 per ha per year £80 per ha per year As specified elsewhere in the prescriptions 261 2.15 Saltmarsh Environmental Objectives (a) (b) (c) To maintain a short grassy turf that can be grazed by overwintering ducks and geese. To provide suitable conditions for breeding birds including waders such as redshank and lapwing. To retain vegetation characteristic of ungrazed saltmarsh. Environmental Justification This measure contributes to the UK Biodiversity Habitat Action Plan targets for saltmarsh. It supports BAP species such as the narrow-mouthed whorl snail and the shrill carder bee. Prescriptions Agree a suitable grazing regime with the Project Officer for short turf and/or breeding wader habitats. Stocking rates must not exceed 1.0 LU/ha/yr for short grassy swards, reducing to 0.4 LU/ha between 1 April and 15 July. Stocking rates on breeding wader sites should not exceed 0.4 LU/ha/yr with stock excluded completely between 1 April and 15 July. (a) (b) (c) (d) (e) (f) Existing ungrazed areas of coastal reedbeds on farmland must be left ungrazed for the duration of the agreement. Do not cultivate, apply lime, inorganic or organic fertilisers including FYM. Do not use any herbicides or pesticides, other than for spot treating notifiable weeds, without prior approval from the Project Officer. Obtain the agreement of the Project Officer before clearing ditches or carrying out any cutting or supplementary feeding. Do not burn vegetation. Do not remove accumulations of seaweed without prior approval from the Project Officer. Payment Rates Short Turf: Managed for Breeding Birds: Existing Ungrazed Saltmarsh: £80 per ha per year £170 per ha per year £40 per ha per year 262 2.16 Maritime Cliff and Slope Environmental Objectives (a) (b) (c) (d) To encourage the growth of slow growing plants typical of cliff-top grassland such as red fescue, thrift, sea plantain and spring squill. To discourage the growth of weed species and those characteristic of more fertile soils such as creeping thistle, ragwort, perennial ryegrass, white clover and daisy. To prevent extensive encroachment by bracken, gorse scrub and introduced species such as holm oak, hottentot fig and cotoneaster. To maintain small scale features including anthills, variations in sward height and small areas of bare ground as they are of value to a wide range of wildlife, including birds such as chough as well as insects and other invertebrates. Environmental Justification This measure contributes to UK Biodiversity Habitat Action Plan targets for Maritime Cliff and Slope. It supports UK BAP species such as wild cotoneaster and skylark, linnet and chough. Prescriptions (a) (b) (c) (d) Do not cultivate or apply lime, inorganic or organic fertilisers, including FYM. Do not use herbicides or pesticides, other than for spot treating notifiable weeds, without prior approval from the Project Officer. Do not install any new drainage and obtain the agreement of the Project Officer before clearing ditches or carrying out any burning, cutting or supplementary feeding. Exposed sites may not require grazing; otherwise the stocking rate should not exceed 0.4 LU/ha/yr. Chough sites may be maintained at 0.8 LU/ha/yr using shepherding if necessary. Payment Rates Grazed: Ungrazed sites: £110 per ha per year (including chough sites) £10 per ha per year 263 2.17 Sand Dune Environmental Objectives (a) (b) (c) (d) (e) To encourage the growth of the slow growing plants typical of dune grassland such as sand sedge, restharrow, bird's foot trefoil and smooth cat's ear. To maintain existing dune slacks (seasonally wet depressions) characterised by plants such as creeping bent, marsh pennywort, fleabane, and a variety of sedges and other wetland species. To discourage the growth of weed species and those characteristic of more fertile soils such as creeping thistle, curled dock, perennial ryegrass and white clover. To prevent encroachment by bracken, scrub and coarse grasses such as cocksfoot, false oat grass and wood small-reed. To maintain small scale features including anthills, occasional scrub and small areas of bare ground as they are of value to a wide range of wildlife, especially insects and other invertebrates. Environmental Justification This measure contributes to the UK Biodiversity Habitat Action Plan targets for sand dunes, and it supports UK BAP species such as sand lizard, natterjack toad and shrill carder beetle. Prescriptions (a) Do not cultivate or apply lime, insecticides, inorganic or organic fertilisers. FYM may be applied to areas previously cropped for hay at a rate not exceeding 10 tonnes/ha every second year. (b) Do not use herbicides or pesticides, other than for spot treating notifiable weeds, without prior approval from the Project Officer. (c) Obtain the agreement of the Project Officer before clearing ditches or carrying out any rolling, chain harrowing, cutting, application of FYM on hay meadows, supplementary feeding or rabbit control. (d) Do not burn vegetation. (e) Stock at a rate not exceeding 0.6 LU/ha/yr (Reduce to 0.05 LU/ha/yr on dune heaths). Payment Rates Sand Dune: £70 per ha per year 264 OPTIONAL MANAGEMENT OF HABITATS AND FEATURES 9.8.17 Under this part of the scheme, farmers receive annual payments per hectare in return for managing their land according to a set of detailed prescriptions. Hedgerow restoration and the repair of stone walls are exceptions to this general rule, in that payments for these measures are made per linear metre following a claim in respect of works completed. 9.8.18 Whilst the farmer has the opportunity to choose whether or not to take up any of the voluntary measures, compliance with the detailed prescriptions is mandatory once they have been included in the agreement. This part of the scheme is particularly valuable as a means of restoring those parts of Wales particularly affected by past agricultural intensification. The existence of a wide range of optional measures ensures that farmers with little remaining wildlife habitat can still contribute towards the objective of the Welsh agri-environment programme. 9.8.19 The acceptance of proposals to implement any of the measures included this section is discretionary on the part of the scheme administrators. Such discretion ensures the environmental benefits of expenditure devoted to the optional parts of the scheme can be maximised. Landscape Features 3.18 3.19 3.20 3.21 3.22 3.23 Hedgerow Restoration Stone Walls, Slate Fences, Stone Fenced and other Earth Banks Historic Landscape Features Buried Archaeological Remains Cliff, Rock and Scree Shingle Banks Arable Land Management 3.24 3.25 3.26 3.27 3.28 3.29 3.30 3.31 Unsprayed Cereal, Rape and Linseed Crops Winter Stubbles Spring Cereals Undersown with Grasses and Legumes Unsprayed Root Crops followed by Winter Grazing Rough Grass Margins Uncropped Fallow Margins Wildlife Cover Crops Conversion of Arable Land to Grassland 265 Grassland Restoration to Enhance Habitats and Features 3.32 3.33 3.34 3.35 3.36 Conversion of Improve Grassland to Semi-improved Haymeadow and Grazing Pasture Buffer Zones on Improved Land Adjacent to Ponds, Lakes, Streams and Field Boundary Ditches Management of Improved Grassland for Breeding Lapwing and Over-wintering Wildfowl Conversion of Semi-improved Grassland to Unimproved Grassland Increasing Water Levels on Suitable Habitats Establishment of New Habitats 3.37 3.38 3.39 3.40 3.41 3.42 3.43 New Broadleaved Woodland and Scrub Establishment of Streamside Corridors Establishment of New Reedbeds Establishment of Heathland Vegetation on Acid Grassland Establishment of Heathland Vegetation on Improved Farmland Establishment of New Saltmarshes and New Reedbeds on Saltmarshes Establishment of New Sand Dunes on Improved Farmland Landscape Features 3.18 Hedgerows Environmental Objectives (a) (b) (c) To maintain the character of the local landscape together with the traditional field pattern. To manage living field boundaries to benefit a variety of wildlife including plants, small mammals and birds, as well as insects and other invertebrates. To restore derelict hedgerows and establish new ones where appropriate. Environmental Justification This measure contributes to UK Biodiversity Habitat Action Plan targets for ancient and/or species rich hedgerows and supports UK BAP species such as bull finch, dormouse, song thrush as well as several species of invertebrates. Hedges are a significant form of traditional field boundary and they play an important part in establishing landscape character. Some hedges belong to distinctive and recognisable historic field systems. 266 Prescriptions (a) (b) Follow all of the requirements of the Whole Farm Section where existing hedges are already stockproof. Elsewhere on the holding, agree a simple plan of boundary renovation and/or establishment of hedges to be undertaken during the period of the agreement. Payment Rate Details are provided in the payment schedule for Traditional Boundary Work (between measures 3.19 and 3.20). Funding of hedgerow work under the Scheme will be subject to a maximum of 10m/ha/yr. There will be a Scheme expenditure limit of £3500/farm/year *. 3.19 Stone Walls, Slate Fences, Stone Faced and Other Earth Banks Environmental Objectives (a) (b) (c) To maintain the character of the local landscape together with the traditional field pattern. To manage existing stone boundaries and earth banks to benefit a variety of wildlife, including plants and birds, as well as insects and other invertebrates. To restore stone boundaries and banks and establish new ones where appropriate. Environmental Justification Stone walls, slate fences, stone faced and other earth banks are an important form of traditional field boundary in Wales and contribute significantly to the character of the landscape in certain areas. This measure will contribute to their protection. Some of these boundaries belong to highly distinctive and recognisable historic field patterns. Stone walls and earth banks support a range of plants, small mammals, reptiles and birds. Prescriptions (a) (b) Follow all of the requirements of the Whole Farm Section where existing walls, banks and slate fences are already stockproof. Elsewhere on the holding, agree a simple plan of boundary repairs and/or creation of new boundary features to be undertaken during the period of the agreement. 267 Payment Rates Funding of traditional boundary work under the Scheme will be subject to a maximum of 10m/ha/yr. There will be a Scheme expenditure limit of £3500 /farm /year.* *Where participants undertake restoration work on a combination of hedgerows, and other traditional boundary features, the overall ceiling of £3500 /farm/year will still apply. Traditional Field Boundary Payments Type of Boundary Hedging (planting, laying and coppicing) Dry Stone Walls Supplement for Importing Stone Stone faced Earth Banks Earth Banks Slate fences resetting existing slates and rewiring erection of new slate fence Payment £2.00 per metre £18.00 per sq metre £7.50 per sq metre £11.00 per sq metre £3.00 per metre £10.00 per metre £18.00 per metre 3.20 Historic Landscape Features Environmental Objectives a) (b) (c) To maintain historic landscape features such as earthworks and historic stone structures on farmland in a stable condition. To prevent soil erosion and damage to these features by adjusting stocking regimes and cultivation practices and by the management of trees on the site. To prevent scrub and bracken encroachment. Environmental Justification Historic earthworks and stone structures are important components of the Welsh landscape. Whilst of great cultural significance, most of these features have no agricultural use and some form obstacles to production. Some have become degraded or damaged through neglect or as a result of agricultural practices. This measure contributes to their protection and better management. 268 Prescriptions (a) (b) Follow all the requirements of the Whole Farm Section in order to safeguard existing features. On appropriate sites, agree a simple management plan covering work such as clearance of scrub, management of trees, re-alignment of farm access tracks and the relocation of existing fencing and water troughs. Payment Rates Area payments for the conversion of arable land to lightly stocked grassland, or for a reduction in grazing levels (see optional measures 3.31 and 3.32) are available at the discretion of the project officer, always provided these measures will contribute to better management of the historic feature. 3.21 Buried Archaeological Remains Environmental Objectives (a) (b) To protect buried archaeological remains on farmland from disturbance due to heavy grazing or cultivation. To protect waterlogged archaeological remains on farmland from damage and desiccation due to drainage and falling water levels. Environmental Justification Many buried archaeological sites are of great cultural and scientific importance. Some areas such as peatlands are of significant landscape and wildlife value. The presence of buried archaeological remains can inhibit the full agricultural use of farmland. .Such sites are also at risk of degradation and gradual obliteration as a result of agricultural practices such as ploughing and the drying out of the soil structure. This measure contributes to the preservation of a significant scientific and cultural resource . Prescriptions (a) (b) Follow all the requirements of the Whole Farm Section in order to safeguard existing features. On appropriate sites, agree a simple management plan covering work such as restoration to grassland; reductions in grazing intensity; or raising of water levels. Payment Rates Dry Sites: Area payments for the conversion of arable land to lightly stocked grassland or for a reduction in grazing levels (see optional measures 3.31 and 3.32) are available at the discretion of the project officer, always provided these measures will contribute to the better management of the site. 269 Wet Sites: Area payments for undertaking to increase water levels sufficient to prevent desiccation (see optional measure 3.36) are available at the discretion of the Project Officer, always provided this measure will contribute to the better management of the site. The remaining elements of the Management Plan are covered by Additional Payments. 3.22 Cliff, Rock and Scree Environmental Objectives (a) (b) To maintain the species characteristic of rocky outcrops, cliffs and scree on farmland such as ladyfern, great woodrush, goldenrod and wild angelica. To encourage the spread of tall herb communities and/or scrub on to adjacent open areas. Environmental Justification This measure will contribute to the UK Biodiversity Action Plan targets for cliff, rock and scree. It supports BAP species such as the high brown fritillary. Prescriptions (a) (b) Follow all the requirements of the Whole Farm Section. Do not burn or cut vegetation Payment Rates Cliff, Rock and Scree are identified on the agreement map and attract payment under the Whole Farm Section in the normal way. Additional payments are available to cover any further necessary works such as fencing. 3.23 Shingle Banks Environmental Objectives (a) (b) (c) To maintain the characteristic plant communities of stable shingle banks, including both open pioneer vegetation as well as areas of grassland, heath and scrub. To encourage the development of vegetated shingle banks. To encourage nesting birds such as the ringed plover (coasts) and little ringed plover (rivers). Environmental Justification This measure will contribute to the UK Biodiversity Action Plan targets for shingle banks. It supports BAP species such as the turnstone. 270 Prescriptions (a) (b) (c) Follow all the requirements of the Whole Farm Section. Retain accumulations of seaweed, timber and other waterborne materials. Do not burn or cut vegetation. Payment Rates Shingle Banks are identified on the agreement map and attract whole farm section payments in the normal way. Any further necessary works such as fencing are covered by Additional Payments Arable Land Environmental Objectives of Tir Gofal Arable Measures (Nos 3.24-3.31) ! To encourage the growth of a range of broadleaved plants, especially arable weeds such as cornflower, shepherds needle and small flowered catchfly. To provide feeding opportunities for overwintering birds such as skylark, linnet and tree sparrow and to provide safe habitats for overwintering insects such as sawflies, which are important as a food source for the chicks of skylark and partridge. To provide a range of nectar sources and other food plants for invertebrates, which may assist in pest control and provide a food source for young birds. To provide nesting sites and feeding areas for birds such as partridge and yellowhammer. To diversify areas of grass monoculture and retain beneficial mixed farming practices. To provide areas of tussocky grassland of benefit to small mammals, as well as nesting and feeding birds such as partridge, yellowhammer, kestrel and barn owl and to provide cover for the brown hare. To provide an extended pollution control buffer between significant environmental features and cropped land. To enhance the landscape and historic value of parkland, grazing marsh and the coast. ! ! ! ! ! ! ! Environmental Justification These measures support UK Biodiversity Action Plan species such as brown hare, linnet, skylark, tree sparrow and cornflower. 3.24 Unsprayed Cereal, Rape and Linseed Crops (Applies to existing arable crops or to arable and converted from improved grassland) The Environmental Objectives are numbers (A), (C) and (G) above. 271 Prescriptions (a) Establish a cereal, rape or linseed crop before 20 April. Use either whole fields or selected headlands (provided the latter are at least 4 metres in width). Spring cereals are preferred. Winter cereals will be accepted on headlands up to a maximum width of 12 metres, but not in whole fields. Grassland which is converted to arable, but which adjoins water courses, must not be ploughed before 1 March in any year. Do not undersow or apply any insecticides. Molluscicides may only be used if drilled with the seed. It is acceptable to apply lime and fertiliser, but obtain the agreement of the Project Officer before applying selective treatments of herbicide or fungicide. The crop must not be harvested before the date specified by the Project Officer, which will never be before 1 August (The Project Officer may, in exceptional circumstances, agree an earlier date for winter cereals). (b) (c) (d) Payment Rates Existing Arable Land: Conversion of Improved Grassland: £120 per ha per year £390 per ha per year The conversion rate is only available on farms that have been in an all-grass system for at least five years. 3.25 Winter Stubbles The Environmental Objectives are numbers (A), (B) and (C) above. Prescriptions (to be applied from the date of harvest up until 1 March in the following year) (a) (b) Manage whole arable fields by removing straw after harvest and allowing natural regeneration of grasses and broad-leaved plants. Do not cut regenerating vegetation before 15 February or apply any pesticides (with the exception of herbicides for spot treating notifiable weeds), lime, inorganic or organic fertiliser, with the exception of FYM which may be applied up to a maximum of 10 tonnes/ha/year. Obtain the agreement of the Project Officer before allowing any recreational activities such as clay pigeon shooting. Grazing is acceptable provided the stocking rate does not exceed 0.4 LU/ha at any time. Do not plough, cultivate or direct drill before 1 March unless agreed with the Project Officer. (c) (d) (e) Payment Rates After a Conventional Crop: After Unsprayed Cereals etc: £80 per ha per year £120 per ha per year 272 3.26 Spring Cereals Undersown with Grasses and Legumes The Environmental Objectives are numbers (B), (C) and (D) above. Prescriptions (a) (b) (c) Establish a spring cereal or oilseed rape crop undersown with grasses and legumes in whole fields before 20 April. Do not apply any insecticides or fungicides unless the latter are applied to the seed before sowing. It is acceptable to use lime, fertilisers and herbicides provided the latter have approval for use on cereals undersown with grasses and legumes. Molluscicides can only be used if drilled with the seed. The crop must not be harvested before 1 August unless otherwise agreed with the Project Officer. Stock must be excluded until 15 September. (d) (e) Payment Rates £90 per ha per year 3.27 Unsprayed Root Crops following by Winter Grazing The Environmental Objectives are numbers (A), (B), (C) and (D) above. Prescriptions (a) (b) Establish a root crop (whole fields only) before 1 July. Glyphosate may be applied to spray off established vegetation prior to establishing the crop but do not apply other herbicides, except for spot treating notifiable weeds. Molluscicides may only be used if drilled at time of establishment. Other pesticides may only be applied with the prior approval of the Project Officer. Use of lime and fertilisers is acceptable. Grazing should not commence until after 14 October. The land may not be ploughed until 1 March in the following year unless otherwise agreed with the Project Officer. (c) (d) Payment Rates £235 per ha per year 273 3.28 Rough Grass Margin This option is only available in fields continuously cropped for at least five years from the start of the agreement. The Environmental Objectives are numbers (A), (B), (C), (D) and (E) above. Prescriptions (a) (b) Establish a grass margin of between 4m and 12m width adjacent to a cereal or root crop. Use slow growing species based on a list from the Project Officer. Margins may be cut up to three times in the first year to aid establishment. Thereafter the margin may only be cut between 15 July and 31 March, with no more than half of the grassland being cut in any one year. Do not apply any molluscicides, insecticides, lime, inorganic or organic fertilisers, including FYM, except at the time of establishment with the prior approval of the Project Officer. Do not use herbicides, except as a spot treatment for the control of notifiable weeds. Obtain the agreement of the Project Officer before carrying out any grazing. (c) (d) (e) Payment Rates £350 per ha per year 3.29 Uncropped Fallow Margin (maximum of 3ha per agreement) The Environmental Objectives are numbers (A), (B), (C) and (G) aboce. Prescriptions (a) (b) (c) (d) (e) Cultivate a seed bed of between 4m and 12m width adjacent to a cereal or root crop. Allow this unsown strip to regenerate naturally. Do not apply any molluscicides, insecticides, fungicides, lime, inorganic or organic fertiliser, including FYM. Do not use herbicides, except as spot treatment for the control of notifiable weeds. Manage the strip without grazing or cutting. Cultivate once a year, or once in every two years, depending on whether the agreement is designed to conserve annual or biennial wild plants. All cultivations must be carried out between 1 October and 31 March. Payment Rates £450 per ha per year 274 3.30 Establishment of Wildlife Cover Crop (maximum of 3ha per agreement) The Environmental Objectives are numbers (A), (B), (C) and (D) above. Prescriptions (a) Cultivate a seed bed of at least 4m in width (whole fields are acceptable). Establish a seed mix before 20 April. Typical species will include teasel, kale, fodder beet, triticale, millet, red clover and sainfoin. Annual seed mixes may not be cut or grazed before 15 March in the year following establishment, except with the prior approval of the Project Officer. Mixtures containing biennials must be retained until 15 March in the second year after establishment unless the prior approval of the Project Officer is obtained. Do not use any insecticides, fungicides, molluscicides, lime, inorganic or organic fertiliser such as FYM, except at the time of establishment with the prior approval of the Project Officer. Do not use any herbicides, except as a spot treatment for notifiable weeds. (b) (c) (d) Payment Rates £ 350 per ha per year 3.31 Conversion of Arable Land to Grassland The Environmental Objectives are numbers (F), (G) and (H) above. Conversion to semi-improved grassland requires the use of slow growing species as detailed by the Project Officer. Conversion to improved grassland will normally be limited to farmed parklands, other traditional or historic landscape sites, coastal grazing marshes and land adjacent to wetlands. This option will normally only be available on sites that have been continuously cropped for arable for the last 5 years, and where there are significant environmental benefits accruing from the proposed conversion. Prescriptions (a) (b) Obtain the agreement of the Project Officer before using any lime, herbicides, except for spot treating notifiable weeds, or other pesticides. If converting to improved grassland (other than on coastal grazing marsh and floodplain grassland) it is acceptable to use either FYM or inorganic fertilisers, but the stocking rate must not exceed 1.4 LU/ha/yr. If improved grassland is established on coastal grazing marsh and floodplain grassland, it must be managed according to the prescriptions for existing improved grassland within that habitat. 275 (c) If creating semi-improved hay meadows, the use of FYM at a rate not exceeding 10 tonnes/ha every other year is acceptable. Organic based bagged fertilisers may be used in exceptional circumstances. The stocking rate must not exceed 1.0 LU/ha/yr. Close off meadows for at least 8 weeks before mowing. Cut once a year after the date specified by the Project Officer, which will not be before 15 July. If creating semi-improved grazed pasture, do not use FYM or other fertilisers and the stocking rate must not exceed 0.75 LU/ha/yr. For the first 3 years it is essential to take an annual hay crop. (d) Payment Rates Light Grazing on Improved Grassland: Semi-improved Haymeadow: Semi-improved Grazed Pasture: Improved Grazing on Coastal Grazing Marsh and Floodplain Grassland: Grassland Restoration to Enhance Habitats and Features 3.32 Conversion of Improved Grassland to Semi-improved Haymeadow and Grazing Pasture. This option is normally limited to farmed parkland, other traditional landscape or historic sites and land adjacent to wetland and the coast. £95 per ha per yr £165 per ha per yr £210 per ha per yr £220 per ha per yr Environmental Objectives (a) (b) (c) To restore typical native plant species associated with semi-improved grassland habitats by reducing nutrient inputs to improved swards. To reduce the level of nutrient input to existing areas of wildlife habitat, especially wetlands. To enhance the landscape, historic and recreational value of parkland, grazing marsh and the coast. Environmental Justification This measure contributes to the UK Biodiversity Habitat Action Plan targets for a wide range of wetland habitats including marshy grassland, raised bog and reedbeds. It supports UK BAP species such as pipistrelle bat, lesser horseshoe bat, skylark, brown hare and corncrake. This measure contributes to the safeguarding of important landscape features such as parkland, grazing marshes and historic earthworks and to the protection of buried archaeological remains. 276 Prescriptions (a) (b) Do not apply lime, herbicides or pesticides, other than for spot treating notifiable weeds, without the prior approval of the Project Officer. Create semi-improved hay meadows by annual cutting and a stocking rate not exceeding 1.0 LU/ha/yr. The use of FYM at a rate not exceeding 10 tonnes/ha every second year is acceptable, as are light dressings of organic bagged fertilisers where FYM is unavailable. Close off hay meadows 8 weeks before mowing. Cut after the date specified by the Project Officer, which will not be before 1 July. Create semi-improved grazings by taking an annual hay crop in the first 3 years of the agreement and by grazing at a rate not exceeding 0.75 LU/ha/yr [1.0 LU/ha/yr on parkland]. Coastal grazing marsh and floodplain grassland must be grazed at no more than 0.4 LU/ha between 1 April and 15 June. Do not use organic or inorganic fertiliser, including FYM. Do not cultivate or install new drainage works. Where the land is also to be managed for over-wintering wildfowl, the stocking rate must be no more than 0.4 LU/ha between 1 October and 31 March. (c) (d) (e) Payment rates Conversion to Semi-improved Haymeadows: Parkland Other Improved Land Conversion to Semi-improved Grazing Pasture: Parkland Grazing Marsh and Floodplain Grassland: Managed for Breeding Birds Managed for Breeding Birds and Wildfowl Other Improved Land £100 per ha per year £125 per ha per year £160 per ha per year £95 per ha per year £95 per ha per year £160 per ha per year 3.33 Buffer Zones on Improved Land Adjacent to Ponds, Lakes ,Streams and Field Boundary Ditches. Environmental Objectives (a) (b) To encourage the development of a diverse habitat and the growth of native plants along watercourses and around ponds. To enhance the quality of the water by reducing the input of nutrients, sediment and pesticides to water courses and ponds from surrounding farmland. 277 Environmental Justification This measure supports UK Biodiversity Action Plan species such as the water vole, otter, freshwater whiteclawed crayfish, great crested newt and three lobed water-crowfoot. It will help to reduce the risk of pollution to water courses and water surfaces. Prescriptions (a) (b) Manage adjacent land without using any cultivation's, inorganic or organic fertiliser including FYM, within a minimum 6 metre zone from the edge of the water feature. Do not use herbicides or pesticides, other than for spot treating notifiable weeds or lime without the prior approval of the Project Officer. Payment Rates £180 per ha per year (Payment is made on the area of land in the buffer zone, excluding the one and two metre wide strips which are already protected under the Whole Farm Section and under the mandatory prescriptions for Coastal Grazing Marsh and Floodplain Grassland, and excluding the 10 metre wide strips of land adjacent to existing wetland habitats including Marshy Grassland; Blanket and Raised Bogs; and Reedbeds, Swamps and Fens). 3.34 Management of Improved Grassland for Breeding Lapwing and Over- wintering Wildfowl Environmental Objectives (a) (b) To provide suitable conditions for breeding lapwing by creating a short sward (below 5 cm in height) by 15 March each year. To provide suitable conditions for over-wintering wildfowl by creating a short sward (5-10 cm in height) by 1 October each year. Environmental Justification This measure supports UK BAP species of waders and wildfowl such as lapwing, snipe, curlew, wigeon, teal and brent goose. This measure will reduce the level of agricultural inputs on improved grassland and will assist with the rehabilitation or restoration of important habitats which may be adjacent to the improved land. Prescriptions Lapwing Sites which are specified by the Royal Society for Protection of Birds (RSPB) as having 5 pairs or more of lapwings nesting on improved land MUST be entered into agreement. The prescriptions are the same as those set out for the optional management of land for lapwings. 278 Where there are less than 5 pairs of lapwings on improved land, farmers will have the option of entering the land into the scheme. They will also have the option of managing new areas of improved land to encourage breeding lapwings, particularly if the land is in close proximity to existing lapwing sites. [Unimproved or semi-improved land where lapwing are nesting will be managed according to the prescription for the priority habitat concerned. This will normally be to the benefit of lapwing. Occasionally, Project Officers may have to alter the prescriptions slightly to ensure that the nesting lapwing are taken into account.] (a) (b) (c) (d) (e) (f) The sward height must be below 5 cm in height by 15 March each year. The land must be grazed but at a stocking rate of no more than 0.4 LU/ha between 1 April and 15 June, preferably using cattle. There is no restriction on grazing for the remainder of the year. Ensure that any necessary rolling, chain harrowing, the application of pesticide and the spreading of FYM or lime, do not take place between 1 April and 15 June. Inorganic fertilisers may not be applied between 1 February and 15 June. Do not plough, cultivate, re-seed or clear out existing drains without prior approval from the Project Officer. Do not install new drainage. Over-wintering Wildfowl. Suitable for improved grassland already utilised by over-wintering wildfowl, or in close proximity to existing wildfowl roosts. (a) (b) (c) (d) (e) The sward height must be between 5-10 cm in height by 1 October each year. Manage the land by stocking at no more than 0.4 LU/ha between 1 October and 31 March. There is no restriction on grazing for the remainder of the year. Inorganic and organic fertilisers, including FYM and pesticides, may only be applied between 1 April and 30 September. Do not plough, cultivate, reseed or clear existing drains without prior approval from the Project Officer. Do not install new drains. Payment Rates Lapwing: Wildfowl: £160 per ha per year £40 per ha per year 279 3.35 Conversion of Semi-improved Enclosed Grassland to Unimproved Grassland Environmental Objectives To restore the typical species of unimproved grasslands by reducing nutrient levels. Proposals to undertake this option should be located in the vicinity of existing unimproved grasslands wherever possible in order to maximise the benefit from large areas of habitat and existing seed sources. Environmental Justification This measure will contribute to the UK Biodiversity Action Plan targets for unimproved neutral grassland, lowland acid grassland and limestone grassland. It supports UK BAP species such as the skylark, brown hare and corncrake. Prescriptions (a) (b) (c) (d) (e) (f) (g) Do not use any cultivations, inorganic or organic fertilisers or pesticides, other than for spot treating notifiable weeds. Liming is not acceptable on acid or limestone grassland, but may be appropriate on neutral grasslands following approval from the Project Officer. Obtain the agreement of the Project Officer before clearing ditches or carrying out any rolling, chain harrowing or supplementary feeding. Do not burn grassland or install new drainage. Convert semi-improved grazing pasture by taking a hay crop in the first three years of the agreement; it is not acceptable to take a silage crop. Where managed for hay, close off hay meadows for at least 8 weeks before mowing. Cut once a year after the date specified by the Project Officer which will not be before 1 July. Stock at a rate not exceeding 0.75 LU/ha/yr on semi-improved neutral grassland and 0.4 LU/ha/yr on semi-improved acid and limestone grassland. Payment Rates Conversion of Grazed Semi-improved Neutral Grassland to Grazed Unimproved Neutral Grassland: Conversion of Grazed Semi-improved Acid and Limestone Grassland to Grazed Unimproved Acid and Limestone Grassland: Conversion of Semi-improved Haymeadows to Unimproved Haymeadows on Neutral Grassland: Conversion of Semi-improved Haymeadows to Unimproved Haymeadows on Acid and Limestone grassland: £80 per ha per year £95 per ha per year £110 per ha per year £130 per ha per year 280 3.36 Increasing Water Levels on Suitable Habitats and Features This option is only suitable on sites approved by the Environment Agency, where all land managers likely to be affected are in agreement with the proposals, and where no damage would be caused to buried archaeological features. Environmental Objectives (a) (b) To enhance the wildlife value of existing habitats. To conserve buried archaeological features. Environmental Justification This measure will contribute to UK Biodiversity Habitat Action Plan targets for flood plain and coastal grazing marshes, blanket bog, raised bog, reedbed and species rich fens. It provides improved conditions for ground nesting birds and overwintering wildfowl and supports many UK BAP species including lapwing and snipe. This measure may also be used to protect buried archaeological remains from the drying out and oxidation of material of scientific value. This measure conforms with Article 22 of Council Regulation (EEC) 1259/1999. Prescriptions (a) Within 12 months of entering the agreement, prepare and submit to the Project Officer for ratification, the details of a water level management plan together with proposals for its implementation. Such a plan may involve the breaking up of field drains to ensure that the water level can be maintained close to the soil surface throughout the year. On coastal grazing marsh and floodplain grassland identified as being suitable for breeding birds, the aim should be to maintain the water levels within 40 cm of the field surface in summer (mid June to end November), and within 20 cm of the field surface in winter (December to mid March). On grazing marsh and floodplain grassland identified as being suitable for over-wintering wildfowl, water levels should be held at no less than mean field level from 1 December to 15 March. (b) (c) Payment Rates Increasing Water Levels on Improved Land Reverting to Semi- improved Land (under habitat number 3.32): Increasing Water Levels on Marshy Grassland: Increasing Water Levels on Improved Land and Coastal Grazing Marsh and Floodplain Grassland: Managed for Breeding Birds/Lapwing: Managed for Wildfowl: £130 per ha per year £55 per ha per year £80 per ha per year £50 per ha per year 281 Increasing Water Levels on Historic and Archaeological Sites: Increasing Water Levels on Wet Heaths,Bogs, Swamps, Reedbeds and Fens: Establishment of New Habitats 3.37 Broad-leaved Woodland and Scrub £130 per ha per year Capital payments only This measure applies to sites of 0.25 ha or less calculated across the whole farm. Larger schemes will be dealt with as part of the Forestry Commission's Woodland Grant Scheme. Environmental Objectives To enhance landscape character, wildlife value and recreational potential of suitable sites by allowing natural regeneration of native trees and shrubs; new planting, or restocking where appropriate. Environmental Justification This measure will provide valuable habitats for a wide range of plants, animals and birds and will enhance the Welsh landscape in line with the Welsh woodlands Strategy . This measure will contribute to UK Biodiversity Habitat Action Plan targets for a range of woodland species. Prescriptions (a) (b) (c) Fence off and exclude all livestock for the duration of the agreement and agree with the Project Officer a programme for the establishment of woodland. Sites suitable for natural regeneration may be enhanced by scattered plantings of trees and shrubs of local provenance. Manage any new plantings by weeding and replacing any lost trees as necessary. Payment Rates New Broadleaved Woodland and Scrub: Annual Management : £1600/ha single payment £140 ha/yr 282 3.38 Establishment of Streamside Corridors Environmental Objectives (a) (b) (c) To encourage the development of a diverse habitat and the growth of native trees, shrubs and plants alongside stream sides. To encourage the development of cover along stream sides for the benefit of animal species using the watercourse. To enhance the quality of the water by reducing the input of nutrients, sediment and pesticides to watercourses from surrounding farmland. Environmental Justification This measure supports UK Biodiversity Action Plan species such as water vole, otter, white clawed crayfish, great crested newt and three lobed water-crowfoot. It will help to reduce the risk of pollution to water courses. Prescriptions (a) (b) (c) (d) Obtain the agreement of the Project Officer before undertaking work to bankside vegetation. Manage the land without using any lime, inorganic or organic fertilisers including FYM, and without any ploughing, cultivation or drainage works. Do not apply herbicides or pesticides, other than for spot treating notifiable weeds, without prior approval from the Project Officer. Exclude stock until the vegetation has been given opportunity to establish after which light grazing, up to a maximum of 0.1 LU/ha/yr, may be permitted. Payment Rates £310 per ha per year 3.39 Establish New Reedbeds on Farmland This option is only suitable on sites approved by the Environment Agency and where all land managers likely to be affected are in agreement with the proposals. Environmental Objectives (a) (b) To establish new reedbeds on suitable sites. To provide suitable habitats for species such as the sedge warbler and reed warbler. 283 3.41 Establish Heathland on Improved Land Proposals are more likely to be acceptable if they are located adjacent to existing heathland areas and can benefit from existing seed sources. Environmental Objectives To create new areas of heathland on suitable improved grasslands. Environmental Justification This measure contributes to UK Biodiversity Habitat Action Plan targets covering upland heathland and lowland heathland. It supports UK BAP species such as dotterel, skylark, golden plover, hornet robber fly, marsh fritillary butterfly, southern damselfly and black bog ant. Prescriptions (a) (b) (c) (d) Remove turf and scarify soil. Apply heather seed in the form of cut material obtained from a nearby heathland site. Manage the land without the use of lime, insecticides, and inorganic or organic fertilisers including FYM. Notifiable weeds may be spot treated with herbicides. Exclude all stock until the vegetation has established, and then agree with the Project Officer a suitable plan of grazing management. Do not exceed 0.3 LU/ha/yr in lowland and coastal areas, or 0.15 LU/ha/yr in the uplands. Obtain the agreement of the Project Officer before carrying out any burning or cutting of vegetation. Supplementary feeding is not acceptable. (e) (f) Payment Rates £290 per ha per year 3.42 Establish New Saltmarshes on Farmland / 42B New Reedbeds on Grazed Saltmarshes Establishment of new saltmarshes is suitable only on sites approved by the Environment Agency and where all land managers likely to be affected are in agreement with the proposals. Environmental Objectives (a) (b) (c) To provide for the development of new areas of saltmarsh on previously improved land. To create suitable conditions for over-wintering wildfowl, breeding waders and typical plant species of saltmarsh by reducing nutrient levels and raising salt/brackish water levels. To provide for the development of new coastal reedbeds. 284 Environmental Justification This measure will contribute to UK Biodiversity Habitat Action Plan targets for saltmarsh. Prescriptions (a) (b) (c) (d) Provide suitable conditions for tidal flooding by removing existing embankments and sluices. Agree a simple plan of grazing management with the Project Officer. Follow all the management prescriptions for saltmarshes. For new coastal reedbeds, exclude stock for the life of the agreement. Payment Rates Establish New Saltmarshes: Establish New Reedbeds: £230 per ha per year £200 per ha per year 3.43 Establish New Sand Dunes on Improved Farmland Proposals under this option are more likely to be acceptable if located on previously improved land lying downwind of an existing dune system. Environmental Objectives (a) (b) To create new sand dune habitats on previously improved grassland. To restore the typical plant species of sand dunes by reducing nutrient levels and managing grazing patterns. Environmental Justification This measure contributes to UK Biodiversity Action Plan targets for sand dunes, and supports UK BAP species such as sand lizard, natterjack toad and shrill carder beetle. Prescriptions (a) (b) (c) (d) Where necessary, remove existing turf in order to reduce soil nutrient levels. Agree with the Project Officer a suitable time to remove existing fencelines. Graze the newly regenerated vegetation, along with an existing dune system at a rate not exceeding 0.6 LU/ha/yr. Follow all the management prescriptions for sand dunes. Payment Rates £235 per ha per year 285 ADDITIONAL WORKS 9.8.20 The Tir Gofal Scheme makes provision for additional works payments designed to assist with the protection and management of both habitats and features. 9.8.21 Prior to signing a Tir Gofal agreement, participants are obliged to agree a comprehensive 5 year work programme with the Project Officer. This work programme can be extended for a further 5 years once the agreement has reached its mid point review stage. 9.8.22 Most payments are made available at a standard rate per metre or per hectare based on a proportion of the average costs incurred in carrying out the necessary work. In the case of projects where standard rates are inappropriate, such as the restoration of traditional buildings or special projects, agreement holders receive a percentage of the actual costs up to a maximum limit. 9.8.23 Excluding restoration of field boundaries, Additional Works payments are subject to an overall financial ceiling of £20,000 per farm over the 10 year duration of each agreement. Within this amount, there is a provision to impose limits on individual items such as the restoration of traditional buildings where the ceiling is no more than 50% of costs up to a maximum of £10,000 per agreement. 9.8.24 The Additional Works limit of £20,000 per farm can be supplemented by expenditure of up to £3,500 per annum, or £35,000 in total, on field boundary restoration. Additional Works will be paid on an annual basis according to where expenditure falls. SPECIFIC MEASURES Habitat Restoration 9.8.25 A prime objective of the Tir Gofal programme comprises the conservation and positive management of wildlife habitats. Operations such as scrub clearance, bracken control, eradication of invasive species, ditch clearance on wetlands, and restoration burning on heathlands are all necessary, on occasion, to restore habitats to a condition where they can be maintained on a regular basis by cutting or grazing. 9.8.26 In this instance, the purpose of the additional works payments is to cover the costs of restoration work, so that during the remainder of the agreement the habitat can be maintained simply by compliance with the annual management prescriptions. Heather Management: Burning Restoration by Seed & Mulch £105.00 per ha £210.00 per ha £105.00 per ha £10.00 per tree £25.00 per tree Planting Marram Grass/Reeds Restoration Pruning of Orchard Trees Pollarding 286 Environmental Justification This measure will contribute to UK Biodiversity Action Plan target for reedbeds. It will support UK BAP species such as otter water vole aquatic warbler and bittern. Prescriptions (a) Agree with the Project Officer a simple management plan covering work such as the stripping of topsoil and creation of water retentive embankments, installation of sluices, establishment of areas of permanent water, excavation of ditches and any planting of common reed and other wetland species. Exclude all stock for the lifetime of the agreement. (b) Payment Rates £310 per ha per year 3.40 Establish Heathland Vegetation on Acid Grassland and on Maritime Cliff and Slope. This option is available on sites with less than 25% cover of dwarf shrubs such as heather, cross-leaved heath or western gorse. Proposals are more likely to be accepted if they are located in the vicinity of existing heathland areas and can benefit from existing seed sources. Environmental Objectives To restore the typical species of heathland by reducing grazing pressure and by reducing the dominance of species such as purple moor grass, rushes, bracken and cottongrass. Environmental Justification This measure will contribute to UK Biodiversity Habitat Action Plan targets covering upland heathland and lowland heathland. It supports UK BAP species such as dotterel, skylark, golden plover, hornet robber fly, marsh fritillary butterfly, southern damselfly and black bog ant. Prescriptions (a) (b) Reduce stocking levels to no more than 0.05 LU/ha/yr until heather has established (normally for at least five years) and stock thereafter at no more than 0.1 LU/ha/yr. Do not graze between 1 October and 31 March each year. Payment Rates On Acid Grassland: On Maritime Cliff and Slope: £110 per ha per year £70 per ha per year 287 Restoration of Wetland Ditches by Casting Bracken Control: Mechanical Chemical Ground Spraying £2.00 per metre £50.00 per ha £120.00 per ha £55.00 per ha £1500.00 per ha £750.00 per ha £150.00 per ha £100 per ha Rhododendron Control (outside woodlands) Invasive Species Control (Japanese knotweed etc) Scrub Clearance Mechanical By hand Habitat Enhancement 9.8.27 Relatively small additional works projects can greatly enhance many existing habitats for wildlife, either by providing additional shelter, raising water levels on a year round basis, or by ensuring that wild animals, livestock and machinery can move easily around sites without causing undue damage. 9.8.28 Shelter for wildlife can be provided in the form of nest boxes and otter holts. Water level management can be achieved using bunds, sluices, culverts and water gates. Movement of wildlife, livestock and machinery can be facilitated using badger gates, water troughs, piping, grazing marsh bridges and hard surfacing. Bunds and Sluices: Water Troughs Piping for Water Supply Barn Owl Nest Boxes Other Nest Boxes Grazing Marsh Bridge Badger Gate Water Gate Otter Holt Hard Surfacing (to alleviate sedimentation of water features) Hard Surfacing for Feeding Pads (to alleviate sedimentation) Culverts Hard Surfacing for Re-aligning Tracks Soil Timber £35.00 each £140.00 each £100.00 each £0.40 per metre £20.00 each £5.00 each £100.00 each £20.00 each £25.00 each £80.00 each £5.00 per sq metre £100.00 each £100.00 each £5.00 per sq metre 288 Habitat Creation 9.8.29 Whilst annual payments to compensate for the loss of productive agricultural land are available under the optional part of Tir Gofal, additional payments are needed to cover the initial costs of converting improved land into wildlife habitat. Depending on the habitat creation measure being undertaken, there may be a need for turf stripping, reseeding, pond creation or tree planting. Turf Stripping for creating new habitats Provision of species rich seeds mixture Creation of Ponds: Restoration of Ponds Trees and Shrubs (supply and plant) Spiral Rabbit Guards Tree Shelters (1.8m high for cattle) (0.6 m high) up to 100 sq m surface area over 100 sq m surface area £300.00 per ha £150.00 per ha £3.00 per sq metre £0.50 per sq metre £2.25 per sq metre £0.50 each £0.30 each £1.00 each £0.50 each £12.00 each £25.00 each Orchard Tree plus Guard and Stake Parkland Tree Stock Guards Restoration of Historic Features 9.8.30 A substantial proportion of the historic earthworks in Wales are grazed by livestock. Whilst this has the merit of preventing the encroachment of woody shrubs which would damage and obscure the feature, prolonged grazing can cause erosion scars which are damaging to the underlying archaeology. 9.8.31 In this instance, the purpose of the additional works payment is to cover the cost of infilling the erosion scars with suitable materials, together with subsequent returfing. All works are carried out according to the advice provided by qualified archaeologists. Treatment of Eroded Historic Sites Restoration of Traditional Field Boundaries 9.8.32 The purpose of these measures is to restore and enhance the character of the local landscape, including the traditional field pattern with its associated cultural associations. Traditional boundaries are also important for a range of small mammals, birds, invertebrates and plants. 9.8.33 Funding of field boundary works is subject to a maximum of 10 metres per ha of farm per year. In addition there is a scheme expenditure limit for traditional boundaries of £3500 per farm per year. £7.00 per sq metre 289 Hedgerows Dry Stone Walls Supplement for Importing Stone Stone faced Earth Banks Earth Banks Slate fences resetting existing slates and rewiring erection of new slate fence £ 2.00 per metre £18.00 per sq metre £7.50 per sq metre £11.00 per sq metre £3.00 per metre £10 per metre £18 per metre Protective Fencing for Environmental Management 9.8.34 The Tir Gofal management prescriptions frequently set grazing regimes aimed at the conservation and enhancement of the mandatory and optional habitats and features. Fencing for stock control for this purpose is not always needed, nor is it always practical. There are certain situations, however, where fencing is essential in order to the meet management objectives and where there is no economic benefit to the participant. In such cases the Scheme allows for the inclusion of standard payments for a range of fencing and gates. Post and Wire Supplement for Stock Netting Post and Rail Fencing Top Wiring Electric Fencing Rabbit Fencing Gates Softwood Hardwood Softwood Hardwood Softwood Hardwood Softwood Hardwood £1.25 per metre £1.50 per metre £0.50 per metre £9.00 per metre £11.00 per metre £0.60 per metre £1.00 per metre £2.40 per metre £2.60 per metre £110.00 each £160.00 each Traditional Farm Buildings 9.8.35 Many traditional buildings are of great historic, cultural and landscape significance. Tir Gofal payments are available to cover the costs of restoration on the basis of 50% costs up to a ceiling of £10,000 per agreement. Three quotations must be obtained before CCW can approve the commencement of any works. Restoration must be carried out using appropriate traditional materials and techniques. Project specifications and approvals are developed and granted in consultation with appropriate specialists in order to ensure value for money. 290 Special Projects 9.8.36 Whilst the Tir Gofal additional payments programme is designed to be as comprehensive as possible, there is a need for a special projects category to cover any unforeseen eventualities. Special projects identified in the first year of the programme include pest control on lapwing breeding sites; heather cutting in areas where restoration burning is too risky; and the creation of suitable facilities for the provision of environmental education. It is anticipated that additional projects will be identified in future years. All special projects forming part of an agreement will be notified to the Commission in accordance with the previous State Aid approval granted on 25th October 1999. 9.8.37 The Tir Gofal Scheme makes provision for additional works payments designed to assist with the protection and management of both habitats and features (Works designed to enhance new public access form part of the RDP Article 33 measures, but are referred to here on the basis that their delivery is fully integrated with the agri-environment programme). Prior to signing a Tir Gofal agreement, participants are obliged to agree a comprehensive 5 year work programme with the Project Officer. This work programme can be extended for a further 5 years once the agreement has reached its mid point review stage. 9.8.38 Most payments are made available at a standard rate per metre or per hectare based on a proportion of the average costs of carrying out the necessary work. In the case of projects where standard rates are inappropriate, such as the restoration of traditional buildings or special projects, agreement holders receive a percentage of the actual costs up to a maximum limit. Support is delivered using one-off payments, which are released once the relevant works are completed. 9.8.39 Excluding repair of field boundaries, Additional Works payments are subject to an overall financial ceiling of £20,000 per farm over the 10 year duration of each agreement. Within this amount, there is a provision to impose limits on individual items such as the restoration of traditional buildings where the ceiling is no more than 50% of costs up to a maximum of £10,000 per agreement. 9.8.40 The Additional Works limit of £20,000 per farm can be supplemented by expenditure of up to £3,500 per annum, or £35,000 total, on field boundary restoration. Administration 9.8.41 The scheme is administered by the Countryside Council for Wales on behalf of the National Assembly. The Countryside Council has established partnerships with the Farming and Rural Conservation Agency and the Snowdonia National Park Authority, covering matters such as the secondment of field staff and the provision of technical services including mapping and cross compliance checks. 9.8.42 Full details of all of the administrative arrangements are shown in the Control Plan attached at Annex 1. This includes details of operational controls, payment controls, compliance monitoring systems and penalties. Aid Intensity 9.8.43 The amounts of aid vary according to the numerous management options or operations; these are expressed in £ sterling and set out in the measure (details of the calculations and the percentage of 291 income foregone these represent are in Annex 2). In the event of a rate per hectare per year (calculated across the entire holding) which exceeds 450 the additional payment will be provided as state aid. Typically, the aid amounts represent 80% of income foregone. Generally these amounts will not exceed 100% of income foregone but for some management options or operations an incentive payment will be provided up to a limit of 120% of the income foregone calculated for the item concerned. Community contribution 9.8.44 The Community contribution will be 75% of public cost in the Objective 1 region and 50% in other areas. Exceptions referred to in Article 37 (3) subparagraph 2 first indent of 1257/1999 9.8.45 No exceptions, as defined under Article 37 (3) of Regulation 1257/1999, are being sought. Eligibility Conditions 9.8.46 In order to be eligible to join Tir Gofal, participants must be able to meet the following conditions: ! Management agreements can only be made on land which the applicant has control over for a minimum of 10 years from the date the agreement comes into force. This land must be within the boundary of Wales. Land which is outside the area is not eligible even if it is attached to a holding partly within the boundaries. Where part of the land is situated in England the farmer/land manager should be encouraged to enter this land into a suitable agri-environment scheme in England. The farm must be at least 3 hectares. Tir Gofal is a whole-farm scheme and farmers are required to enter all the land they farm within the boundary of Wales. Where an area is receiving grant from another agency such as CADW (Welsh Historic Monuments), the area will be excluded from the agreement. Also where an agreement with another agency lapses during the life of the Tir Gofal agreement and is not renewed, e.g. Countryside Council for Wales, CADW (Welsh Historic Monuments), or the Forestry Authority, the agreement holder must offer the area for entry into Tir Gofal. The applicant can operate a full or part-time holding. In addition, bodies not normally considered to be operating an agricultural business, but which are responsible for the agricultural management of land may apply. These include voluntary conservation bodies (e.g. Wildlife Trusts where land under their control is farmed). If control over the "normal management" of the land is shared (e.g. between landlord and tenant), all those who have control over matters to which the Tir Gofal prescriptions relate should be parties to the application. Entry of land into the Tir Gofal Scheme is voluntary and acceptance depends upon the Countryside Council for Wales being satisfied that the requirements of the scheme will be met for the duration of the 10 years of the agreement. ! ! ! ! ! 292 Tir Gofal and good farming practice 9.8.47 All participants in Tir Gofal must adhere to the provisions set out in Section 9.1. Description of ongoing contracts from previous period 9.8.48 The previous agri-environment schemes, namely the Environmentally Sensitive Areas Scheme, the Habitat Scheme, Tir Cymen, the Moorland Scheme and the Countryside Access Scheme are described below: The Environmentally Sensitive Area Scheme (ESAs), was launched by Welsh Office Agriculture Department (WOAD) in Wales in the Cambrian Mountains and Lleyn Peninsula in 1987 on a part farm basis. The whole farm schemes in Radnor and Ynys Môn were introduced in 1993 followed by similar schemes for Cambrian Mountains Extension area, Lleyn Peninsula, Preseli and Clwydian Range in 1994. The original Cambrian Mountains ESA was relaunched as a whole farm scheme in 1995. ESA's were voluntary, whole farm schemes, available to farmers within the designated areas. The schemes were designed to protect areas of Wales where traditional farming methods had created distinct and valuable landscapes supporting a range of interesting and important wildlife habitats. ESA's provided support for the continuation of these traditional farming practices in order to protect and enhance the local environment. The Cambrian Mountains Original, Ynys Môn, Radnor, and Clwydian Range ESA Schemes were approved by the European Commission Star Committee on 26 May 1994 (EC Decision C(94) 1876) and the Cambrian Mountains Extension and Lleyn Peninsula ESA Schemes were approved on 27 October 1994 (EC Decision C(94) 2608). The EC State Aid details are: Conservation Plans (UK) 452/92 Doc No. 35375; Conservation (UK) 63/93 Doc No. 5097; Conservation Plans (UK) 155/94 Doc No. 5534; New Conservation Plans (UK) 145/94 Doc No. 031523 and Amendments to Conservation Plan 535/95 Doc No. 10982. These schemes were designed to promote the aims contained in Article 1(a), (b), (c), (e) and (f) of Regulation (EEC) 2078/92. The Habitat Scheme, was launched by the Welsh Office in 1995. The aim of the scheme was to protect and enhance the wildlife value of specifically important habitats in Wales. The part farm scheme was voluntary and available to farmers throughout the whole of Wales. Any part of enclosed eligible farmland could be entered into the scheme, if assessed as able to achieve the environmental benefits within the ten-year life of the scheme. The scheme related to the four habitats of the greatest importance throughout Wales: broad-leaved woodland, species rich grassland, water fringe and coastal belt. The Scheme was approved by the Star Committee on 25/26 July 1994 (EC Decision C(94) 2487). These schemes were designed to promote the aims contained in Article 1(a), (b), (c), (e) and (f) of Regulation (EEC) 2078/92. The Moorland Scheme, was introduced in England and Wales in 1995. Its purpose was to protect and improve moorland areas, primarily through stocking rate reductions. The scheme was voluntary and eligible farmers had to be within the moorland area identified on the 1992 Moorland Map of England and Wales. The Moorland Scheme was designed to protect moorland areas that have no protection under other agri-environment schemes. It operated by setting maximum permissible winter and summer stocking rates on grass moorland and heather moorland. In addition, a plan of action of moorland management must be agreed. The Scheme was approved by the Star Committee on 23 November 1994 (EC Decision C(94) 2951). These schemes were designed to promote the aims contained in Article 1(a), (b), (c), (e) and (f) of Regulation (EEC) 2078/92. 293 The Countryside Access Scheme, offers payments for additional permissive access to areas entered into the guaranteed set aside option of the Arable Area Payments Scheme (AAPS). The Scheme was approved by the Star Committee on 25/26 July 1994 (EC Decision C(94) 1875). These schemes were designed to promote the aims contained in Article 1(a), (b), (c), (e) and (f) of Regulation (EEC) 2078/92. The Tir Cymen Scheme was launched in 1992 by the Countryside Council for Wales. The scheme was designed to combine good farming practice with the conservation of semi-natural habitats, to encourage the integration of development, landscape conservation, protection of archaeological features and recreation. It was a voluntary whole farm scheme, available to farmers within the three pilot areas of Meirionnydd, Dinefwr and Swansea. The Scheme was approved by the Star Committee on 28 September 1994 (EC Decision C(94) 2489). The State Aid number is 439/92 Doc No. 12189. The Tir Cymen Scheme was set up by, and is run by, the Countryside Council for Wales as a pilot programme and also operates under Regulation (EEC) 2078/92. 9.8.49 The following table shows the total number of live agreements and the areas protected by the previous schemes. Environmentally Sensitive Area Scheme No of Whole Farm SemiAgreements Total Area natural under habitat agreement (mandatory) (mandatory) 2,219 166,749 65,697 Seminatural habitat (optional) 14,070 Creation of Field semiboundaries natural (metres) habitat (optional) (optional) 1,011 270,483 Public Access (km) (optional) 16 Hectares under agreement Habitat Scheme No of Total area Agreements under agreement 860 6,880 Water Fringe 101 Broadleaved woodland 1,067 Species rich grassland 5,331 Coastal Coastal belt belt Improved unimproved 39 342 Hectares under agreement Moorland Scheme No of Agreements Total area under agreement (hectares) 623 No of ewes removed 16 2,937 294 9.8.50 The following table shows the estimated financial commitment to these schemes over the next 7 years. £million 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 7.50 0.80 0.08 5.54 0.00 13.92 7.50 0.80 0.05 5.40 0.00 13.75 7.50 0.80 0.04 5.40 0.00 13.74 7.50 0.80 0.01 4.86 0.00 13.17 6.50 0.80 0.00 4.37 0.00 11.67 4.50 0.80 0.00 3.94 0.00 9.24 3.00 0.80 0.00 3.54 0.00 7.34 million Scheme Environmentally Sensitive Areas Habitat Scheme Moorland Scheme Tir Cymen Countryside Access Scheme Total Justification for scheme 9.8.51 As a whole farm scheme, Tir Gofal ensures a minimum standard of environmental care on every participating farm. This is a significant advance on part farm schemes, where public finance used to reward beneficial management in one area could theoretically be used to fund the intensification of other land on the same farm. 9.8.52 Tir Gofal has the potential to operate at a broad scale across the full range of agricultural sectors and natural features that contribute to the diversity of the Welsh countryside. This ability to operate at such a large scale is of critical importance to the farming community as well as to the Welsh environment. The broad coverage of the scheme, together with the use of carefully chosen management categories, ensures Tir Gofal has a significant role to play in contributing to the targets set out in the UK Biodiversity Action Plan. 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 11.70 1.25 0.13 8.64 0.00 21.72 11.70 1.25 0.08 8.42 0.00 21.45 11.70 1.25 0.06 8.42 0.00 21.43 11.70 1.25 0.02 7.58 0.00 20.55 10.14 1.25 0.00 6.82 0.00 18.21 7.02 1.25 0.00 6.14 0.00 14.41 4.68 1.25 0.00 5.52 0.00 11.45 Scheme Environmentally Sensitive Areas Habitat Scheme Moorland Scheme Tir Cymen Countryside Access Scheme Total 295 9.8.53 Each of the priority habitat categories is designed to ensure that existing habitats are not just protected, but are brought into sustainable management. As a general principle, the individual prescriptions require a reduction in agricultural inputs and a level of grazing that is sufficient to maintain the habitat in good condition. Additional works payments are available to ensure fencing and gates are of sufficient standard to ensure compliance with the management prescriptions for the habitat. 9.8.54 The purpose of the voluntary prescriptions is to ensure that the scheme can assist with the restoration of habitats where this will bring about particular environmental benefits. Arable land prescriptions have been included in Tir Gofal to encourage the use of less intensive cropping regimes on existing arable land as well as to persuade at least some farmers to reintroduce an element of arable farming. In the past, when farms had to be more self sufficient for winter fodder for stock, some arable farming took place on most Welsh farms. The decline of arable land has resulted in the serious decline of many species of farmland birds, plants and insects. 9.8.55 An additional aim is to achieve the restoration of species-rich grasslands in the Welsh countryside. A range of measures is available, including the elimination of fertiliser use on semi-improved and improved grassland, the creation of buffer zones adjacent to watercourses and the better management of improved grassland for both lapwing and wildfowl. Particular emphasis will be given to the creation of new links between existing habitats in order to benefit farmland birds and invertebrates such as marsh fritillary butterfly. 9.8.56 A number of options are available including the planting of new woodland, the re-establishment of heathland, the creation of streamside corridors and the raising of water levels on existing habitats, such as grazing marsh, as well as on improved grassland. 9.8.57 Agreement holders may undertake restoration work on a combination of hedgerows, walls, slate fences and earth banks, but must follow all of the requirements of the Whole Farm Section where existing traditional boundaries are already stock proof. Elsewhere on the holding, capital payments are available for coppicing, hedgelaying, planting and protective fencing as well as the gapping up and rebuilding of stone walls, slate fences and earth banks. Historic features, such as earthworks or buried archaeological remains, can be enhanced, through the conversion of arable land to less intensively managed grassland and the raising of water levels where appropriate. 9.8.58 As part of the mandatory Whole Farm Section, farmers must allow access to all unenclosed moorland, heathland and grassland. Access is limited to walkers, who may bring dogs on leads. Tir Gofal can also be used to create new opportunities for the use of enclosed land by walkers, horse riders, cyclists, people with disabilities or educational groups. Impact on breeds of farm animal in danger of extinction 9.8.59 There is no measure for endangered farm animals included within Tir Gofal. 296 Impact on plant genetic resources under threat of genetic erosion 9.8.60 The "Environmental Objectives" of Tir Gofal aim to protect and enhance the important wildlife habitats, which occur throughout Wales, and the species associated with them. The prescriptions are designed for the achievement of the objectives, which would in itself provide an environmental justification for the expenditure on the particular measure. 9.8.61 However, the environmental justification section under each habitat goes further. By providing the conditions suitable for the protection and improvement of the habitat, the scheme will also help in the conservation of the key habitats and species listed in the UK Biodiversity Action Plan (BAP) and the EC Habitats Directive. We feel that this is a function of the scheme which is sufficiently important to merit special mention as an environmental justification for including the particular habitat. The species referred to in the "Environmental Justification" are only those specifically included in the UK BAP. We felt that the "Objectives" should quote a broader range of species to demonstrate that the scheme has an interest in species that are of conservation concern throughout Wales, even though they may not be listed in the UK BAP. 9.8.62 The monitoring and evaluation strategies will focus on the habitats and species in the 'Environmental Objectives', although it is not necessarily the case that each of the species listed will be monitored in detail. 9.8.63 It is difficult to prepare precise targets for particular types of land or habitats bearing in mind that the scheme is voluntary, but, based on the first year's round of applications we have projected outputs for each habitat. A summary of these is estimated in the table below. Measure Whole farm section Priority habitats Optional habitats Hedgerows Walls and earth banks New linear access Access areas Obligations on participants 9.8.64 All participants in Tir Gofal must agree to the following: ! Area (ha) or Length (km/m) 64,800 ha 26,600 ha 4,380 ha 200,000m 40,000 m 80 km 200 ha comply with the environmental requirements of the whole farm section as well as those of the mandatory habitat management section. include such additional management features, habitat restoration and/or permissive access in their agreements to ensure that they meet the minimum standard for applications. ! 297 ! ! ! ! ! a 10 year agreement with a break clause after 5 years. manage their land in accordance with an agreed management plan. carry out the additional works described in the management plan within the periods specified. permit duly authorised officers to enter the farm and to inspect it at all reasonable times. notify the Countryside Council in writing within 3 months of any change of occupation or ownership of the farm. supply the Countryside Council on request with details of any sums received from any other body. hold an adequate policy of public liability and third party insurance to cover all third party liability arising as a result of their Tir Gofal agreement. ensure that the terms of any grazing or similar licence granted throughout the term of the agreement will be compatible with the terms of the agreement. make available any books of records, accounts, receipts of other data relating to any works of management conservation or capital works for the purpose of verifying that the terms of the agreement are being complied with. ! ! ! ! The 5 Year Break Clause 9.8.65 Agreements are expected to last for the full ten years. However, there is a break clause at five years which allows either party to terminate the agreement without financial penalty. Participants wishing to withdraw from Tir Gofal must give the Countryside Council written notice two months before the fifth anniversary of the signing of the agreement. The Countryside Council will also give at least two months notice of their intention to terminate an agreement. Adjustments to Agreements 9.8.66 Agreements can be upgraded to include additional voluntary options for habitat creation or enhancement. However, in most cases the upgrading must take place on the anniversary of the original signing of the agreement, in order to fit in with the annual payment cycle. The participant must apply in writing for the consideration of additional management options. 9.8.67 The agreement cannot be altered to remove management options unless exceptional circumstances make it impossible for the participant to carry out the management originally agreed. 9.8.68 In exceptional circumstances the Countryside Council may give the participant written permission to modify one or more of the requirements of the Management Agreement for a specified time. If the participant fails to comply with the Management Agreement without having sought prior approval, the Countryside Council will apply financial penalties proportionate to the offence. If there are circumstances which limit the participant's ability to carry out the agreed Management Plan, the participant must notify 298 the Countryside Council as soon as possible. The Countryside Council will attempt to find a solution, which will not result in a significant failure to meet the objectives of the Management Agreement. Operation of Tir Gofal in areas such as National Parks 9.8.69 The National Park Authority will provide the Countryside Council for Wales with a location map showing boundaries of all areas where management agreements have been negotiated. Where this shows that a Tir Gofal application is already subject to a National Park management agreement, arrangements will be made to have the exact details of the agreement forwarded to the Countryside Council for Wales. 9.8.70 Where dual funding is considered to be a possibility as a result of the farmer already complying with higher environmental management prescriptions, the National Parks Authority and Countryside Council for Wales will look to formulate a Tir Gofal agreement without compromising either agreement it is anticipated that this will often result in the areas subject to the National Parks agreement being excluded from Tir Gofal. Tir Gofal and Natura 2000 9.8.71 All applications will be appraised according to the potential environmental benefit they are able to offer. Scarce and threatened habitats such as those found on Natura 2000 sites will be given a high environmental weighting. This will ensure that a high level of priority is given to Natura 2000 sites within the selection process without the need specifically to enhance the appraisal system to take account of the presence of designated sites. Scheme Payments 9.8.72 The payment premia for Tir Gofal relate only to income foregone, management costs and in some instances an incentive element to encourage uptake. The rates do not contain any element aimed at providing an unwarranted income aid. 9.8.73 In most situations, farmers will be required to reduce the stock numbers on their holding, with a consequential effect on profitability. The scheme payments are intended to compensate for this profit foregone. 9.8.74 In situations where current stocking levels are environmentally acceptable, the payments are designed to compensate for the potential loss of production that could be derived from intensification. Conversely, farms that are stocked above the baseline set during the payment calculations will suffer an actual loss of income (not fully compensated by the payments) on entering the scheme. 9.8.75 The scheme also seeks to encourage farmers to adopt environmentally friendly management practices, which may involve a labour input, e.g. restoring hedgerows or stone faced banks. The payments are to compensate for, or to contribute to, the cost of such work. 9.8.76 The gross margins given in the Tir Gofal Costings at Annex 2 are based on the performance of a 299 competent producer using published survey data. The payment levels are set at 80% of income foregone in most cases, in order to reflect the productivity of an average producer in Wales, and so to avoid overcompensation. 9.8.77 The following payments will be made: ! ! ! Annual payments per hectare for certain parts of the Whole Farm Section; Annual payments per hectare for the protection and management of both habitats and features; Annual payments per metre and per hectare for the provision and management of new public access to the countryside; Additional Works payments are available to cover specific projects necessary for the management of both habitats and features. ! 9.8.78 In order to obtain the overall payment rate per hectare on each agreement for the purposes of cofinancing and to respect the maximum rate of reimbursement of 450 euros per hectare, payments will be aggregated over the holding before being divided by the total area of the farm to obtain an annual payment rate per hectare. 9.8.79 Full details of the starting assumptions, income foregone, management costs and payment rates for the Whole Farm Section, priority habitats, optional habitats and features, together with similar details for Additional Works are shown in Annex 2. 9.8.80 Full details of the starting assumptions, income foregone, management costs and payment rates for the Additional Works are also shown in Annex 2. Compliance Monitoring 9.8.81 The Countryside Council for Wales will organise and carry out a programme of whole farm field checks to determine compliance with scheme conditions. They will work from a checklist of items and will inspect at least 10% of participants each year. Additional checks will be made on receipt of claims for any additional work. Ecological and Performance Monitoring 9.8.82 Performance indicators are being set for each farm in the scheme according to the habitat and other environmental priorities on the holding. Details of progress towards desired environmental outcomes will be monitored at four year intervals by independent monitors appointed by the National Assembly. 300 Relationship with other agri-environment schemes 9.8.83 Tir Gofal was designed as the single national scheme in order to achieve such coherence as compared to the past and there is coherence with the Organic Farming Scheme. The following rules will apply to farmers who apply to join Tir Gofal and are already participating in one of the existing agrienvironment schemes: a. The Environmentally Sensitive Area Scheme Farmers who have land outside of the ESA area are entitled to enter all of their land into Tir Gofal. On entry into the new undertaking, the original undertaking must be terminated. By contrast, those farmers whose entire holding is already subject to the terms of the ESA are obliged to wait until the 5 year break clause in their undertaking takes effect before they can enter into the all Wales scheme. b. Tir Cymen Farmers who have land outside of the Tir Cymen area are entitled to enter all of their land into Tir Gofal. On entry into the new undertaking, the original undertaking must be terminated. By contrast, those farmers whose entire holding is already subject to the terms of Tir Cymen are obliged to wait until the end of their 10 year undertaking before they can enter into the all Wales scheme. c. The Habitat Scheme Farmers have a part farm agreement and are entitled to put all of their land forward for entry into Tir Gofal. On entry into the new undertaking, the original undertaking must be terminated. d. The Organic Farming Scheme Those farmers who choose to enter Tir Gofal will have their agri-environment payments reduced in order to take account of the fact that they are already delivering some of the Tir Gofal measures, in particular those that relate to use of pesticides. e. The Woodland Grant Scheme (WGS) Farmers who choose to enter Tir Gofal will be able to receive the basic whole farm section payments, but will not be entitled to any payments in relation to stock exclusion/silvicultural management since these items are already covered by their existing undertakings. Detailed liaison procedures have been developed by CCW and the Forestry Commission, in order that the WGS and Tir Gofal can integrated as closely as possible. 301 ORGANIC FARMING SCHEME Background 9.8.84 Organic farming has expanded rapidly across Western Europe over the last five years, with an increase of 70% of land area in organic production since the implementation in 1993 of Regulation 2092/91. This increase is variable from country to country, possibly reflecting the individual support packages tailored by the countries concerned under EC Regulation 2078/1992. 9.8.85 The market for organically produced food in the United Kingdom has grown from a retail sales value of £92 million in 1992 to an estimated £260 million in 1997. The largest share was taken by fruit and vegetables (54%), followed by cereals (14%), dairy (7%), and meat (5%). Although the growth has not matched the predictions of the early 1990's, the market has grown particularly in the last two years. Mintel's report in 1997 forecasts further growth to a total of £359m by the year 2000 ( an increase of 38%). 9.8.86 Growth in organic production is also increasing in line with the increases in organically farmed land. By 2001, using 1997 as the start point, it is estimated that organic production of milk will increase by 60%, beef, lamb and pigmeat by more than 70%, horticultural crops by just under 70% and arable crops by 39%. Acreage, Number of Producers and Regional Distribution 9.8.87 By the end of 1997 there were over 100,000 hectares managed organically in the UK (Figure 13). This represents 0.5% of the total agricultural area. This comprised of nearly 45,000 hectares, which had completed the conversion period and had gained full organic status. The remaining 60,000 hectares was classed as in-conversion and as such produce from this area could not be marketed as organic. Preliminary estimates suggest that more than 200,000 hectares may have been in conversion or fully organic by the end of 1998. Figure 13 Growth in land area managed organically during 1997 110000 100000 90000 80000 70000 60000 50000 40000 30000 20000 10000 0 02 Jul 97 18 Apr 97 26 Feb 97 03 Jun 97 01 Oct 97 01 Aug 97 21 May 97 03 Nov 97 01 Sep 97 09 Dec 97 05 Jan 98 Conversion (Ha) Organic (Ha) 302 Hectares 9.8.88 The land area in the UK with full organic status rose steadily during 1997. There was an 18% increase for the period February 1997 to January 1998. The land area in conversion rose by over 350% in the same period. The large area of land entering the organic conversion period during 1997 meant that by January 1998 nearly 60% of the land managed organically in the UK was classed as in-conversion. 9.8.89 The rate of growth in land area is mirrored by the increased number of farmers managing some or all of their land organically. During 1997 the number of licensed organic farmers rose from 794 to 1,027 representing a 30% increase (Figure 14). Figure 14 Growth in the number of organic farmers in the UK during 1997 1050 1000 Number of Farmers 950 900 850 800 750 700 27 Jan 97 18 Apr 97 1 Aug 97 3 Jun 97 2 Jul 97 21 May 97 26 Feb 97 1 Sep 97 3 Nov 97 Organic Arable and Crop Production 9.8.90 Land in conversion to organic status is not eligible to produce organic crops; it is often down to grass or a similar crop. 9.8.91 In 1997 some 75% of the 44,992 hectares classed as organic was in grassland with the remaining 25% subject to arable cropping with a preponderance of wheat followed by oats and barley. Organic Vegetable Production 9.8.92 Over 2,400 hectares of organic vegetables were grown in 1997 in the UK. Within Wales potatoes and other root crops are the leading categories of production followed by green vegetables such as cabbage and cauliflower. Salads and other market garden crops are also produced in some volume even outside of the traditional early production areas. Many livestock and/or dairy farms consider diversification into vegetable production when commencing organic production. Gross returns per hectare for horticulture considerably exceed those obtainable from conventional livestock farming and can significantly enhance the visibility of smaller farm units. 9 Dec 97 5 Jan 98 1 Oct 97 303 Organic Milk Production 9.8.93 In 1997 it is estimated that there were in excess of 4,600 organically managed dairy cows. The total milk yield was in the region of 23 million litres. Some of this was sold raw ex-farm but some will have been processed into added value products. Organic Livestock Production 9.8.94 Over 75% of the land classed as organic in 1997 was down to grassland. This land plus an additional area of arable land used to grow fodder crops was utilised directly by livestock. The organic farming standards do permit non-organic livestock to graze organic land, this land was therefore not grazed exclusively by organic stock. Only beef, lamb and pork from organically managed breeding stock can be marketed as organic. Organic meat 9.8.95 In 1997 over 3,400 finished cattle were marketed as organic. Assuming an average farm gate price of £2.20 per kilogram deadweight, the total value for cattle sold in 1997 was £1.96m (Table 34). Similarly the total market value for organic lamb, assuming an average price of £2.60 per kilogram deadweight, was £1.04m, and for pork (£1.90 per kilogram deadweight) it was £0.96m. Table 34 Product Beef Lamb Pork Production Of Organic Beef, Lamb And Pork In 1997 No. of Animals 3424 22823 7190 Value £m 1.96 1.04 0.96 9.8.96 The Welsh organic food sector is small but dynamic with the potential for considerable growth. Substantial interest has been expressed in conversion over the last three years especially with the introduction in October 1999 of increased payments under the Organic Farming Scheme, to replace and enhance the assistance previously available through the Organic Aid Scheme. 9.8.97 As farm incomes continue to fall in the core livestock enterprises, organic farming can be seen as one way of meeting the increasing environmental demands on the Welsh countryside while providing an economic return for commodities favoured by consumers. Scheme Details 9.8.98 The Organic Farming Scheme (OFS) offers payments to farmers in Wales to aid them in converting to organic farming and to manage their land in some additional environmentally beneficial ways. 9.8.99 The Scheme seeks to increase the area devoted to organic farming in Wales. Organic farming seeks to work with natural processes, using methods which are designed to achieve a sustainable production 304 system with limited use of external inputs. The potential for pollution and other environmental damage is lessened as organic farming avoids the use of artificial fertilisers and synthetic pesticides. Instead it emphasises the role of crop rotation in helping to maintain soil fertility and to combat pest and disease problems and relies on the use of fertility-building crops and natural fertilisers, such as animal manure. The Scheme will play a valuable role in helping to protect and enhance the rural environment, as well as assisting producers to meet consumer demand for organic produce. Standards for organic farming 9.8.100 For food to be sold as 'organic' it is necessary for it to be produced in accordance with certain specified minimum standards. In the UK, standards for organic production are set by the United Kingdom Register of Organic Food Standards (UKROFS). They include standards for organic livestock production. For crops, these standards are set in accordance with the EC rules set down by EC Regulation 2092/1991. EC standards for organic livestock production have been established under Regulation 1804/1999 and the domestic legislation necessary to introduce the standards in the UK is currently being drafted and, where necessary, an amendment will be made to the Scheme Regulations in order to incorporate revisions. The Scheme also includes environmental conditions, which apply to all land which is organic or under conversion. 9.8.101 Entry to the Scheme is entirely voluntary and involves farmers registering their land and agreeing a conversion plan with an approved organic sector body or UKROFS. Agreements under the Scheme last for a minimum of five years and can be for up to ten years depending upon the plans for conversion. 9.8.102 Conversion should normally be considered on a whole farm basis, although it is possible to convert only part of a farm as long as the converted area can be regarded as a sustainable organic unit in its own right. Phasing the conversion of a farm can reduce loss of income in the first years of conversion. Aid Intensity 9.8.103 The amounts of aid vary according to the type of land, these are expressed in £ sterling and set out in Annex 4. In the event of a rate per hectare per year (calculated across the entire holding) which exceeds 450, the additional payment will be provided as state aid. The aid amounts represent between 100% of income foregone on AAPS land and 60% on unenclosed land. Community contribution 9.8.104 The Community contribution will be 75% of public cost in the Objective 1 region and 50% in other areas. Exceptions referred to in Article 37 (3) subparagraph 2 first indent of 1257/99 9.8.105 No exceptions, as defined under Article 37 (3) of Regulation 1257/1999, are being sought. 305 Eligibility conditions 9.8.106 Eligible applicants include owner-occupiers and tenants, although partnerships and share farming can be considered. Where transfer of a holding takes place, the new owners/tenants are not obliged to take on the agreement. However, if the agreement is not transferred, the original agreement holder may be liable to repay previous aid payments. 9.8.107 Eligible land includes that which is not already converted to organic production, and which is being used for agriculture. 9.8.108 Applications must be for a minimum of one hectare. Payment will be restricted to 300 hectares on AAPS eligible land, permanent crops and enclosed land but there is no maximum limit on unenclosed land and grazed woodland. 9.8.109 Applicants must have agreed a conversion plan and have registered the land as "in conversion" with an approved sector body before applying to join the Scheme. An application to join the scheme must be made within three months of obtaining a certificate of registration from the approved sector body. 9.8.110 Applicants are required to notify any statutory designations, and ensure that any obligations for such designations are met. This also applies to any tenancy obligations. The Organic Farming Scheme and good farming practice 9.8.111 All participants in the Organic Farming Scheme will have to adhere to the new Codes of Practice. Description of ongoing contracts from previous period 9.8.112 The previous scheme was called the Organic Aid Scheme. This was set up to help those farmers who wish to convert land to organic production. The Organic Aid Scheme was available across the whole of Wales and provided advice and payments to aid conversion of the land to organic status. The Scheme was approved by the Star Committee on 26 May 1994. These schemes were designed to promote the aims contained in Article 1(a), (b), (c), (e) and (f) of Regulation (EEC) 2078/92. 9.8.113 The following table shows the total number of live agreements and the total area being converted to organic production under the Organic Aid Scheme. Organic Aid Scheme Number of Agreements 61 Total area under agreement (hectares) 2,355 306 9.8.114 The following table shows the estimated on-going financial commitment to this scheme over the next 7 years. £'000 2000-01 60 2001-02 42 2002-03 30 2003-04 12 2004-05 12 2005-06 0 2006-07 0 Justification for scheme 9.8.115 It is accepted that organic production can deliver environmental benefit, the most important being the virtual absence of pesticides, protection of the soil and landscape and the impact on bio-diversity. Our aim therefore is to encourage a significant increase in the number of farmers converting to organic production. However, uptake of the Organic Aid Scheme was very low - just 61 participants in 5 years. A review of the Organic Aid Scheme in 1997 concluded that the rates of aid and the structure of the scheme should be amended to conform more closely with income foregone in order to encourage a greater uptake. At the same time the review recommended that new obligations should be introduced to achieve greater environmental benefits. The Organic Farming Scheme is based on the findings and recommendations of the 1997 review. Impact on breeds of farm animal in danger of extinction 9.8.116 There is no measure for endangered farm animals included with the Organic Farming Scheme. Impact on plant genetic resources under threat of genetic erosion 9.8.117 Although no specific expenditure has been allocated within the scheme in respect of endangered species or genetic erosion, we anticipate that the virtual absence of pesticide use will allow more plants and invertebrates to flourish which in turn provide food sources for birds and mammals. The soil micro flora and fauna are also likely to be enhanced by organic practices. The scheme's impact on genetic resources under threat of erosion will be assessed through an ecological monitoring programme to be carried out within the next two years. Compliance Monitoring 9.8.118 Each participant will be visited at least once during the life of their agreement by a Project Officer working on behalf of the National Assembly for Wales. In addition, inspectors from the approved sector bodies or UKROFS will visit each holding at least once a year in order to check that participants are meeting the necessary organic farming standards. Ecological and Performance Monitoring 9.8.119 We will be undertaking a full ecological review of the impacts of the scheme within the next 2 years. This will be carried out by independent monitors appointed by the National Assembly. 307 Relationship with other schemes 9.8.120 Land which is already entered into the Organic Aid Scheme is not eligible for the Organic Farming Scheme. 9.8.121 The Organic Farming Scheme can be combined with other agri-environment schemes provided the conditions of both schemes can be fulfilled and dual funding avoided. Where dual funding cannot be avoided, e.g. in some elements of Tir Gofal, ESA's, Tir Cymen or Habitat schemes, OFS payments are reduced accordingly. 9.8.122 Where land entered into the Organic Farming Scheme is already subject to another scheme or agreement that pays for the same environmental prescriptions the annual Organic Farming Scheme payment will be reduced accordingly. How this will work is explained below, though there will be no reductions to the payment rates for "Unenclosed Land" or to the lump sum payments. Whole Farm Section of Tir Gofal, Tir Cymen and Tier 1 of ESAs 9.8.123 The environmental management prescriptions of the OFS duplicate some 50 % of the prescriptions included in the whole farm codes of the above named agri-environment schemes. To reflect this, where a farmer already holds a Tir Gofal, ESA or Tir Cymen agreement, payments under the OFS for AAPS-eligible land, land in permanent crops and other enclosed land will be reduced by the following amounts: 0-20 ha 20-50 ha 50-100 ha 100-300 ha £12.50 per ha per annum £7.50 per ha per annum £5.00 per ha per annum £2.50 per ha per annum These deductions will be made for each of the 5 years of the OFS, but weighted towards the early years of the agreement at 50% in year 1, 30% in year 2 and 20% in year 3. Mandatory habitats of Tir Gofal, Tir Cymen, and Tier 1A of ESAs 9.8.124 The mandatory habitats of these schemes all carry a prescription that the land must not be agriculturally improved. This is duplicated in the OFS environmental management prescriptions and paid at a rate £10 per hectare per annum. This payment will also be deducted from the OFS, though again the reduction will be weighted over the first 3 years of the agreement at 50% in year 1, 30% in year 2 and 20% in year 3. Optional and further habitat management categories of Tir Gofal, Tir Cymen and ESAs 9.8.125 In general these are compatible with the OFS and it will not be necessary to make any adjustment to OFS payments. However, there are exceptions to this rule and in some cases where OFS applicants are already in an agri-environment scheme, particularly Tir Gofal, it will be necessary to consult the Tir Gofal project officer to check that the agreement is compatible with organic farming. 308 9.8.126 Land entered into the Farm Woodland Premium, Farm Woodland or Moorland Schemes is ineligible for the OFS. 9.8.127 Land, which receives aid under the Arable Area Payments Scheme (AAPS) can also benefit from payment under the OFS providing the conditions of both schemes can be met. Set-aside land may be entered into the OFS provided it meets the requirements and restrictions of both schemes. Capital grants 9.8.128 No capital items are funded under the OFS, although the level of aid payment takes into account costs involved in meeting environmental requirements such as the maintenance of stock-proof hedges. Livestock Quotas 9.8.129 On entry into an approved OFS undertaking based on a conversion plan which involves a farmer becoming a sheep or suckler cow producer or increasing an existing flock or herd, he/she may be able to apply for an allocation of free quota under 'Category 5' of the National Reserve depending on the requirements of the agreed conversion plan. Record Keeping 9.8.130 All applicants are required by their organic sector body to keep comprehensive records of the organic farming practices used in addition to records of work related to the environmental prescriptions. Inspections are undertaken by the relevant sector body or UKROFS to check that standards are being complied with. Aid payments 9.8.131 Payment will be made for land, which falls into the following categories: ! AAPS Eligible Land means land which is "eligible land" within the meaning of the Arable Area Payments Scheme (AAPS) Regulations 1996(a). Land in Permanent Crops covers crops, which occupy the soil for a period of five years or more and yield crops over several years. This would normally include nurseries, trees and bushes for the production of fruit and berries, and vines. Strawberries and multi-annual crops are not included. Other Enclosed Land means any area other than AAPS eligible land and permanent crops which is fully enclosed by a traditional boundary or fence and which, if in a moorland area, is not more than 5 hectares. Unenclosed Land means land, which is designated as moorland or coastal belt. Moorland areas are specified on the Moorland Map of Wales 1992 (Map 11 of Section 5.1). Coastal Belt means the strip of land between the high tide mark and the field boundary nearest the sea. Grazed Woodland means woodland used for grazing by agricultural stock. ! ! ! ! 309 9.8.132 Over five years, total aid payments are available as follows: ! ! ! £450 per hectare for Arable Area Payments Scheme Eligible Land and for land in Permanent Crops; £350 per hectare for Enclosed Land; £50 per hectare for Unenclosed Land or Grazed Woodland. 9.8.133 Payment is 'front loaded' giving the highest rate of payment in the first years when the costs of conversion are greatest. The actual payments made for each of the five years that aid is paid are set out below: £ per hectare AAPS eligible land and land in permanent crops Other enclosed land Unimproved grassland or rough grazing, grazed woodlands Year 1 225 175 25 Year 2 135 105 10 Year 3 50 40 5 Year 4 20 15 5 Year 5 20 15 5 Total 450 350 50 9.8.134 Payment rates for AAPS Eligible Land, land in Permanent Crops and Enclosed Land will, where appropriate, be adjusted in order to take account of duplication with other schemes. 9.8.135 Additionally, payments are made in respect of the first undertaking for each organic unit. Payment of £300 is made in the first year of the undertaking, £200 in the second year and £100 in the third year. These payments are intended as a contribution towards the initial costs of advice and registration. 9.8.136 Payment will be made annually after the end of the first quarter of each year of the agreed scheme, subject to a valid annual claim. A valid certificate of registration from the relevant organic sector body must be submitted with each claim. 9.8.137 Full details of the starting assumptions, income foregone, management costs and payment rates for each payment category are shown in the Scheme Costings at Annex 4. 310 Obligations 9.8.138 All participants in the Organic farming Scheme must agree to the following: ! To farm all the land in conversion in accordance with the United Kingdom Register of Organic Food Standards from its entry into conversion for the entire period of the agreement. To register the land each year with an approved organic sector body. To comply with the following environmental requirements: The beneficiary shall not plough, reseed or improve, by use of drainage, manures or liming agents, any heathland, grassland of conversion value, including species-rich grassland, and rough grazing. The beneficiary shall not graze any of these semi-natural habitats so as to cause poaching, over-grazing or under-grazing affecting the conservation value of these habitats. The beneficiary shall avoid localised heavy stocking in the nesting season on areas of semi-natural vegetation, including heathland, species-rich grassland and rough grazing. The beneficiary shall not carry out field operations, such as harrowing and rolling, on species rich grassland or rough grazing during the nesting season. The beneficiary shall not cultivate, or apply manures within one metre of any boundary features such as fences, hedges and walls. The beneficiary shall retain traditional farm boundary features, for example, hedges and walls. He shall carry out hedge trimming in rotation, but not between 1 March and 31 August. The beneficiary shall maintain any stockproof boundaries using traditional methods and materials. Ditch maintenance shall be carried out in rotation but not between 1 March and 31 August. The beneficiary shall maintain streams, ponds and wetland areas. The beneficiary shall retain any copses, farm woodlands or groups of trees. The beneficiary shall ensure that in farming the land he does not damage, destroy or remove any feature of historical or archaeological interest, including areas of ridge and furrow. Be in an agreement for at least 5 years. Manage the land in accordance with an agreed conversion plan. Permit duly authorised officers to enter the farm and to inspect it at all reasonable times. Notify the National Assembly in writing within 3 months of any change of occupation or ownership of the farm. Supply the National Assembly on request with details of any sums received from any other body. ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 311 ! make available any books of records, accounts, receipts of other data relating to any organic farming practices and environmental prescriptions for the purpose of verifying that the terms of the agreement are being complied with. Administration 9.8.139 The scheme is administered by the National Assembly for Wales in partnership with the Farming and Rural Conservation Agency who undertake all mapping and cross compliance checks. 9.8.140 Full details of all of the administrative arrangements are shown in the Control Plan attached at Annex 3. This includes details of operational controls, payment controls, compliance monitoring system and penalties. Indicators Environmental Indicators ! ! ! ! ! Tiers of management Habitats protected (i.e. natural resources, biodiversity, and / or landscapes) Mineral fertilisation levels (of which N,P and K); (% fertiliser level in relation to the base year) Organic fertilisation ; (% fertiliser level in relation to the base year) Livestock density: level fixed by the understanding (LU/ha) / reference level Uptake Indicators Breakdown by land use (annual crops, other land uses, action, objectives [Biodiversiity, landscape, natural resources] of the following figures ! ! ! ! ! Number of beneficiaries Number of farms eligible to the engagements/achieved Average premium per farm payment. Premium linked to non-remunerative investment Total public expenditure (of which EAGGF contribution) 312 Other indicators ! Areas environmentally sensitive within the tiers has classified surface (of which (%) covered by agrienvironment contract e.g. area of land into Tir Gofal Management and area of land farmed organically) Plant varieties under threat of genetic erosion; ha of cultivated areas (of which (%) covered by agrienvironment contract) Stocking rates Endangered breeds - species monitoring e.g. lapwings; number in region of which: number covered by an agri-environmental contract. These indicators are designed to monitor the effects of the schemes on the situation and not expenditure. Jobs created ! ! ! ! Targets Annual Tir Gofal ! Number of beneficiaries ! Area Organic Farming Scheme ! Number of beneficiaries ! Area 600 30,000 ha Total 4200 210,000 ha 180 12,400 ha 1270 87,000 ha 313 9.9 PROCESSING AND MARKETING OF AGRICULTURAL PRODUCTS 9.9.1. Activities in this area are covered by Articles 25 to 28 of Council Regulation 1257/1999. Article 25 allows for support to be given for investment to facilitate the improvement and rationalisation of processing and marketing of agricultural products, thereby contributing to increasing competitiveness and added value of such products. It further indicates that support shall contribute to one or more of the following objectives: ! to guide production in line with forseeable market trends or encourage the development of new outlets for agricultural products; to improve or rationalise marketing channels or processing procedures; to improve the presentation and preparation of products or encourage the better use or elimination of by-products or waste. to apply new technologies; to favour innovative investments; to improve and monitor quality; to improve and monitor health conditions; and to protect the environment. ! ! ! ! ! ! ! 9.9.2. Under the measure, support shall be granted to those persons ultimately responsible for financing the investment in enterprises and only where economic viability can be demonstrated and minimum standards regarding the environment, hygiene and animal welfare are complied with. Investment must contribute to improving the situation of the basic agricultural production sector in question. It must guarantee the producers of such basic products an adequate share in the resulting economic benefits and sufficient evidence must be shown that normal market outlets for the products concerned can be found. Investment in fisheries is excluded under this measure as is investment at the retail level and investment in the processing or marketing of produce from third countries. 9.9.3. The adoption of this measure will contribute to achieving the following objectives as identified in the SWOT in Section 5.1: ! ! ! ! ! ! improving product quality reduce dependency on narrow and specialist economic base create income and employment opportunity provide new opportunities for business growth diversify income sources provide business opportunities for entrepreneurs 314 ! ! ! ! encourage additional forms of employment and income sources in the rural community provide new value opportunities linked to the natural environment capitalise on opportunities linked to culture and heritage generate new income streams from novel animals and crops Aims and Objectives 9.9.4 The overall aims of the proposals under this measure are to help Welsh producers and processors of agricultural products and food to increase their competitiveness, to process more produce within Wales and to gain an increased share of the UK market. This will bring more added value processing and jobs to those parts of Wales covered by the Plan and improve the long term viability of those areas. 9.9.5 In 1998, the Welsh Office decided to develop a comprehensive strategy for the development of the agriculture and food industries in Wales in order to identify actions to support these industries that were focused firmly on addressing the relevant trends in market demand; were practical and realistic; and carried commitment from the industry and relevant organisations in Wales. To begin the process, Action Plans for the three key sectors in Wales, namely lamb and beef, dairy and organic products (including organic milk, cheese etc; eggs and livestock including poultry and pigs), were developed and copies of these Plans are at Appendix 18. The Executive Summary is at Appendix 19. 9.9.6 The development of the added value processing industry in all three sectors is a key factor in the successful delivery of the Plans and the following key objectives address the main findings for these sectors: ! Lamb and beef - to help farmers and the related meat industry in Wales to develop profitable and sustainable markets for Welsh lamb and beef . ! Dairy - to improve the performance of the dairy industry and enhance its contribution to the rural economy and rural life in Wales: ! Organic - to establish the key role of organic agriculture in agricultural and environmental policies in Wales, to expand the Welsh organic sector by increasing production of existing and new businesses to 10% of the Welsh agricultural products sector by 2005 and to exploit fully the growing market opportunities within Wales, the UK and elsewhere. 9.9.7 The Strategy has now been expanded to include the following sectors: ! ! ! Forestry and woodland products, including Short Rotation Coppice; Alternative crops and biomass products; and Horticulture including vegetables, fruit, plants and flowers. There are also proposals for the aquaculture sector but no proposals are made for this sector in this Plan as they come under the remit of the Financial Instrument for Fisheries Guidance. 315 Actions Proposed 9.9.8 Support under this measure will be provided through the Processing and Marketing Grant Scheme 2000. The evaluation of the previous scheme, which has guided the development of this grant, is at Appendix 20. The new grant has been designed to meet the specific requirements of the Welsh industry and will assist: ! ! ! the construction of new buildings; the refurbishment of old buildings; and the purchase of new equipment. 9.9.9 The following paragraphs develop the main areas of activity to be supported under these broad headings in some of the key sectors, but this is not a prescriptive list and activities will extend beyond those shown below. Livestock Activity will essentially take place at three levels, although these will be closely linked through the AgriFood Strategy. The following briefly sets out the types of activity to be supported: Livestock Markets - support will be considered for improvements to animal welfare and environmental standards which exceed statutory requirements. This is seen as an important part of the overall strategy for the livestock sector as it has direct links with the quality and condition of animals going for slaughter and hence the quality of the final product. Abattoirs - support will be considered for the improvement and expansion of their facilities to allow them to meet the rising number of customers requiring the meat they supply to be processed and packed further, with a better level of cutting and trimming, and the preparation of joints to catering specifications. It will also assist the development of small, local abattoirs to meet specific needs such as organic and speciality or niche products. Meat Processing Plants - support will be considered for the improvement and expansion of plants to increase the level of added value processing taking place in Wales. We will consider a range of activities including improvements in hygiene and environmental standards (in excess of statutory requirements); improved packaging including full "retail packing"; preparation of new 'recipe products' (such as ready to cook convenience foods) and 'prepared meats'. Some illustrative examples of potential projects in this sector are: ! i a livestock market might want to improve its lairage facilities and other animal handling / holding facilities to raise standards of animal welfare, to make improvements to sale rings to speed up sales (and therefore reduce stress on animals) or to improve its effluent handling. Support could be considered for investment in new buildings or upgrading existing buildings, new animal pens or improvements to existing pens, and infrastructure work that would lead to environmental improvements; 316 ! an abattoir might want to expand its primal cutting operation to accommodate the needs of its customers, to build new chilling or other carcass processing facilities, to introduce new processing lines for specific purposes (for example, slaughter for export) or to improve its effluent handling. Support could be considered for investment in new buildings or upgrading existing buildings, purchase of equipment for a new process or upgrading existing equipment, and general infrastructure work that would lead to environmental improvements; a meat / poultry processing company might want to make quality improvements to its products, or expand into a new area, or move into more refined / specifically targeted packaging, and improve its effluent treatment systems. Support could be considered for investment in new buildings or upgrading existing buildings, purchase of equipment for a new process or upgrading existing equipment, purchase of specific equipment for controlled atmosphere packaging etc, and general infrastructure work that would lead to environmental improvements; ! Dairy The key focus in this sector is to increase the amount of added value processing of raw milk in Wales to produce higher value dairy products, including speciality and niche products. Support will be considered for all dairy products (subject to state aid restrictions including those covering products which imitate or substitute for milk or milk products) including the production of innovative products such as speciality cheeses, and for products for the food manufacturing industry i.e. dairy products that are components of other processed foods such as canned milk puddings and ready meals. It will also be available for environmental improvements, such as effluent and waste handling, and for hygiene improvements, provided the improvements exceed statutory requirements. Support will be considered for investment in new buildings or upgrading existing buildings, purchase of equipment for a new process or upgrading existing equipment, provision of specialist storage and maturation facilities, purchase of specific equipment for specialist packaging, and general infrastructure work that would lead to environmental improvements. As businesses within the sector tend to be multi-functional and cover a number of areas, for example producing drinking milk, cheese and canned milk puddings, it is difficult to give illustrative examples of potential projects. The following examples provide an indication of what might be supported: ! a cheese manufacturer might want to move into higher quality products such as mature cheese, or move into a new area such as blue cheese, or improve its storage facilities, or move into new types of packaging to meet customer demands or export requirements, and improve its waste and effluent handling. Support could be considered for investment in new buildings or upgrading existing buildings, purchase of equipment for a new process or upgrading existing equipment, purchase of specific equipment for controlled atmosphere packaging etc, and general infrastructure work that would lead to environmental improvements an ice cream manufacturer might want to expand its business into frozen yoghurts and sorbets. Support could be considered for investment in new buildings or upgrading existing buildings, and purchase of equipment for the new process or upgrading existing equipment. ! 317 Horticulture Activity in this sector will cover the initial processing of produce, namely washing, grading, packing and storage, and further processing into components for use in processed foods, ready meals etc. and for use by the food manufacturing and catering industries such as prepared vegetables and salads. Examples of support include the following: ! a group of potato producers might want to upgrade their processing facilities, and rationalise and amalgamate their storage and grading facilities into a larger, more economical unit with better environmental control. Support could be considered for investment in new buildings or upgrading existing buildings, purchase of equipment or upgrading existing equipment, purchase of specific equipment for controlled atmosphere packaging etc, and general infrastructure work that would lead to environmental improvements a vegetable processing company might want to improve their facilities to meet customer requirements and improve their handling of waste water. Support could be considered for investment in new buildings or upgrading existing buildings, purchase of equipment or upgrading existing equipment, and general infrastructure work that would lead to environmental improvements a fruit processing company might want to process UK fruit and use new packaging techniques to exploit the market for specialist fruit juices. Support could be considered for investment in new buildings or upgrading existing buildings, purchase of equipment or upgrading existing equipment, and purchase of specific equipment for controlled atmosphere packaging. ! ! Organic Activity in this sector will cover a wide range of organic products and will support completely new facilities, expansion of existing organic facilities and adaptation of existing non-organic facilities. Given the range of products covered, support will be available on a number of levels to meet the needs of the individual sectors from which the products are derived, e.g. livestock, dairy etc. Projects in this sector will echo those in the 'mainstream' sectors and for this reason no illustrative examples have been provided. Potential Beneficiaries 9.9.10 The scheme will be open to applications from a wide range of those involved in agricultural production, processing and marketing and will include: ! ! ! ! sole traders; private and limited companies; groups of producers who market their produce collaboratively; and individual producers who want to process and market their own produce. 318 Eligibility Criteria for Applicants 9.9.11 Applicants must: ! ! ! ! demonstrate that they are financially viable through the provision of three years audited accounts and financial forecasts for the following financial year; demonstrate that they are complying with the current minimum requirements on environmental protection, hygiene and animal welfare (where applicable) as set out by EC and UK legislation for the relevant sector(s); demonstrate that their project offers clear benefits to primary producers by indicating the number of primary producers who will benefit (either directly or indirectly) from their projects and stating how this benefit will be achieved (for example, increase in utilisation of basic products etc.); possess the necessary technical skills and competence to undertake the project or prove that they are actively acquiring such skills (for example, through training, recruitment of specialist staff etc.). Evidence of Existence of Market Outlets 9.9.12 Applicants for Processing and Marketing Grant will also be required to demonstrate the existence of normal market outlets on a project specific basis. The applicant's Business Plan which will be required to be submitted in support of a valid application for grant will have to demonstrate that there is a commercial market for the products and investment concerned and that they are not in oversupply in relation to the existing and expected capacities of the markets. The Business Plan will be subject to assessment by the National Assembly for Wales and its financial, commercial and technical advisors. Eligible Expenditure. 9.9.13 Eligible items will include the cost of erecting new buildings, refurbishing old buildings and installing new equipment, measures to improve and monitor health conditions and feasibility studies on future market trends and the potential for developing new products. Consultant's and architect's fees will also be eligible for grant up to 12% of project cost provided they do not include costs involved in preparing applications or claims. Non-eligible expenditure 9.9.14 The following areas or items of expenditure will not be eligible for aid: ! ! ! ! ! ! ! purchase of land and expenses relating thereto; purchase of buildings which have previously been used for the same purpose; any physical work on site carried out before the authorised start of work date (any such work carried out renders the whole award liable to cancellation); temporary works not directly related to the execution of the project; items not coming into an applicant's beneficial ownership within the time limit specified at award of grant (this means that any hire purchasing arrangements need to be completed at that time); vehicles for external transportation (forklift trucks, or similar, used for internal transportation and handling are eligible); harvesting equipment ( items such as field rigs used to wrap and box vegetables and equipment primarily for processing and packing are eligible); 319 ! ! ! ! ! ! ! ! ! ! second-hand equipment; own labour and equipment costs; costs related to the transfer and installation of existing plant and equipment in a new building or other place of work where the project will be realised; consumables (items which are normally written off within a year); maintenance costs; one for one replacement; recreational equipment (though televisions, projectors etc. for educational or business purposes may attract grant); landscaping, ornamental work and provision of amenities; office equipment and furniture, except telephone equipment, computer and other IT equipment, software and teleprinters, laboratory and lecture-room equipment; costs of arranging loans, VAT and other taxes recoverable by the beneficiary, administrative and staff costs or compensation paid to third parties for expropriation, unharvested crops etc. 9.9.15 The inclusion of any of these items in an application will not normally render the whole project ineligible but their costs will be deducted from the total project costs eligible for grant. With the exception of land purchase, the value of ineligible items within a project may not constitute more than 40% of the total project costs otherwise the project as a whole will be deemed to be ineligible. Assessment Process 9.9.16 The scheme will be operated on a continual assessment basis with projects being assessed against the standard criteria and the Strategic Action Plan. There are a number of fundamental factors that are taken into consideration when assessing an application which meet the requirements of EC Regulation 1750/1999: ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! additionality offered by the proposed project; financial health of the applicant; benefits to primary producers - a strong linkage to primary producers will be expected; environmental protection / pollution control / waste elimination; size of project; percentage of raw organic materials used; novelty or technical innovation - although this is relative as the Welsh industry is still at a formative stage and the lack of innovation would not bar a project from receiving grant; quality improvement; production of a speciality product; whether the project addresses the issue of seasonality; employment; production costs. comparison with the UK Sectoral Plan; meets the general requirement to use raw materials listed in Annex II of the Treaty of Rome; exclusions under UK or EC rules; and if operated by a farmer or grower, use of more than 20% of other producers' raw materials. 320 Application Process 9.9.17 The application process takes a maximum of six months and takes the following form: (a) The application form is sent to potential applicants on request and is used to assess the project against the points set out above. It asks for general information, which is treated as commercially confidential, on the proposed project, including: ! ! ! ! ! ! ! ! ! exact nature of the project and its costs; the raw materials to be used and their origin; the finished products and their potential markets; the exact location of the project; the proposed timetable for the project; the sources of funding for the project; and an investment appraisal in the form of a cash-flow forecast setting out the projected costs and returns and giving the rate of return on capital for the project. audited accounts for the business for the previous three years the applicant is expected to have at least outline planning permission before applying. (b) When an application is received, the applicant is notified of receipt. If the project is ineligible the applicant will be advised accordingly as soon as possible. (c) For eligible applications the following further information is then sought: ! ! ! detailed quotations to support project costings - these should not exceed the original estimates and should refer only to the eligible items of the project; architect's plans and a complete, detailed list of all the items for which grant is being sought; copies of planning permission and a completed questionnaire about the environmental impact of the project. (d) Provided all the details submitted are satisfactory, the applicant will be advised in writing, normally within one month, and a formal offer of grant made together with a request for them to sign an undertaking to abide by the rules of the scheme. This offer will be valid for twelve months and applicants are expected to start the project within this time. The offer will expire if work is not started within this period. Conditions of award 9.9.18 The award will be made subject to the following terms and conditions: ! ! ! ! it is made on the basis of statements made by the applicant or their representatives in the application form and subsequent correspondence. The making of false statements is an offence; work is not begun without first obtaining written authority to do so; any legal obligations imposed under EC and UK law, including hygiene legislation, are met; no alterations may be made to the project without the prior written approval; 321 ! ! ! ! ! projects should be completed within the timetable agreed with NAWAD and this should not be deviated from without the prior written consent; no grant will be paid on any item not owned by the applicant - any items on hire purchase or lease purchase must be paid for in full before they can be aided. Second-hand equipment or leased items cannot be aided; confirmation that none of the items covered by the application are replacements under an insurance claim; confirmation that no other EC grant has been sought - repayable loans from the European Coal and Steel Community or the European Investment Bank may be permitted; and and publicity for the project must make reference to the part played by both the EC and the Assembly in funding it. Monitoring and Evaluation 9.9.19 It is important to monitor the progress of projects and evaluate their success following completion. Grant recipients will be asked to provide an annual update on the progress of their projects and, two years after completion, a final report on its performance. 9.9.20 During the lifetime of the grant, when claims for payment are submitted, visits will be made to projects to assess progress against the targets and objectives set out in the original application - including the retention and continued use of equipment purchased with the grant. The release of grant will be conditional upon adequate progress being made. 9.9.21 At the completion of the project, following receipt of the final report, the project will be visited and a detailed assessment of the project undertaken, including checking invoices and inventories, to establish whether or not the purpose of the project has been achieved. A follow up visit will be made within five years after completion to ensure that the applicant still has, and is using, equipment purchased with the grant and that the business is performing as expected. Aid Intensity 9.9.22 The maximum rate of grant aid will be 30 % of total eligible costs Community contribution 9.9.23 The Community contribution will be 50 % of public cost. This ensures respect of the terms of Article 47(2) of Council Regulation 1257/1999 which refers to the rates in Article 29(4b) of Council Regulation 1260/1999 Investment Thresholds 9.9.24 There is a minimum total project cost threshold of £40,000 and a grant ceiling of £1.2 million per project. 322 General 9.9.25 The National Assembly element of the grant would be reduced by any amount the applicant may receive from other Government sources. Applicants may seek assistance from other sources but must find at least 50% of the eligible project costs from their own resources. All projects are subject to clearance for State Aid restrictions. Exceptions 9.2.26 Details of the exceptions being sought, as defined under Article 37 (3) of Regulation 1257/1999, are set out in Section 9.4 Ongoing Contracts 9.9.27 Ongoing contracts with a value of £3,238,383 (EU and UK contribution) were entered into and operate under the procedures and rules established by EU Regulation 951/97 (Commission decision 94/173/EC). Indicators ! ! ! ! ! ! Number of projects Green investments/Investment undertaken (%) Total amount of cost borne by beneficiaries Total amount of eligible costs Total public expenditure of which EAGGF contribution Jobs created 323 9.10 FORESTRY 9.10.1 Articles 29 to 32 of Council Regulation 1257/1999 allow for support to be provided to contribute to the maintenance and development of the economic, ecological and social functions of forests in rural areas. 9.10.2 Under this Plan it is intended to make payments for afforestation of agricultural land (Article 31) and non-agricultural land (Article 30) and for investments in forests (Article 30). Afforestation of agricultural land 9.10.3 Under this Plan support will be provided for: ! ! ! Planting and natural regeneration of trees on agricultural land; An annual premium per hectare to cover loss of income resulting from afforestation of agricultural land; Planting of short-rotation coppice. Other forestry measures 9.10.4 Under this Plan support will be provided for: ! ! ! Planting and natural regeneration of trees on non-agricultural land; Planting of short-rotation coppice; Investments in forests aimed at significantly improving their economic, ecological or social value. The implementation mechanisms The mechanisms through which this will be achieved are the Woodland Grant Scheme (WGS) and the Farm Woodland Premium Scheme (FWPS). The WGS is operated by the Forestry Commission (FC) with the FWPS operated by the National Assembly for Wales Agriculture Department (NAWAD). Woodland Grant Scheme - overall aims and objectives 9.10.5 The overall aims and objectives of the Woodland Grant Scheme which applies under both forestry measures, and the Farm Woodland Premium Scheme on agricultural land, provide the broader context for the implementation of the measures being co-financed in this Plan. These are set out below: i. To encourage people to create new woodlands and forests to: ! increase the production of wood; ! improve the landscape; ! improve woodland biodiversity; ! offer opportunities for recreation and sport. 324 ii. To encourage the sustainable management of forests and woodlands (as enshrined in the UK Forestry Standard - see later section), including their well timed regeneration, particularly looking after the needs of ancient and semi-natural woodlands. iii. To provide jobs and improve the economy of rural areas and other areas with few sources of economic activity. iv. To provide a use for land instead of agriculture. Farm Woodland Premium Scheme - overall aims and objectives 9.10.6 With its link to the WGS, the FWPS is designed to encourage the creation of new woodlands on agricultural land. The prime objectives of the FWPS are: to enhance the environment through the planting of farm woodlands by improving the landscape, providing new habitats and increasing biodiversity; and to provide farmers with ongoing income through annual payments to compensate for agricultural income foregone. In doing this farmers are encouraged to look at alternatives to agricultural production, which provide improvements to the landscape and can help to realise the productive potential of woodlands as a sustainable land use. The FWPS provides value to the farmer (alternative source of income, shelter and wildlife habitats, potential new income opportunities and provides cover for game) as well as to the countryside (different wildlife habitats for a wide range of common and rare species, enhanced landscape and potential scope for public recreation). Afforestation Of Agricultural Land (Measure H) Support for planting and natural regeneration of trees 9.10.7 Support will be provided from the Woodland Grant Scheme. This will operate entirely as in the previous period under Council Regulation 2080/92, and State Aid approval (Aid No 81/92). Types of Grant Available 9.10.8 The grants for which the Forestry Commission is seeking co-financing are paid as a contribution towards the cost of the afforestation of agricultural land. Co-financing for these grants will be sought up to the available allocation for forestry measures. 9.10.9 Grants for afforestation are paid either as standard rate grants or as Challenge Funds. A range of additional contributions are also available in addition to the standard rate grants, in specific areas where it is the intention to secure particular public benefits. i. ii. Standard rate grants are flat rate grants paid as a contribution to the cost of the work required. A Challenge Fund provides an opportunity for WGS applicants to competitively bid for the money they require to carry out eligible operations that will meet the aims of the specific Fund. Every application will be judged in terms of its value for money in relation to the aims of the particular Challenge Fund. Grants will be awarded by the independent approval panel to those schemes that 325 best meet the aims of the Challenge and which offer the best value for money and most public benefit. The main advantage that Challenge Funds offer over standard rate grants is increased flexibility. They can be tailored to permit the targeting of funds to achieve specified objectives in specific locations or woodland types whereas, standard rate grants are very general in nature with grant rates fixed across Britain. Although the administrative burden of Challenge Funds is often higher, this is far outweighed by the benefits, which also include stricter budget control, improved marketing opportunities and the ability to demonstrate more clearly, the achievement of strategy objectives. iii. An additional contribution to the overall costs of establishment will be made to encourage planting in priority locations to meet a variety of objectives. Additional contributions will be paid: ! ! to encourage the establishment of new woodlands close to towns and cities that will provide formal voluntary public recreational access. When a woodland is opened up for public access there are necessary additional costs placed on the owner resulting from the more intensive design required to ensure a quality woodland experience and from the extra infrastructure installed. This can include additional fencing and gates, interpretative signage, waymarking and footpaths as well as additional maintenance costs due to human impact and people damage i.e. litter collection and tree surgery. on land where the agricultural potential is high and a larger proportion of the establishment costs need to be offered to farmers to encourage them to plant trees. 9.10.10 Standard rate grants under the WGS have been set at a level to provide between 60% and 80% of the total eligible cost of the work undertaken by the beneficiary. In some cases an additional contribution may be paid in recognition that the beneficiary will incur additional costs in carrying out the required work. In these cases the grants will still remain as a contribution to cost. For Challenge Funds under the WGS the contribution to the cost of the work will vary from project to project. However, the rate of grant will usually be between 60-80% of the total cost and will never exceed 100% of the total cost of the work. In order to ensure that the aid intensities for afforestation are generally 60-80% of the eligible total cost and never exceed 100%, the Forestry Commission periodically reviews the costs of forestry operations by undertaking independent surveys. The Forestry Commission in 1996 undertook a comprehensive review of all the grant rates. This was superseded in 1999 by a rolling review programme with the aim of reviewing all grant rates over a 5-year period. Rates of grant 9.10.11 Afforestation can be achieved either by planting trees or by providing for natural regeneration. As explained above, grants are either paid as standard rate grants (with additional contributions available in specific circumstances) or through a Challenge Fund. In general, higher rates of grant (both WGS and FWPS) are offered for the establishment of broadleaved woodland. This reflects the higher establishment costs and the desire to encourage an increase in broadleaved woodland. 326 i) Standard Rate Grants Planting trees Grants for planting trees are paid in two instalments. 70% is paid on completion of the planting and 30% is paid five years later. Where an additional contribution is made this is paid with the first instalment for planting, and with the fixed payment for natural regeneration. Natural regeneration New woodland established by natural regeneration may receive a discretionary payment of 50% of the cost of work agreed as necessary to encourage the regeneration. A further fixed payment will be paid when the trees are established, usually around years 5-7, at which point the Forestry Commission is satisfied that the desired woodland will develop. The Forestry Commission builds a review date into all contracts (at year 4 and if necessary at year 9) which includes a follow-up inspection. Normally, the combined discretionary and fixed payments would be less than the standard rate grants available for planting new woodland. The Forestry Commission will approve payments in excess of the standard grant where it is satisfied that the work is necessary to achieve successful regeneration. However, the total payment the applicant receives will not exceed the total cost of the work required. The types of work eligible for discretionary payment include fencing and tree protection, deer control (where fencing is inappropriate), ground preparation, direct seeding, weeding and monitoring. Co-finance for natural regeneration is only claimed when the fixed payment is paid (. the Forestry Commission is satisfied the woodland will grow onto become fully established). At this stage co-finance is claimed for both the fixed payment and for the discretionary payment made earlier in the scheme. The standard rate grants are: New Planting Conifers (any size of woodland) Broadleaves (in woods up to 10 ha) Broadleaves (in woods 10 ha and more) Natural Regeneration Discretionary Payment Fixed Payment - Conifers Fixed Payment - Broadleaves ii) Challenge Funds These are seen as an effective means of achieving the Assembly's woodland objectives in Wales. Applications will be assessed by judging which proposals offer the best value for money in delivering the aims of the Challenge Fund at the least cost. If there are more bids than funds allow for, then the bids which best meet the objectives of the challenges will be selected. When the FC decides which 50% of agreed costs £325/ha £525/ha £/ha 700 1,350 1,050 1st Instalment £490 £945 £735 2nd Instalment £210 £405 £315 327 applications are successful, the payment to each applicant will be translated into a rate per hectare. The rates of grant to contribute to the costs of planting targeted by Challenge Funds are: New Planting Conifers (any size of woodland) Broadleaves (in woods up to 10 ha) Broadleaves (in woods 10 ha and more) Natural Regeneration Discretionary Payment Fixed Payment - Conifers Fixed Payment - Broadleaves iii) Additional Contributions The WGS is designed to support and encourage multiple objectives. On poorer land where agriculture is often marginal, forestry is seen as a viable alternative to agriculture. In general, reasonable uptake can be achieved by offering standard rates of grant on such land and by doing so, the Forestry Commission is able to achieve better value for money in relation to national and EU expenditure. On land where the agricultural potential is higher, a larger proportion of the establishment cost needs to be offered to farmers to encourage them to plant trees. This will buy additional public benefits such as a greater variety of tree species and improved timber quality. % of agreed costs less fixed payment £325 £525 £/ha % of agreed cost % of agreed cost % of agreed cost 1st Instalment % less £210 % less £405 % less £315 2nd Instalment £210 £405 £315 Planting Targeted on Better Quality Land 9.10.12 The rates of grant to contribute to the overall costs of planting targeted on better quality agricultural land are: New Planting Conifers (any size of woodland) Broadleaves (in woods up to 10 ha) Broadleaves (in woods 10 ha and more) Natural Regeneration Discretionary Payment Fixed Payment - Conifers Fixed Payment - Broadleaves 50% of agreed costs £925/ha £1,125/ha £/ha 1,300 1,950 1,650 1st Instalment £1,090 £1,545 £1,335 2nd Instalment £210 £405 £315 328 Encouragement for the Creation of Community Woodlands 9.10.13 It is Government policy to seek improvement of the environment close to towns and cities. This will be achieved by encouraging the establishment of new woodlands where they will be of most benefit to the public for recreation. Public access to the woodland will be permitted immediately following planting and will be secured for a period of not less than 10 years from this date. The design of such woodland must take into account the need for pedestrian access including waymarked trails, access gates and stiles, creation and management of paths and the provision of vehicular access and car parking. 9.10.14 The provision of formal access in these woodlands results in higher costs of establishment including: a. the use of a wider range and often more expensive tree species. This results in higher planning and implementation costs; b. greater design input. This is required to ensure a quality woodland experience is developed because these woodlands are intended for intensive recreational use, often by a large number of people; c. exceptional costs experienced during the vulnerable establishment phase to safeguard and secure the woodland. In particular, the cost of additional or temporary fencing to prevent trampling damage from pedestrians and vegetation control to minimise fire risk alongside footpaths. 9.10.15 In order to meet these higher than normal costs, a higher contribution to establishment costs is paid. The rates of grant to contribute to the cost of planting specifically targeted for the provision of formal public access (i.e. community woodlands) are: New Planting Conifers (any size of woodland) Broadleaves (in woods up to 10 ha) Broadleaves (in woods 10 ha and more) Natural Regeneration Discretionary Payment Fixed Payment - Conifers Fixed Payment - Broadleaves 50% of agreed costs £1,275 £1,475 £/ha 1,650 2,300 2,000 1st Instalment £1,440 £1,895 £1,685 2nd Instalment £210 £405 £315 9.10.16 Should it be necessary, the additional contribution to the costs of establishing community woodland may be withheld, even if planting has been completed, until such time as the work needed to provide for recreation in the woodland has been completed. 329 Open Ground The creation and maintenance of non-woodland open habitats to increase woodland biodiversity is desirable in all woodlands for both management and environmental reasons. Indeed, the Forestry Commission actively encourages applicants to create, safeguard and enhance important non-woodland habitats, especially those recognised in the UK Biodiversity Action Plan and include these within their WGS applications. In addition, open space is required to accommodate the management infrastructure within a woodland (i.e. roads, rides and glades to aid access and deer management) and to improve the visual design of woodlands. The FC will decide how much open ground is appropriate and where it should be within the planting scheme. The FC may allow such areas up to a limit of 20% of the whole area eligible for grant aid within the application. The rate of grant for grant aided areas of open ground will be the same as those for new planting and natural regeneration as detailed above. It is calculated in proportion to the ratio of conifer and broadleaves areas in the scheme. Farm Woodland Premium Scheme 9.10.17 In accordance with Article 31 of Council Regulation 1257/1999 it is intended to continue to make payments under measure "(h) Afforestation of agricultural land: an annual premium per hectare to cover loss of income resulting from afforestation for a maximum period of 20 years for farmers or associations thereof who worked the land before its afforestation or for any other private law person". In order to do this, we intend to continue to operate, and make payments under, the Farm Woodland Premium Scheme (FWPS) as notified and approved in 1997. 9.10.18 The continued increase in the conversion of agricultural land to farm woodland under the FWPS reflects a growing awareness of the environmental benefits of the scheme and also of an alternative productive land use to agriculture. It is clear that farmers are not making their decisions to take land out of productive agricultural use solely for economic reasons: they are also considering the environmental and other benefits. Evaluation of the scheme has shown that it has been generally effective in increasing biodiversity, improving landscape character and that it can provide opportunities for timber production. 9.10.19 As was previously the case, the FWPS payments made by NAWAD to abate the loss of income from converting agricultural land to woodland are in addition to the establishment grants available for planting on agricultural land under the Woodland Grant Scheme (WGS) paid by the Forestry Commission (FC) (see above). The standard rates of annual payment to compensate for agricultural income foregone are reviewed at least every 5 years, as required by the Farm Land and Rural Development Act 1988. 330 Duration of annual FWPS payments and payment rates 9.10.20 For FWPS approvals under this Plan, the duration of the annual payments and the payment rates will be as for the FWPS 1997. The duration of the annual payments will vary depending on the types of woodland that are planted (payments will be made for 15 years for woodlands containing more than 50% broadleaves and 10 years for planting 50% or less broadleaves). The rates of payment will differentiate between the various types of agricultural land to be converted to woodland, broadly reflecting differences in income foregone from the typical agricultural activity, with the more productive land attracting the higher rates of payment which are currently as follows1: TYPE OF LAND £/hectare/year 300 230 160 260 200 140 60 Land eligible for Arable Area payments Outside of the Less Favoured Areas Disadvantaged Areas of the Less Favoured Areas (DA) Severely Disadvantaged Areas of the Less Favoured Areas (SDA) Other Cropped Land and Improved Grassland Outside of the Less Favoured Areas DA SDA Unimproved Land Less Favoured Areas 9.10.21 The actual FWPS payment rates to individual beneficiaries are made in £ Sterling and are the same irrespective of whether they are "farmers" or "any other private law persons". However, in accordance with Article 31.4 of Council Regulation 1257/999 the maximum amount of annual premium eligible for Community support to cover loss of income from afforestation will be as laid down in the Annex to that Council Regulation. In seeking co-financing we will ensure that the relevant maximum ceilings are respected. No co-financing will be sought for any element of an annual payment in excess of the following:(a) for farmers or associations thereof - 725 Euro per hectare, and (b) for any other private law person - 185 Euro per hectare. No payments to "farmers" are likely to exceed the maximum amount on which co-financing may be sought. However, in the case of "any other private law person", except for payments on unimproved land in Less Favoured Areas, all the other payment rates are likely to exceed the ceilings. As under the previous Programme, in the event of FWPS payment rates exceeding those detailed in the Annex to the Council Regulation 1257/1999, the excess will be provided as a State Aid (see below). 1 Where land is to count against the farmer’s set-aside obligation, the payment rate will be restricted to the set-aside rate if that is lower. 331 Eligibility conditions specific to FWPS 9.10.22 The eligibility conditions for the FWPS approvals under this Plan will be as for the FWPS 1997. FWPS approvals are only made on woodlands, which are to be planted with the approval of the FC under the rules of the WGS. The WGS arrangements are described in above. Only the occupiers of the land to be planted are eligible for annual payments and, in the case of tenant farmers, the consent of the landlord must be obtained. Prior to approval, applicants must be carrying on an agricultural business on an agricultural unit, which includes the land to be planted. Furthermore, applicants are obliged to maintain all woodlands to a satisfactory standard, take all reasonable precautions against loss or damage and not return the land to any form of agricultural activity for 30 years in the case of mainly broadleaved woodland, and 20 years for mainly conifer woodland. Failure to do so may result in the withholding, reduction or recovery of payments. This also applies to any applicant who makes or furnishes a false or misleading statement or information. 9.10.23 In order to ensure satisfactory environmental and silvicultural standards, FWPS payments are only made on woodlands, which are planted, with the approval of the FC under the rules of the WGS. The WGS arrangements are described above. 9.10.24 Woodlands under the FWPS (both for existing commitments and from any new commitments arising from applications approved under this Plan) is limited to a 200 hectare maximum per eligible beneficiary with a minimum of 1 ha per application. Woodland on unimproved agricultural land is eligible in the Less Favoured Areas only and is limited to a maximum of 40 ha per farm. Land specifically excluded from the FWPS under this Plan will be the same as that excluded under FWPS 1997 (a detailed description of land excluded from the FWPS is given in paragraph 9.10.29 below). Support for Short Rotation Coppice 9.10.25 Short rotation coppice (SRC) is a closely planted tree crop (usually willow or poplar species) managed on a cycle of approximately 10 years or less and regenerated by coppice growing from the cut stool. Most SRC schemes are planted to develop a fuel supply for renewable energy projects. Although the uptake of the scheme has hitherto been low it is likely to become increasingly important, and the Forestry Commission intends to continue with this type of planting within this Plan. 9.10.26 The grant is paid once the planting has been satisfactorily carried out. No other supplements are available for SRC, which is also not eligible for the FWPS. Rate of Grant Set-aside land Non-set-aside land £/ha 400 600 332 Definition of "agricultural land" 9.10.27 Agriculture means horticulture, fruit growing, arable cropping, seed growing, dairy farming, livestock breeding and keeping, the use of the land as grazing land, meadowland, osier land, market gardens and nursery grounds or the use of land as woodland where that use is ancillary to the use of the land for other agricultural activities. Letting land to another person to carry out an agricultural activity, where the applicant retains some responsibility for the management of the land, for example letting land on a grazing licence or short term tenancy for grazing is also considered an agricultural activity. Keeping of horses for recreational or sporting purposes and fish farming are not considered to be agricultural activities. 9.10.28 The land to be planted must have been in agricultural use for the three years prior to the application to join the WGS / FWPS. Agricultural use in this context means the above activities (other than woodland) and set-aside under the Arable Area Payments Scheme. Land excluded from FWPS 9.10.29 The following types of land are excluded from the FWPS: (a) non-agricultural land, including land used primarily to graze horses not used for agricultural purposes; (b) unimproved land outside the Less Favoured Areas; (c) land which forms part of a National Nature Reserve; (d) common land; (e) land at a time when it is rented out by the applicant to another person for their exclusive occupation; (f) land resumed from a tenant by means of a contestable notice to quit which was the subject of a counter-notice by the tenant, except where the Agricultural Land Tribunal has consented to the operation of the notice to quit on 'greater hardship' grounds; and incontestable notice to quit where the land was resumed for development purposes; (g) land which is to be converted to woodlands, where the trees, other than nurse trees, are intended as Christmas trees; (h) any land where the conversion to woodlands of that land would frustrate the purposes of any assistance previously given or to be given out of money provided by the UK Parliament or the European Community, or that the payment of grant under the FWPS in respect of that land would duplicate any such assistance. Definition of "farmer" 9.10.30 For the purposes of establishing the expenditure under the FWPS which is eligible for co-financing under this Plan, a farmer in relation to Article 26.1 of Commission Regulation 1750/1999 is defined as a person who derives at least 25% of their income from farming, taking account of all the land they farm in the UK. 333 9.10.31 Data about the hours worked by individuals involved in agricultural activities, or most other activities involving the self-employed, is not available. Furthermore, the "essential part of working time" (referred to in Article 26.1 of the Commission Regulation) needed for agricultural activities differs from one individual to another and from one business to another. Setting artificial criteria in this area would not be practicable nor would it provide any meaningful conclusion. To require participants in the FWPS to provide data on the time spent on agricultural as opposed to other activities, is therefore onerous and unnecessary. 9.10.32 Instead certain of the rules which determine eligibility for the FWPS provide relevant indicators. For example: (a) the land concerned (i.e. participating in the Scheme) is checked against, and registered on, the IACS database (see below); (b) only the occupiers of the agricultural land to be planted are eligible to be considered for approval under the Scheme (see above); (c) prior to approval the applicant must be carrying on an agricultural business on the agricultural unit which includes the land to be planted (see above); (d) the land to be planted must have been in agricultural use for the three years prior to the application to join the scheme (see above);. Aid Intensity 9.10.33 The amounts of aid for afforestation are set out above and expressed in £ sterling. These will be, generally, 60-80% of the total eligible cost and never more than 100%. 9.10.34 The grant rate for the Farm Woodland Premium Scheme will be 100% of income foregone for a period of 15 years for forests with more than 50% broadleaf trees, and for a period of 10 years for forests with less than 50% of broadleaf trees. Community contribution 9.10.35 The Community contribution will be 50% of public cost. Other Forestry Measures (Measure I) Afforestation of non-agricultural land Planting and natural regeneration of trees 9.10.36 Support for this activity on non-agricultural land, will be provided under this measure using the Woodland Grant Scheme. The scheme will be implemented in exactly the same way and with the same aid rates as described above for agricultural land. 334 Planting costs for Short-rotation coppice 9.10.37 Support for this activity on non-agricultural land, will be provided under this measure using the Woodland Grant Scheme. The scheme will be implemented in exactly the same way and with the same aid rates as described above for agricultural land. Investments in forests 9.10.42 This is implemented by two schemes which fall under the general 'umbrella' of the Woodland Grant Scheme. These are: Woodland Improvement Grant (WIG) 9.10.38 WIG is a one-off capital payment made to encourage a range of work in existing woodlands. It aims to bring the woodland back into active and sustainable management, or where the opportunity arises, to undertake work which will enhance the value of the woodland for conservation, landscape or recreation. 9.10.39 There are four types of project under the WIG: Project 1 - To provide public recreation in woodlands Grant is paid for work that will help to encourage informal public recreation in existing woodlands. The grant will be paid for work needed to open up new areas of woodland for recreation or to improve areas already used by the public. Project 2 - Undermanaged woodlands Grant is paid for work that will help bring woodlands, which are undermanaged or of low commercial value back into active management. Project 3 - Woodland biodiversity Grant is paid for work to assist woodland owners to manage their woods in ways that will implement the forestry aspects of the UK Biodiversity Action Plan. In particular grants will be paid where the work proposed helps achieve the expansion, maintenance and enhancement or restoration targets set out in the native woodland Habitat Action Plans or benefits the habitats of those woodland species covered by the Species Action Plans. Project 4 - Native Woodland Planning Grant The Forestry Commission is to introduce a new grant (from 1st August 2000) to assist farmers and other landowners to undertake survey work and management planning in native woodlands. Enhanced management of farm woodlands is a major component of Tir Gofal. Such woodlands provide an important structural component within the Welsh landscape as well as being of particular significance for wildlife. This grant will initially only be made available to landowners who are signed up to Tir Gofal. 335 The Forestry Commission recognises that most farmers will not have the ecological or silvicultural skills necessary to produce an acceptable survey or management plan. The grant will therefore be paid to all agreement holders with native woodland to prepare a simple plan of woodland management within 12 months of entering the Tir Gofal Scheme. 9.10.40 The economic regeneration of undermanaged woodlands and the maintenance, enhancement and restoration of native woodland to help achieve the targets in the UK Biodiversity Action Plan are seen as priorities in specific locations throughout Wales. In order to encourage a greater uptake of WIG in these priority locations we will be operating Challenge Funds for WIG Projects 2 & 3. The same principles of competitive tendering and contribution to costs will apply to these Funds as apply to the Challenge Funds for planting trees (see paragraph 9.10.11 (ii) above). Sustainable Forestry Operations Grant 9.10.41 Many woodlands in Wales are suffering from insufficient investment. These woodlands require a one-off injection of funding to bring the woodland up to a level where the owner can resume normal management operations. The subsequent on-going management operations are not eligible under this scheme. This grant is a contribution towards the costs of eligible investments necessary to secure significant environmental, social and economic improvements in these woodlands. Grant will only be paid provided: ! ! the public benefit from the work is judged to be greater than the grant; the net operational cost, including indirect costs, of the work is greater than the grant. 9.10.42 In addition to supporting the cost of preparing a 5-year investment plan the grant will provide a contribution to 'one-off' operations only. These are: ! protecting woodland from grazing and squirrel or rabbit damage by erecting fencing and/or by means of eradication such as shooting; one-off investments to tackle major problems of invasive species, such as rhododendron, and weeds which are 'strangling' the woodland and which require significant one-off action to remove the problem. Any follow-up management will not be funded; felling to encourage diversity of species and age-classes and to add value to the remaining timber; removal of conifers from streamsides and other open ground habitats; the creation or enhancement of public access to woodlands where there is established or anticipated public demand - in these cases the grant will contribute towards the additional infrastructure required for access such as footpaths, gates, stiles, waymark and interpretative signage, and tree surgery; small scale planting of broadleaves in the woodland; securing work funded by a Woodland Improvement Grant. ! ! ! ! ! ! 336 9.10.43 In order to qualify for the grant, the Forestry Commission requires the preparation of a 5-year investment plan detailing the specific objectives and eligible activities for those areas for which the grant is sought. The plan also sets out the desired state of the woodland at the end of the 5-year period and may detail annualised programmes of work with agreed costs and timescales where appropriate. To assist applicants in determining the cost of eligible operations and to help the Forestry Commission to ensure that the proposed work is indeed higher than the rate of grant provided, guidance on management planning and a schedule of standard operational costs are made available by the Forestry Commission. Aid Intensity 9.10.44 The rate of grant is £175 per hectare. The grant provides a contribution to the cost of the eligible work. The overall cost may vary from application to application, but will always work out at more than £175 per hectare. 9.10.45 Small applications of 5 hectares or less receive the full grant in year 2. For larger schemes the payment is annualised over the 5-year period of the plan of operations. This method of payment allows the applicant to spread the investment over a 5-year period and allows the Forestry Commission to exercise greater control through the issuing of annual invitations to claim with associated compliance inspections. Community contribution 9.10.46 The Community contribution will be 50% of public cost. For any revenue bearing investments the terms of Article 47(2) of Council Regulation 1257/1999 which refers to the rates in Article 29(4b) of Council Regulation 1260/1999 will be respected. Eligibility Conditions for Measures (h) and (i) 9.10.47 Only the owners or occupiers of the land to be planted or the woodland to be managed are eligible to apply for grants. In the case of tenants, the consent of the landlord must be obtained. Beneficiaries 9.10.48 The financial beneficiaries are the owners or occupiers of the land (be they "farmers or associations thereof" or "of any other private law person"); but agents, forestry contractors and tree nurseries also benefit from the work generated through these activities. The provision of public benefits is an important component of the schemes and so in a wider sense, the general population and visitors benefit from the social, economic and environmental contribution of trees, woods and forests in Wales. 337 Ongoing Contracts From The Previous Period 9.10.49 Agreements offered before 31 December 1999 will operate under the WGS, approved under Council Regulation 2080/1992. Estimated expenditure against these ongoing contracts, and the Community contribution sought relating to this expenditure is set out in the Table below: £ million Payments under Reg. 2080/92 Community contribution 2000 1.7 0.6 2001 1.1 0.4 2002 0.7 0.2 2003 0.3 0.05 2004 0.2 0.05 2005 0.1 0.05 2006 0.1 0.05 This expenditure is in respect of afforestation of agricultural land and investments in forest by farmers under the WGS. 9.10.50 Existing approvals made by 31 December 1999 will continue to operate under the: ! ! Farm Woodland Scheme (FWS)2 approved by the Commission in 1988 (Aid No. 239/88); and Farm Woodland Premium Scheme 1992 (FWPS 1992)3 and Farm Woodland Premium Scheme 1997 (FWPS 1997)4 approved by the Commission under Council Regulation 2080/1992 in accordance with the UK's programme of measures for the implementation of that Regulation (reference SG (92) D/4984, State Aid No 81/92 and State Aid No. 24/97). Duration of annual payments and grant rates for Schemes with ongoing commitments from the previous period 9.10.51 The duration of the annual payments varies depending on the types of woodland that were planted. The basic payment period under the FWS is 20 years. However to encourage the planting of more broadleaved trees, and to reflect the longer period before such trees can generally be expected to generate any income, payments are made for 30 years for woodland containing more than 50% broadleaves and for 40 years for planting oak or beech which take even longer to mature. Traditional coppice receives payments for 10 years. 9.10.52 Under the FWPS 1992 and 1997 payments are made for 15 years for woodlands containing more than 50% broadleaves and 10 years for planting 50% or less broadleaves. 9.10.53 FWS: The FWS closed to new applicants in 1992 with some 55 beneficiaries covering an area of some 388 hectares. 2 The FWS was closed to new applicants in 1992 but ongoing annual payments arising from the previous Programme are made for the duration of the beneficiaries’ commitment under that Scheme. 3 The FWPS 1992 was closed to new applicants in 1998 but ongoing annual payments arising from the previous Programme are made for the duration of the beneficiaries’ commitment under that Scheme, 4 The FWPS 1997 includes ongoing annual payments arising from the previous Programme made for the duration of the beneficiaries’ commitment under that Scheme. 338 9.10.54 FWPS: From 1 April 1992 (when the FWPS was opened to new applicants) to end December 1999, we have approved some 540 applications for grant aid in respect of agricultural income foregone in respect of some 2,615 hectares of woodland on agricultural land. Applications approved by land type have comprised 8% arable, 53% improved grassland and 39% unimproved land. The broadleaved area comprised 78%. State Aids 9.10.55 All WGS grants currently have State Aid approval and are not being re-notified as part of this plan. 9.10.56 Beneficiaries of FWPS, who do not qualify under the definition of a farmer, are likely to receive payments in excess of the ceilings set out in Annex to Regulation 1257/1999 (except for those towards unimproved grassland in LFA). These additional payments will be made under the State Aid, previously notified and approved under Aid No. 239/88 and Aid No 81/92 as part of the UK's programme of measures relating to the afforestation of agricultural land. 9.10.57 State Aid 'top ups' are being made available to support the co-financed measures; these are indicated in the financial tables and are approved as part of the Plan. Provisions ensuring that such actions are adapted to local conditions and are compatible with the environment as well as, where appropriate, keeping the balance between silviculture and game populations. 9.10.58 These provisions in respect of the FWPS under this Plan will be the same as for the FWPS 1997. The FWPS will continue to be open to farmers who, either personally or through a manager, run an agricultural business that includes the land to be converted to woodland. An agricultural business means a business or part of a business consisting in the pursuit of agricultural activities. The definition is analogous to that used for the Integrated Administrative and Control System (IACS) of the CAP. 9.10.59 Environmental and silvicultural safeguards are provided under the WGS arrangements. Comprehensive reviews and evaluations of the FWPS have been carried out, which included an analysis of application form data, as well as independent silvicultural and environmental surveys. These indicated that the Scheme had resulted in worthwhile environmental benefits and that planting would enhance landscapes and wildlife habitats. The application forms are carefully monitored and evaluated. The level of planting on unimproved land, which is subject to limitations for environmental reasons, will be kept under careful review. International Commitments To Sustainable Forestry Pan-European Ministerial conferences on the Protection of Forests 9.10.60 The Ministerial Conferences on the Protection of Forests highlighted the multi-functional role of forestry and the importance of sustainable forest management. The Government's commitment to sustainable forest management which provides a wide range of benefits including economic, environmental and social benefits is demonstrated through the adoption of the UK Forestry Standard (1998) and, in Wales, through the development of a forestry strategy for Wales. 339 9.10.61 The UK Forestry Standard, brings together in one document the criteria, indicators and standards for sustainable management of forests in the UK. It sets out the UK Government's approach to sustainable forestry and details forest management practices for use at the national and individual forest level. It also provides an opportunity to monitor UK forests and express a vision for UK woodland in the future. All applications for support under this Plan will be assessed against the UK Forestry Standard. 9.10.62 The Standard explains the international and domestic setting in which guidance and regulation of forestry has developed, and integrates forestry in the United Kingdom with the European and global protocols for sustainable development. Specific reference is made to its compatibility with the Resolutions, Guidelines and Pan European Criteria of the Ministerial Conferences on the Protection of Forests in Europe. UNCED/IPF/IFF - National Forest Programmes 9.10.63 The concept of national forest programmes was developed through dialogue in the Intergovernmental Panel on Forests. They now form an important tool of global forestry policy and a means of ensuring that forestry issues are integrated into a country's overall sustainable development and land use strategies. 9.10.64 In the UK, the national forest programme is not contained in one single document, but is the sum of a number of key documents, e.g. the UK Forestry Standard and the emerging Welsh forestry strategy. We are in the process of preparing a UK Sustainable Forestry Programme which will set out clearly the UK's policy for sustainable forest management, building on the previously published 'Sustainable Forestry the UK Programme' (1994). 9.10.65 This will fulfil our international commitment to have a national forest programme and will help us to develop a more integrated approach and improve co-ordination of the mechanisms and processes that deliver the UK's programme. EU Forestry Strategy 9.10.66 The EU Forestry Strategy sets out how EU actions on forestry can usefully support Member States' efforts to deliver sustainable forest management. In line with that principle the forestry elements of the Welsh Rural Development Plan complement the Government's wider forestry activities. Environmental Standards 9.10.67 Environmental safeguards are an essential component of the WGS and FWPS and are enforced through contract approval and monitoring procedures. On receipt, all applications are assessed to ensure that they meet the environmental standards set out in the UK Forestry Standard and the associated guidelines on nature conservation, landscape design, archaeology, soil and water. 9.10.68 In addition, proposals for new planting which are likely to have a significant effect on the environment are also subject to Environment Impact Assessment under the Environmental Impact Assessment (Forestry)(England and Wales) Regulations 1999 (Council Directive 85/337/EEC as amended by 340 Council Directive 97/11/EC). These Regulations include thresholds above which a determination of the need for an Environment Impact Assessment is necessary for all afforestation projects. The information below shows the thresholds: Operation Forest road works Afforestation Threshold where any part of the land is in a sensitive area No threshold 2 hectares where the land is in a National Park or National Scenic Area. No threshold in other sensitive areas. Threshold where no part of the land is in a sensitive area 1 hectare 5 hectares. 9.10.69 A sensitive area includes Sites of Special Scientific Interest (SSSI), National Parks, World Heritage Sites, Scheduled Ancient Monuments, Areas of Outstanding Natural Beauty, sites designed or identified as a candidate for Special Areas of Conservation, and sites classified or proposed as a Special Protection Area (Section 5.1 specifically refers to these sites). 9.10.70 Once the Forestry Commission is satisfied that the application meets these standards and complies with the WGS rules and regulations, it undertakes public consultation by including details of the proposal on a public register. The register can be viewed on the FC Internet site, is available for inspection at Forestry Commission Offices, and is also faxed and e-mailed weekly to local authorities and other statutory consultees, for public display. In addition, Local authorities and other statutory consultees i.e. Nature Conservation Agencies, Environmental Protection Agencies and Agriculture Departments are formally consulted over large or sensitive schemes. Such statutory consultees can either suggest ways in which the proposed scheme can be improved upon or can formally object to proposals. 9.10.71 If it is not possible to resolve a statutory consultees' objection the matter is referred to an independently appointed Regional Advisory Committee, then to Forestry Commissioners and, if necessary, to the Government Forestry Minister. 9.10.72 Any forestry activity within, or likely to affect, Natura 2000 sites must be undertaken in ways which do not damage their value for the designated habitat or species. The Conservation (Natural Habitats & Co.) Regulations 1994 implement the Habitats Directive and require a proper assessment of the implications of proposals for any Natura 2000 site. Linkage between proposed actions and national programmes 9.10.73 As for the FWPS 1997, in order to ensure satisfactory environmental and silvicultural standards, FWPS payments are only made on woodlands, which are planted with the approval of the FC, under the rules of the WGS. This link to the WGS will ensure that satisfactory environmental and silvicultural standards are maintained. Monitoring of uptake under FWPS will continue. 341 9.11 PROMOTING THE ADAPTATION AND DEVELOPMENT OF RURAL AREAS 9.11.1 Article 33 of Council Regulation 1257/1999 provides a menu of 13 possible measures to promote the adaptation and development of rural areas: ! ! ! ! ! ! ! ! ! ! ! ! ! land improvement; reparcelling; setting up of farm relief and farm management services; marketing of quality agricultural products; basic services for the rural economy and population; renovation and development of villages and protection and conservation of the rural heritage; diversification of agricultural activities and activities close to agriculture to provide multiple activities or alternative incomes; agricultural water resources management; development and improvement of infrastructure connected with the development of agriculture; encouragement for tourist and craft activities; protection of the environment in connection with agriculture, forestry and landscape conservation as well as with the improvement of animal welfare; restoring agricultural production potential damaged by natural disasters and introducing appropriate prevention instruments; financial engineering. 9.11.2 The analysis of the current situation in Rural Wales in Section 5 has identified weaknesses in the economy that these broader measures of rural development aim to address. The relatively low GDP of Rural Wales is largely attributed to a combination of low productivity employment and low activity rates. The agriculture and tourism sectors, in particular, are characterised by low wage rates and seasonal employment. Compared to other parts of Wales, economic activity rates are generally above the average; they are however low relative to other similar parts of the United Kingdom. 9.11.3 In parts of rural Wales there are also pockets of social exclusion. These difficulties are often exacerbated by poor access to many services. There are areas of population imbalance particularly in the remoter parts of rural Wales, resulting from an influx of retired people and an outflow of young people often to pursue their educational ambitions in the first instance - who then take up their careers elsewhere. Measures to be supported 9.11.4 In the light of this analysis, support will focus on those measures that increase participation in community life, assist in establishing and expanding community-led initiatives and maximise the contribution to the economic, social, environmental and cultural regeneration of rural areas in Wales. 342 9.11.5 Given the relatively low level of EAGGF funding available for Article 33 measures under the RDP, support will be restricted to five measures. These are: ! ! ! ! ! Basic services for the rural economy and population (indent 5) Renovation and development of villages and protection and conservation of the rural heritage (indent 6) Diversification of agricultural activities and activities close to agriculture to provide multiple activities or alternative incomes (indent 7) Encouragement for tourist and craft activities (indent 10) Protection of the environment in connection with agriculture, forestry and landscape conservation as well as with the improvement of animal welfare (indent 11). 9.11.6 These will be the only measures under Article 33 to receive EAGGF co-financing in this Plan. Objectives for Article 33 measures 9.11.7 The objectives of the measures to be adopted in paragraph 9.11.5 are to raise the GDP and quality of life (as identified in the SWOT in Section 5.1) in rural areas of Wales by: ! ! ! ! ! ! providing a broader range of well-paid employment opportunities; helping to raise economic activity rates; enhancing or providing additional mainstream services for the rural economy; providing openings for future economic development, including tourism and craft activities; improving the physical environment of villages and conserving the rural heritage; addressing social exclusion. Justification for the measures 9.11.8 To ensure that the actions taken under this Article result in lasting economic prosperity, the measures must provide for sustainable development that improves the quality of life of those living and working in rural communities. A number of the measures available under Article 33 of the Regulation could clearly help to address the needs of rural Wales set out in this Plan and the following text considers each of the measures listed in paragraph 9.11.5. Basic services for the rural economy and population A lack of basic service provision limits the scope for the rural economy to develop fully. Many communities in rural Wales have limited access to the broad span of services which their counterparts in urban areas might take for granted. To some extent this is an inevitable consequence of rural sparsity. However, a gap has developed between the level of provision and the needs of the economy of rural Wales. Improved service provision is seen as a prerequisite for encouraging the most economically able to work, invest or set up businesses in rural Wales. Poor service provision is also a significant contributor to social isolation in many villages. 343 Support will be provided to community partnerships for the cost effective enhancement of basic services for the rural economy and population in East Wales. The measure will support community led projects that widen access to mainstream services for the rural economy and population or marginalised communities. Particular attention will be paid to how services can address aspects of social exclusion within remoter rural areas or provide services that encourage entrepreneurship. Support under this indent will not be provided for core administration costs, profit-orientated private sector ventures, investments in education or health services, media facilities (e.g. television decoders etc.), travelling shops and general retail activity. Support for the renovation of shop-space where it will ensure the supply of basic goods will, however, be considered. Services supported under this indent will be expected to become self-sustaining within the Plan period. Renovation and development of villages and protection and conservation of the rural heritage The strategy for the development of rural Wales proposes holistic solutions to achieving sustainable economic prosperity. Both the built environment and the area's natural resources have the potential to provide a significant contribution to the area's prosperity. There is a need to conserve the best of the natural and built heritage whilst ensuring that appropriate new development can take place. Investment in the infrastructure of rural towns and village centres is vital to the development of thriving communities. Many rural settlements which have struggled to adapt to changing economic patterns are often faced with a parallel decline in their physical fabric. Such decline can become self-reinforcing as dereliction blights adjacent properties. A run-down environment discourages both local customers and tourist visitors and can be one of the factors discouraging those parts of the rural population most likely to add greatest value to the local economy from seeking their livelihoods in rural communities. To succeed and to be sustainable, proposals for investment in the built fabric, streetscape and public spaces must emanate from the communities themselves. It is proposed that support should be provided to community partnerships for the renovation and development of villages and protection and conservation of the rural heritage in East Wales. Diversification of agricultural activities and activities close to agriculture to provide multiple activities or alternative incomes Support under this measure could be made available for: ! ! ! ! ! ! ! development of new non - agricultural enterprises; reuse of redundant farm buildings; provision of services such as secretarial or computing; agri-tourism including bed and breakfast; recreational; farm facilities (nature trails, open farm, quad bikes etc.) and fishing; catering operations; conversion of farm buildings into holiday accommodation; buildings for let as offices, craft workshops, light industrial units and community use etc.; erection of new buildings for a limited number of non-agricultural uses . 344 There is also scope to assist the development of schemes which could give rise to wider pluriactivity opportunities in the service and manufacturing industries including contracting. Encouragement for tourist and craft activities Rural Wales' varied, natural and attractive landscapes have resulted in the tourism industry being an integral part of the rural economy, but the industry in Wales has often provided seasonal and relatively low paid work for the rural workforce. As tourists become more discerning and demand higher service provision, there is a need for the industry to adapt and capitalise on these changes in the market. Rural tourism has been identified as a potential growth sector for the Welsh economy: the scenic inland areas of East Wales are well placed to take advantage. Local communities will be encouraged to develop tourist and craft activities appropriate to their locality. Support will be for activities that provide for a high value return from tourism and/or help to extend the tourist season in the area. Support will be targeted on community led projects that encourage tourist and craft activities aimed at enhancing the contribution that these activities make to the rural economy, in particular those that will provide a high value return from tourism or help to extend the tourist season in the area. Protection of the environment in connection with agriculture, forestry and landscape conservation as well as with the improvement of animal welfare The Tir Gofal scheme and the other environmental measures described in Section 9.8 provide the main mechanism through which the environmental objectives of the plan will be addressed. Public access within the Tir Gofal scheme will need to be funded via this measure. Nevertheless, it is possible that opportunities for environmental enhancement and improvements to animal welfare will be identified which can, if resources are sufficient be funded under this measure. Such opportunities might relate to the development of rural pursuits linked to the environment such as riparian habitat management and especially locally important aspects which add value and which are not included in the other areas of this plan. Schemes to cover waste management and recycling projects designed to improve the environment will also be included within this measure but, where appropriate, will have to comply with the Agricultural State Aid Guidelines. The provision of paid public access was previously administered under agri-environment schemes. Public access will now be provided for under this measure. As part of the mandatory Whole Farm Section, farmers must allow access to all unenclosed moorland, heathland and grassland. Access is limited to walkers, who may bring dogs on leads. Tir Gofal can also be used to create new opportunities for the use of enclosed land by walkers, horse riders, cyclists, people with disabilities or educational groups. New permissive access will only be negotiated where it is sensible, safe and environmentally sound to enhance existing provision. Land close to settlements and new routes which give access to good view points or features such as woodland are examples of desired proposals. It is anticipated that many such facilities will link with existing on farm tourism enterprises, such as Bed and Breakfast or farm shops. 345 Complementarity with other European Programmes 9.11.9 Section 6.1 sets out the overall strategy for rural Wales and how EAGGF measures will be supported by Objectives 1, 2 and 3 as well as Community Initiatives such as LEADER+. However, there are specific linkages between the measures supported under Article 33 and Objective 2 and LEADER+ and these are set out below: Objective 2 The Objective 2 and Transitional programme in East Wales will provide, over the lifetime of the programme, 78 million euro in European support for the new Objective 2 areas which include most of Powys (excluding the south-east corner) alongside largely urban areas in Newport and Cardiff. The rural areas should attract 40% of this support. In addition there will be 33 million euro support for "transitional" areas covered by the previous Objective 5b and Objective 2 programmes but not included in the new Objective 2 programme. About 30% of this support will go to rural areas. Support will be drawn solely from the ERDF. The draft SPD sets out three main priorities for action alongside a Technical Assistance priority. These are: I. II. III. IV. Developing sustainable & competitive SMEs. Sustainable rural development. Urban Community Regeneration. Technical assistance. Priority 1 will develop the SME base throughout urban and rural parts of the Objective 2 areas and transitional areas of East Wales. Priority 2 will be targeted on rural East Wales and provide support for the following measures: ! ! ! ! Rural economic development. Building sustainable communities. Development of community enterprise and the social economy. Improving rural communities and accessibility. Much of this Priority supports complementary activity in this Plan. The Objective 2 SPD provides support for diversification measures not directly linked to agriculture and forestry. This includes both non-related on-farm activities and activities that are related to primary products but carried out "beyond the farm gate" by any eligible actor. Support will also be provided for a broad range of rural community development activities complementary to and going beyond those supported under Article 33 of the Rural Development Regulation. Priority 2 will provide ERDF support for activities eligible under indent 6 (development of rural villages), indent 7 (diversification of agricultural holdings) and indent 9 (development of agriculture-related infrastructure) of Article 33. These activities will be supported under the following measures. Support for the development of rural villages (indent 6) will be provided under Measure 2: Building sustainable communities. Diversification of agricultural holdings (indent 7) and the development of agriculture-related infrastructure (indent 9) will be provided for under Measure 1: Rural Economic Development. 346 In accordance with Article 43(1) of Regulation 1257/1999, the indicative amount of EAGGF Guarantee Funding, envisaged for expenditure under Article 33 in the Objective 2 and transitional areas of East Wales covered by the RDP, is 6 million euro for the period 2000 to 2006. This represents 75% of the 8 million euro allocated to support Article 33 measures during this period. LEADER+ LEADER+ is one of four "Community Initiatives" which are part of the Structural Funds Programme. It will complement mainstream programmes by promoting integrated schemes conceived and implemented by active partnerships operating at the local level. It will fit within the strategic framework established by the Rural Development Plan, and complement activities funded under Objectives 1, 2 and 3. However, the focus of LEADER+ is on innovation, with the opportunity to encourage the emergence and testing of new approaches to integrated and sustainable development. It seeks to encourage the implementation of integrated, high-quality, original strategies for sustainable development designed to encourage experimenting with new ways of: ! ! ! enhancing the natural and cultural heritage; reinforcing the economic environment, in order to contribute to job creation; improving the organisational abilities of their community. Eligibility conditions for the measures to be supported 9.11.10 These measures will operate throughout East Wales in rural areas. Projects emanating from rural communities and rural market towns will be eligible for support except where equivalent measures are provided for in the Objective 2 and Transitional areas Single Programming Document, in which case only non-objective 2 areas will be eligible. These measures will support capital and/or revenue expenditure. The limited overall funding available for Article 33 measures will mean that local partnerships will need to support small rural schemes that target areas of greatest need and which can act as a catalyst for further sustainable development. 9.11.11 Rural Communities are defined for the purpose of implementing the Article 33 measures as settlements that fall below a population threshold (to be defined). In addition the somewhat larger market towns that serve predominately rural hinterlands in East Wales will also be considered eligible. Conditions for the priority measures to be supported 9.11.12 Projects seeking support for "Basic services for the rural economy and population" (indent 5), "Renovation and development of villages and protection and conservation of the rural heritage" (Indent 6) and "Encouragement for tourist and craft activities" (indent 10) will need to demonstrate that they: ! ! ! ! Meet the needs of local communities. Involve and have the support of local communities. Form part of/or will result in the production of a local community based strategy. Provide added benefits to the area. 347 Projects seeking support for "Diversification of agricultural activities and activities close to agriculture to provide multiple activities or alternative incomes" will need to demonstrate that they: ! ! ! ! arise from a viable holding (as defined in Section 9.3); comply with the minimum standards regarding the environment, hygiene and animal welfare (where appropriate) (as defined in Section 9.2); their promoters possess, or are actively acquiring, adequate occupational skills and competence; and are themselves economically viable. Project selection and level of support 9.11.13 Project selection will be through competitive bidding rounds to the Welsh European Funding Office. In general, support will favour projects that demonstrate broad partnership involvement and which complement other local strategies. Aid Intensity 9.11.14 For all selected measures under Article 33 the grant rate will be a maximum of 50% of total eligible cost. Community contribution 9.11.15 The Community contribution will be 50% of public cost for indents 5,6,7 and 10 under Article 33. For indent 11 the Community contribution will be 25%. For all revenue bearing investments the terms of Article 47(2) of Council Regulation 1257/1999 which refers to the rates in Article 29(4b) of Council Regulation 1260/1999 will be respected Exceptions 9.11.16 Details of the exceptions being sought as defined under Article 37 (3) of Regulation 1257/1999 are set out in Section 9.4. Ongoing Contracts 9.11.17 There are no ongoing contracts from the previous programming period. 348 Indicators Breakdown by action of the following figures ! ! ! ! ! ! ! Number of projects Number of beneficiaries Total amount of cost borne by beneficiaries Total amount of eligible costs Total amount of support per reference unit Number of units receiving support Total public expenditure (of which EAGGF contribution) Village Renovation ! Number of rural buildings restored Diversification of Agricultural Activities ! ! ! ! ! ! Number of Initiatives established Number of promotional activities supported Number of farmer beneficiaries Number of farmers under the age of 40 assisted Number of alternative livestock enterprises created. Number of jobs created Encouragement of tourism and craft activities ! Number of new handy craft workshops created ! Additional bed space created ! Number of tourists visiting Infrastructure ! Number of farm tourism projects undertaken Protection of the Environment ! ! ! ! Tonnes of agricultural waste recycled Area of land protected by public access projects Number of public access projects with linkages to tourism/community initiatives Number of public access projects with specific provision for the disabled 349 350 PART 4: IMPLEMENTATION OF THE PLAN This part of the plan addresses points 10 to 16 of the Annex to Commission Regulation 1750/1999, together with the requirement for an ex-ante evaluation of the plan: 10 11 12 The need for any studies, demonstration projects, training or technical assistance Designation of competent authorities and bodies responsible Provisions to ensure the effective and correct implementation of the plan, including monitoring and evaluation, a definition of quantified indicators for evaluation, arrangements for controls and sanctions and adequate publicity Results of consultations and designation of associated authorities and bodies as well as economic and social partners Balance between the different support measures Compatibility and consistency Additional state aids Ex-ante evaluation 13 14 15 16 17 351 352 10. THE NEED FOR ANY STUDIES, DEMONSTRATION PROJECTS, TRAINING OR TECHNICAL ASSISTANCE 10.1. The need for two specific studies has been identified in preceding Sections of this plan, and more may arise in the future. They are: ! ! a study into the setting up of young farmers; and a study into land differentiation within the Less Favoured Areas 10.2. On young farmers, there is legitimate doubt as to whether a young entrants scheme within the parameters laid down in Article 8 of Regulation 1257/1999 would provide a real practical incentive for young farmers, given the considerable overall cost involved in entering the industry. The National Assembly has therefore decided to commission a study to identify the advantages and disadvantages of a young entrants scheme, and to identify other ways in which it might be possible to help young entrants to farming. The research will address the following issues: ! what impact is the current crisis in farming having on the number of younger entrants into farming and what would the impact of current trends be on the farming community in ten years time; why are young people not entering farming and what are the main structural and economic barriers to entry; would the scheme available under the Rural Development Regulation address these barriers; what would be the expected impact of the young entrants scheme in terms of the number of farmers attracted into farming; what would be the expected cost of the scheme; could a different scheme be devised which would better address the problems of attracting new farmers; and if a specific scheme to attract new farmers is not deemed desirable are there any other options for action to help encourage new farmers. ! ! ! ! ! ! 10.3 On land differentiation within the Less Favoured Areas, the study will establish more accurately the sustainable carrying capacity of the land and other relevant factors and build on the current differentiation between Disadvantaged and Severely Disadvantaged Areas. The conclusions will feed into a review of the payment structure of the Tir Mynydd/LFA scheme in 2002-03 and, if appropriate, a revision of the scheme will be put forward as a proposal for Plan modification at that time. 10.4. In addition, the Assembly has recognised the need to collate a more comprehensive set of baseline indicators for rural Wales (where available), based on 1999-00 data, against which the overall impact of its rural development policies - and in particular the efficacy of the strategies and priorities set out in this Plan - can be measured. As stated in Section 3(1), there is no single definition of a geographical area which can clearly be recognised as "Rural Wales". A number of different areas are relevant for statistical purposes 353 and the enhanced baseline indicators will reflect this. More important than an unambiguous definition of rural Wales - whose achievement would be neither practical or desirable - is the need to draw on a broad span of data sources that reflect the current state of the rural economy and the quality of life of those living and working in the countryside, in market towns or in rural villages. 10.5. The Assembly plans to produce, in 2000-01, a statistical digest on rural Wales as part of its "Statistical Focus" series using the most up-to data information available from the range of sources available to the Assembly. These sources include the new Welsh Index of Deprivation which will be available from February 2000. This index will use new datasets obtained by the Assembly (for example, on access to services) which, in addition to the Index itself, can enhance the baseline indicators included in this plan. The collation of this information will supplement the wide range of data already available and reflected in this Plan. There will be a particular focus on those indicators against which the impact of the overall rural development strategy adopted in all regions of Wales can be measured. 10.6. So far as demonstration projects are concerned, the Farm Development Strategy Group of the Wales Agri-Food Partnership is planning to investigate the possibility of setting up a comprehensive, coordinated network of demonstration farms across Wales, with a view to promoting best practice in the various sectors. 10.7. The financial table in Section 8 does not include a specific allocation relating to technical assistance. Should such assistance be required, it will be necessary for it to be found from within the individual measures to be supported, provided that a clear justification for its use can be made. 354 11. DESIGNATION OF COMPETENT AUTHORITIES AND BODIES RESPONSIBLE 11.1. The National Assembly for Wales is the competent authority designated by the Member State in accordance with Article 41 of Council Regulation 1257/1999 to prepare the Rural Development Plan for Wales and to plan its implementation. The work of the competent authority will be complemented by that of the additional paying agencies, the Countryside Council for Wales (in respect of Tir Gofal) and the Forestry Commission (in respect of the Woodland Grant Scheme). Further details of the paying agencies are contained in Section 12. The contact details for the National Assembly are as follows: National Assembly for Wales Crown Buildings Cathays Park Cardiff - UK CF10 3NQ Tel: Fax: E-mail: Internet: +44 2920 2082 5111 +44 2920 2082 3327 assembly.info@wales.gsi.gov.uk www.wales.gov.uk 11.2. The National Assembly has established the Welsh European Funding Office to manage the implementation of the Plan. The Welsh European Funding Office will be responsible for the efficiency and correctness of management and implementation of the Plan. Further details of the Welsh European Funding Office, and of the detailed arrangements for plan implementation, are contained in Section 12. 11.3. Officials of the Welsh European Funding Office will be employed by the National Assembly and have the status of civil servants. Other officers may be seconded to the Welsh European Funding Office by the economic and social partners or other relevant competent bodies, who will be involved in the implementation of the measures and actions approved by the Monitoring Committee. 355 356 12. PROVISIONS TO ENSURE THE EFFECTIVE AND CORRECT IMPLEMENTATION OF THE PLAN, INCLUDING MONITORING AND EVALUATION, A DEFINITION OF QUANTIFIED INDICATORS FOR EVALUATION, ARRANGEMENTS FOR CONTROLS AND SANCTIONS AND ADEQUATE PUBLICITY Introduction 12.1 Implementation of the plan will be founded on the following principles: ! a strategic approach to programme delivery (though with provision for local delivery and single projects where appropriate); close integration of plan implementation with the National Assembly's own policies and programmes; a management process which will be designed to allow input from key players, including the private sector, and will promote the Assembly's cross-cutting aims such as sustainability, equal opportunities and social inclusion; implementation delivered by a central Programme Executive which will pro-actively engage with the partners and offer support for project development. Its responsibilities will include financial control and payments; effective monitoring and evaluation so that progress can be measured and implementation adapted to meet changing needs; effective arrangements to meet the legal, regulatory and accountability requirements of both the Assembly and of the European Commission. ! ! ! ! ! 12.2 The plan identifies the strategic priorities and the key measures which will be pursued. The implementation arrangements are designed to ensure that action is co-ordinated at the national, regional or local level in order to provide the most appropriate and cost-effective use of the limited resources which are available. Access to funding: national, regional and local packages, and single projects 12.3 Access to EAGGF funds under the plan will be possible in three ways, through: ! ! ! national "themed" packages; regional and local packages; single projects. 357 Themed packages 12.4 These will generally cover the entire plan area, and may be administered as all-Wales schemes, with funding derived from a variety of sources. They will implement a single measure under the plan, allowing a strategic focus for one part of its delivery. It will be essential to ensure that implementation of such packages is co-ordinated with actions being taken under other measures, to ensure than the integrated approach to plan delivery, which offers the prospect of significantly enhanced outputs through the adoption of a coherent approach, is preserved. 12.5 A "package" is a group of projects which together provide a coherent and integrated response to a specified need or problem and will deliver specified outputs. A single organisation would take responsibility for formally applying for and administering the funds allocated to a package. Individual projects in the relevant area - geographical or thematic - would be funded from the package. The lead organisation would be required to work with a defined partnership group both in the design of actions and in their implementation. This would ensure an inclusive approach as well as coherence with local and regional initiatives. It follows that the process would not involve the grant of a monopoly over particular activities to the chosen lead body. For example, agreement on a national strategy for the processing and marketing of agricultural products would still permit regional and local initiatives to be developed and funded. The important issue is that there should be coherence between the two. 12.6 A key example of a measure where delivery via a themed national package offers significant advantages in terms of coherence and efficient administration is that relating to processing and marketing of agricultural products. There is a need for a clear, straightforward delivery mechanism to facilitate access by businesses, farming groups and others in the agri-food industry to the available EU funding. However, it will not be appropriate for the Programme Executive charged with managing the funds to handle individual claims from businesses, farming groups or others in the industry. 12.7 To ensure co-ordinated delivery of the national strategy reflecting local priorities it is intended that the Welsh Development Agency, and specifically its Food Directorate, should take on the role of managing EU structural funds in the agri-food sector, working with the Agri-Food Partnership. The Agency would bid for and subsequently manage a package under each of the funds for each area as appropriate and make resources available to the industry depending on the location and type of project. It would also advise on the availability of matching funding from local authorities, government agencies, the private sector or other potential partner bodies or the Assembly as appropriate, and help to signpost potential applicants through the EU funding process; other organisations such as Business Connect would help signpost project sponsors to the Agency to access the EU structural funds. The Agency would need to develop, in collaboration with the Assembly (which has the experience of administering the present schemes) new grant schemes to cover the EU funds and establish administration and audit systems to enable them to carry out the work effectively and efficiently. 12.8 These proposals are specifically tailored towards the delivery of a coherent package of projects under the Rural Development Plan but the mechanism would also be capable of being applied under the Objective 1 SPD for projects in West Wales and the Valleys, and indeed to other appropriate funds in order to build up a coherent, effective all-Wales approach to the development of part of the established agrifood strategy for Wales. 358 12.9 Similarly, a national approach, building on the mechanisms which are already in place, will be taken to the delivery of measures relating to less favoured areas (the reformed Hill Livestock Compensatory Allowance scheme) and to agri-environment schemes, namely Tir Gofal (where the Countryside Council for Wales is responsible for administration of the scheme) and the Organic Farming Scheme (which is administered by the National Assembly). The Forestry Commission in conjunction with the National Assembly is responsible for the administration of the forestry measures described in Section 9.10. Regional and Local Packages 12.10 Proposals for "packages" may also be drawn up at a regional level or locally across a wide range of programme activity, particularly in respective of measures related to the promotion and adaptation of rural areas. Local strategies might be expected in the main to relate to individual local authority areas, though the lead bodies might not be local authorities themselves (in certain fields, it is entirely possible that a community body or agency might take the lead). 12.11 The system would allow approval of an Action Plan to be implemented over a period of years. Such Action Plans are one of the key tools for delivering rural development projects in a co-ordinated and strategic manner across Wales. They will allow sets of projects or "packages" to be delivered in a coherent and mutually reinforcing way. Plans would include an estimate of total costs, the amount of partnership funding in place or requested and the amount of EU funding required. 12.12 Local packages will be expected to be rooted in an effective partnership of local interests, including the private sector where this is appropriate. The proposals would be required to identify the problem to be addressed, the key actions to be pursued and how these actions would tackle local needs as well as contributing to delivering the objectives, outputs and targets set out in the plan. Where appropriate, the plans for these packages would demonstrate how the proposed actions would complement relevant themed packages in place at the national level. 12.13 It is intended that wider rural development measures, including measures under Article 33 of Regulation 1257/1999 for the promotion and adaptation of rural areas, will be delivered throughout Wales by means of such local Action Plans or "packages". Developing Action Plans 12.14 Action Plans will need to contain the following elements: ! a clear strategy, stating their overall aims and objectives and how they link into the framework set by the Rural Development Plan and the relevant programming documents. a statement of the resources needed, by priority, measure and year. a set of clear indicators and targets for action which correlate to those of the Rural Development Plan and the relevant programming documents. This should include providing baseline information relevant to particular measures. If information is not available then the plan should show how it will tackle this deficiency. ! ! 359 12.15 Plans will also need to state how they link to other relevant domestic policies and initiatives at either national or local level. Reference must also be made to their compatibility with either themed or local packages that cover similar ground. The activities and projects identified should be clearly linked to the strategy of the action plan. The Action Plan itself will consist of a rolling programme of projects. The submitted plan will need to provide particular projects where known and/or a range of indicative projects to ensure that the Monitoring Committee can be persuaded of the viability of the plan. By their nature indicative projects cannot be regarded as being binding on their proposed sponsors. Action Plans will need to clearly show where they target particular geographical areas or sectors for support and how this relates to the broader strategy being pursued. 12.16 Action Plans will clearly need to show how they address the key cross-cutting issues of sustainable development, equal opportunities and social exclusion. Projects will need to demonstrate how they contribute to the Plan in this regard. Action plans will also need to demonstrate a clear exit strategy showing how the activities will continue over the longer term, and will need to demonstrate clearly the partnership process used in their development. Management and delivery of Action Plans 12.17 Action Plans will be directed by partnership bodies. The funds themselves will be managed by Accountable Bodies (see below), organisations who will be part of the partnerships (separate guidance on their specific responsibilities will be provided). In terms of policy making and project selection, Accountable Bodies will be equal members of the partnership. In developing administration procedures Accountable Bodies will take a leading role given their specific accounting responsibilities. This does not preclude partnership involvement but recognises the greater responsibility that Accountable Bodies are assuming. 12.18 Action Plans will need to be managed by a partnership management board which will need to be clearly representative of the main partners with a legitimate interest in the plan. The management board will require administrative support, normally provided by the Accountable Body. The management board will be responsible for: ! ! ! ! project selection and levels of support; drawing up, publicising, consulting upon and submitting the Action Plan; monitoring of progress in delivering the Action Plan and achieving its targets; agreeing any changes to the Action Plan in consultation with the relevant Monitoring Committee. 12.19 Partnership boards, advising the Accountable Body will develop processes for accepting applications for projects. Details of support given to applicants will need to be decided by the board as will the structure of application forms and processes, taking into account the details required by the Monitoring Committee. Detailed selection criteria and scoring systems will be devised locally but must adhere to Monitoring Committee guidance and be fully consistent with the measures described in this Plan. 360 12.20 The Accountable Body in agreement with the partnership will need to agree with the Monitoring Committee its procedures for ! ! ! ! administration and financial management arrangements; project appraisal; monitoring and Evaluation; Allowing for proper Accountability of the public money it is responsible for. LEADER groups 12.21 It is expected that mature LEADER groups from the first two rounds of the LEADER programme in Wales and new groups established under the LEADER plus programme will be included on the partnerships drawing up local Action Plans. These groups will be able to apply for project funding within the framework set out in these plans. Audit arrangements 12.22 The Accountable Body should make documents available and provide reasonable access for inspection visits and audits by representatives of the Programme Executive (on behalf of the National Assembly), the National Audit Office, the European Commission or the European Court of Auditors. The Accountable Body must comply within a reasonable period with any requests for information concerning the progress of the Plan in whatever form. Single Projects 12.23 Access to funding under the plan will also be possible for single projects, outside the scope of conventional packages, although it is the intention to avoid the difficulties encountered in some previous programmes, where large numbers of small projects which have not demonstrated strong synergy and complementarity have been supported. Accountable Bodies 12.24 At whatever spatial level, management of packages will be undertaken by organisations capable of taking on the responsibilities of an "accountable body". This will ensure proper management of the funds and compliance with EU and domestic regulations. Accountable Bodies will need to be a legal entity and to have in place effective project management and appraisal systems, taking into account both the selection criteria agreed by the Monitoring Committee and Commission guidance on eligible activities and expenditure. They will also require appropriate financial management systems to meet EU requirements. 12.25 Each Accountable Body would, on agreement with the Monitoring Committee, receive the formal delegation necessary to implement the agreed package in association with local partners, together with responsibility for achieving the forecast outputs. The existence of Accountable Bodies alongside the programme executive will make it desirable to standardise procedures under a common set of instructions. It will be important to ensure consistency of appraisal procedures and decisions on technical issues across all accountable bodies. 361 Management of plan implementation 12.26 The new Programme Executive, which will be responsible for managing all European programmes from 2000 onwards, including the Rural Development Plan, will be an executive agency accountable to the National Assembly and headed by a Chief Executive recruited through open competition (this will be a Senior Civil Service appointment to which the usual rules will apply). The staffing of the organisation will be drawn from the existing staff of the Welsh European Programme Executive and from Assembly staff responsible for payments and other functions under current programmes. Additional staff will be required, reflecting the much larger scale of the Structural Funds and other European programmes post 2000. 12.27 As is appropriate for an executive body within the Assembly, an Assembly Secretary will answer in the Assembly for the organisation's work, and will approve its corporate and operational plans. It will produce separate accounts, which will be subject to scrutiny by the relevant Assembly Committees and the Audit Committee. It will also produce an Annual Report, which will be laid before the Assembly. 12.28 The Programme Executive's detailed responsibilities will be: ! To administer the plan in accordance with the operational and other requirements set from time to time by the Monitoring Committee and consistent with the documents agreed by the European Commission, and to provide the partnership with any services associated with or complementary to those functions; To provide administration for the Monitoring Committee and carry out any other activities delegated to it by the Monitoring Committee or by the Assembly; To promote actively with the partnership at national, regional and local level the preparation and delivery of packages, projects and initiatives; To provide information, advice and assistance to all potential applicants for financial support under the plan and to disseminate examples of best practice; Generally, to publicise and promote the availability and purpose of European co-financing under the plan and associated programmes; To manage efficiently the application and appraisal processes determined from time by the Monitoring Committee; To develop and monitor implementation of appropriate guidance for Accountable Bodies and other applicants involved in the allocation and use of the available resources; To ensure strict compliance with regulations and directives issued by the European Commission, the Member State or the Assembly. To put effective arrangements in place for management, monitoring and evaluation of the plan; To put in place arrangements for the effective integration of European funds with the Assembly's own regeneration schemes. ! ! ! ! ! ! ! ! ! 362 12.29 The composition of the executive will include: ! area based teams to act as the focal point for liaison with regional and local partnerships in the four economic regions of Wales. There would in addition be staff specifically responsible for providing a coherent approach to the problems of rural Wales; a team acting as the link with accountable bodies for the national themed packages; a unit providing a source of expertise in the management of major projects. This might also have a broader responsibility for liaison with the private sector; dedicated staff tasked with promoting the cross-cutting issues underpinning the European programmes, including equal opportunities issues; a separate monitoring and evaluation team to provide independent advice on programme performance and achievements. ! ! ! ! Monitoring and evaluation 12.30 Monitoring and evaluation will ensure the quality and effectiveness of implementation of the plan through regular assessment of progress towards achievement of the targets identified. It will involve the organisation and co-ordination of the data relating to the output indicators (against the baseline data established by the study proposed in Section 10) and those concerning qualitative aspects of implementation. Ex-ante evaluation 12.31 Article 43 of Regulation 1750/1999 requires that an ex-ante evaluation should be carried out to identify the disparities, gaps and potentials of the current situation and to assess the consistency of the proposed strategy with that situation. The ex-ante evaluation is also required to assess the expected impact of the selected priorities for action, and to verify the proposed arrangements for implementation, and consistency with other policies. 12.32 As required by Article 43(2), the ex-ante evaluation, which has been prepared by independent consultants appointed by the National Assembly, forms an integral part of this plan. Annual progress reports 12.33 The annual progress reports required under Article 41 of Regulation 1750/1999 will be prepared by the National Assembly not later than four months after the end of each calendar year. They will contain information relating to: ! ! ! ! major socio-economic trends; progress with priorities ands measures; action taken to ensure effective implementation; and measures taken to ensure compatibility with Community policies. 363 Mid-term and ex-post evaluations Mid Term Evaluation 12.34 In accordance with Article 44(2) of Regulation 1750/1999, the National Assembly, in co-operation with the Commission, will arrange for an independent mid term evaluation of programme progress, to be completed by 31 December 2003. 12.35 This evaluation will measure the initial achievements of the programme and will include a critical analysis of the data collected through monitoring, including those forming part of the annual reports. It will measure the extent to which the objectives pursued and the targets are gradually being attained, explain any discrepancies and forecast the results of the operation. It will also express a view about the extent of progress. Ex post evaluation 12.36 The ex post evaluation, to be completed by 31 December 2008, will be arranged by the National Assembly in co-operation with the Commission, in accordance with Article 44(2) of Regulation 1750/1999. It will examine in particular the utilisation of resources and the effectiveness and efficiency of the assistance provided and its impacts. The Monitoring Committee 12.37 Article 48(3) of Regulation 1257/1999 provides for a Monitoring Committee to be established if this is regarded as appropriate. 12.38 The National Assembly takes the view that a Monitoring Committee of some 15 to 20 members would perform a number of valuable roles, in particular in monitoring overall progress towards achieving the strategic priorities identified in the plan. It therefore proposes to establish such a Committee. 12.39 The European Task Force recommended that small Monitoring Committees should be established for programmes in Wales, since such Committees would be able to take a strategic view of their responsibilities. Subsequently, a membership model whereby one-third of the membership is drawn from government, one-third from the private sector and one third from other sectors, has been suggested. 12.40 The National Assembly proposes that the Rural Development Plan Monitoring Committee should consist of 15 members together with a Chairperson to be provided by the Assembly. It is recognised that such a composition would inevitably exclude various interest groups and public agencies, including members of the Rural Partnership, but the over-riding need is for the Committee overall to be kept to a manageable size, in order to allow it to retain a strategic focus. Representatives of environmental interests coming from the National Assembly for Wales and Non-Governmental Organisations will participate in the work of the Committee. 12.41 In deciding membership of the Monitoring Committee, the National Assembly will promote the balanced participation of men and women. It is proposed to invite each participating organisation to list 364 (say) three candidates for membership, which would include alternates, with information on each nominee. The relevant Assembly Secretary would then decide the final list of members in a way that promotes balanced participation. This approach could also take into account the Assembly's wish to promote greater participation by other groups such as the disabled and those from ethnic minorities. 12.42 Monitoring Committees for the range of European programmes impacting on Rural Wales will be established in such a way as to ensure a consistent and coherent approach either by establishing "common" committees or by ensuring a level of common membership between committees. 12.43 The Monitoring Committee will: ! ! ! confirm the physical and financial indicators to be used to monitor the implementation of the plan; review progress made towards achieving the specific objectives of the plan; examine the results of implementation, particularly the achievement of the targets set for the different measures and the mid-term evaluation; consider and approve the annual progress reports before they are sent to the Commission; consider and approve any proposal to modify the plan ! ! Modification of the Plan 12.44 Amendments to the plan must, in accordance with Article 35 of Regulation 1750/1999, be substantiated in terms of the problems of implementation which give rise to the need for a modification; the expected effects of the amendment; and the financial implications. Amendments must be submitted to the Commission in one single proposal each year. 12.45 The following amendments to the plan must be approved by the Commission in agreement with the Member State and after receiving the opinion of the Monitoring Committee: (a) (b) (c) (d) those affecting priorities; those changing the main features of the measures, including changes to the rate of co-financing; those changing the overall amount of Community support; those changing the financial allocation for any measure by more than 10% of the amount provided for the entire programming period, calculated on the basis of the programming document approved by the Commission; those changing additional financing in the form of State Aid granted for one of the measures by more than 10% of the amount provided for the entire programming period, calculated on the basis of the programming document approved by the Commission. (e) Points (d) and (e) shall not apply to measures with a financial allocation accounting for less than 5% of the total amount allocated to the programme for the entire programming period. 365 Financial Provisions 12.46 The financial disciplines required under Articles 37 to 39 of Regulation 1750/1999 will be respected, while payments will be made in full to final beneficiaries as provided for under Article 32. 12.47 The Programme Executive will be responsible for all aspects of the financial management of the plan and for ensuring the deployment and use of funds in accordance with the highest standards of propriety and value for money and relevant European and other regulations and procedures. Its detailed functions will include: ! ! the submission of payment claims to the European Commission for European Structural Funds; ensuring that that financial control mechanisms are effective and that accurate forecasts of receipts and expenditure are built into the Assembly's budget Estimates; monitoring project achievement to ensure that the activity targets, outputs and impacts set out in the plan are met; making payments and advances to beneficiaries as soon as possible in line with guidance to be issued by the Monitoring Committee; developing systems to monitor the plan to ensure that stated objectives are met and that payments are properly authorised, and that value for money is obtained; verifying on a regular basis that operations financed by the Community have been properly carried out; preventing, and where necessary taking action against irregularities; ensuring the evaluation of programmes, the revision of baselines and the production of annual and final reports as appropriate. submitting annual and final reports to the Commission ! ! ! ! ! ! ! Codification 12.48 The Member State undertakes to ensure that all bodies designated by the authority empowered to certify the reality of the expenditure and involved in the management and implementation of these operations maintain either a separate accounting system or an adequate accounting codification capable of providing detailed and complete summaries of all transactions involving Community assistance. This is intended to facilitate the verification of expenditure by Community and national control authorities. 12.49 The accounting system based on supporting documents which can be checked must be able to provide: ! Detailed statements of expenditure including, for each financial beneficiary, details of the monitoring of each measure part-financed and setting out in national currency the amount of receipted expenditure and showing the dates of receipt and payment in the case of each supporting document; Summary statements of expenditure relating to all measures part-financed. ! 366 The concepts of legal and financial commitment, expenditure actually incurred and final beneficiaries. 12.50 "Legally binding arrangements" and "requisite financial commitments" comprise the decisions taken by the financial beneficiaries to implement eligible operations and the allocation of the corresponding public funds. These definitions have to take account of the particular features of institutional organisations, of the administrative procedures of each Member State and of the nature of the operations. 12.51 "Expenditure actually incurred" must relate to payments effected by the final beneficiaries, supported by receipted invoices or accounting documents of equivalent probative value. 12.52 Under Article 29 of Regulation (EC) No 1260/99, Community assistance is to be calculated in relation to either the total eligible cost or the total public or similar eligible expenditure. The financing plan sets out the options selected. "Final beneficiaries" are: ! ! public or private bodies or firms responsible for commissioning works; in the case of aid schemes and aid granted by bodies designated by the Member States, bodies which grant such aid; the bodies concerned shall institute the collection of financial information (survey of receipted invoices or accounting documents of equivalent probative value). Transparency of Financial Flows ! 12.53 Payments from the Commission are received in a Treasury Account at the Bank of England, where they are converted into Sterling. Each sterling amount is then transferred to the National Assembly, which holds it in a specifically identified account. This provides for standards of financial control consistent with those applied to national expenditure. 12.54 For EAGGF funded projects, the Programme Executive will arrange for payment of grant on receipt of certified expenditure claims from beneficiaries. Final payments are not made until projects are complete and audited. 12.55 The Programme Executive will be responsible for maintaining and monitoring all claims and expenditure, and for preparing payments claims to the Commission. Controls and Sanctions 12.56 National audit procedures, checks and controls to prevent the occurrence of irregularities and to detect them and their perpetrators, are applied also to co-financed programmes including the Rural Development Plan. 367 Financial control and irregularities 12.57 Checks may be carried out in accordance with Article 47 of Regulation 1750/1999 to ensure that funds are being spent in accordance with the objectives laid down, the rules in force and the principles of sound financial management. The checks must enable the verification of records to ensure that all expenditure charged to assistance has actually been incurred and is correct, eligible and regular. The Member State and the Commission will exchange immediately all relevant information concerning the results of these checks in accordance with Article 38 of Commission Regulation No 1260/99 concerning irregularities and the recovery of sums wrongly paid in connection with the financing of the structural policies. 12.58 Verification will take the form of administrative and on-the-spot checks, in a form to be defined by the National assembly, and will where appropriate make use of relevant Integrated Administration and Control System (IACS) records. On-the-spot checks will cover at least 5% of beneficiaries each year, spread across the year and across all the measures implemented under the plan. Reduction, suspension and cancellation of assistance, and recovery of sums wrongly paid 12.59 In accordance with Article 48 of Regulation 1750/1999 the National Assembly will determine a system of penalties to be imposed in the event of breaches of the obligations entered into by beneficiaries. 12.60 The Member State and the beneficiaries will ensure that the Community finance is used for the purposes intended. If an operation or measure appears to justify only part or none of the assistance allocated, the Commission may reduce or suspend the assistance and the Member State will then recover the sums due as provided for in Regulation 1260/1999. The authority responsible for repaying to the Commission sums wrongly paid is the authority designated by the Member State. In disputed cases, the Commission will undertake a suitable examination of the case in the framework of the partnership, in particular requesting the Member States or other authorities designated by it to implement the operation to submit their comments within two months. Information and Publicity 12.61 The Monitoring Committee will be responsible for developing a strategy for publicising the plan and the actions emanating from it. The preparation of the plan has already received considerable publicity, partly as a result of extensive public consultation. The version submitted to the Commission and that subsequently agreed with the Commission will be made widely available in electronic and/or print form to all partner organisations including the social partners, the voluntary sector, and organisations with responsibility for equal opportunities and the environment. Widespread details of all aspects of the programme will be provided on the National Assembly's website. 12.62 Detailed information on application procedures will be provided to a wide range of partners by the Programme Executive. Successful project sponsors will also be required to provide public information about the Community's contribution to their particular projects. 368 13. RESULTS OF CONSULTATIONS AND DESIGNATION OF ASSOCIATED AUTHORITIES AND BODIES AS WELL AS ECONOMIC AND SOCIAL PARTNERS 13.1. The preparation of the plan has involved a substantial degree of consultation with economic and social partners, both in terms of formal consultation exercises and bilateral and multilateral discussions with the principal organisations with an interest in the development of rural Wales. The Partners 13.2. The main economic and social partners, many of whom are members of the Rural Partnership (see below), include national bodies, local authorities, the farming unions, environmental bodies and those representing the voluntary sector. All of these bodies were consulted formally on a number of occasions during the process of debating the issues of greatest relevance for the development of rural Wales and then constructing the strategy and priorities described in this plan. 13.3. The agricultural, environmental and other bodies to be primarily involved in the implementation and monitoring of the plan have been identified in the relevant parts of section 9; they include the Welsh Development Agency, the Countryside Council for Wales and the Forestry Commission in addition to the National Assembly itself. The Monitoring Committee proposed in Section 12 (whose membership has yet to be decided ) will play a key role in ensuring an appropriate balance between the measures. Results of Consultations 13.4. Following wide consultation on its remit and membership, the Welsh Office established a Rural Partnership in November 1998, chaired by the then Minister for Rural and Countryside Affairs. The National Assembly has since affirmed its commitment to the Partnership, which is now chaired by the Assembly Secretary for Agriculture and Rural Development. The Partnership is an advisory body with a remit to identify policy and practice capable of delivering substantial benefits to rural Wales and to make recommendations on specific rural problems. 13.5. Its membership brings together a wide range of organisations that can help contribute to the future development of rural policies and programmes in Wales. The public, private and voluntary sector are all represented. As well as the 27 organisations represented on the Partnership itself, a network of over 150 organisations with an interest in rural policies has been established. This wider network has been consulted on regular occasions about the Partnership's on-going work. 13.6. The Partnership produced a statement on Rural Wales in July 1999 which set out a vision for rural Wales and priorities for action. This statement was distributed to over 1200 organisations and individuals. In a Plenary debate on 7 July, Assembly members noted the document and agreed to take account of the Partnership's work in promoting the rural economy through the development of coherent policies and programmes. The Assembly's Agriculture and Rural Development Committee subsequently considered the statement on 14 July. It undertook to consider the document as part of its forward work programme and to promote its values for the benefit of all communities in Wales. 13.7. The statement has informed the development of the strategy and priorities for Rural Wales set out in this Plan. 369 13.8. The European Structural Funds Task Force was established in October 1998 by the Welsh Office as a public, private and voluntary sector partnership. The partnership's remit was to produce a comprehensive set of proposals for the National Assembly. The Task Force set up a number of sub-groups. Of direct relevance to the production of the Rural Development Plan were the Rural Sector Group and the two of the Regional Partnerships. The Rural Sector Group was chaired by the Welsh Development Agency's Rural Unit and embraced more than 30 different organisations with an interest in rural Wales. The West Wales and East Wales Partnerships each considered the needs of their areas and made recommendations on Structural Funds priorities. The differing needs of rural and urban areas within each of these areas were identified by these partnerships. The reports of each of these three sub-groups of the European Task Force have informed the production of this Plan. 13.9. A further group reporting to the Task Force assisted in the drafting of the rural development measures in the Objective 1 Single Programming Document, while the European Task Force carried out a public consultation on its proposals for a National Economic Development Strategy, the Objective 1 Single Programming Document and the Objective 3 Operational Plan in Summer 1999. The European Structural Funds Task Force was also informed regularly of progress towards the preparation of this Rural Development Plan and endorsed the approach taken. 13.10. Public consultation on the relevance and relative importance of the potential measures designed to help the agricultural sector was centred upon the document Farming for the Future, which was launched at the Royal Welsh Agricultural Show in July 1999 by the Assembly Secretary for Agriculture & Rural Development and the Chair of the National Assembly's Agriculture & Rural Development Committee. The document outlined the main problems facing the farming industry in Wales and proposed a long-term strategy aimed at promoting a sustainable and viable agricultural sector. It also proposed a strategy based on selected priorities within the menu of measures made available under the Rural Development Regulation. 13.11. The responses to Farming for the Future generally supported the proposed strategy, although inevitably there was no overall consensus on all issues. The main points raised were as follows: ! ! ! a clear long-term vision for the future of the Welsh agricultural industry was essential; an overall strategy allowing for the development of local innovative projects must be established; lack of local slaughtering and processing facilities were seen as a potential constraint for adding value to the produce of Wales; more effective advice services for farmers, administered under one umbrella organisation, were needed; Tir Gofal received much support as a mechanism for environmental delivery although there was widespread concern over the levels of funding; there was a strong call for a level playing field with other European countries and the rest of the World in terms of environmental cross compliance and other legislative constraints. ! ! ! 370 13.12. There was general overall agreement with the proposed objectives, namely that: ! ! ! ! agriculture must become more viable; Welsh agriculture and land use must become more sustainable environmentally and ecologically; extreme changes in the structure of family farms must be guarded against; farming families need to adapt, and support services should focus more coherently on helping them do this. 13.13. Environmental bodies in particular were keen to see the emphasis on the environment, sustainability and open access, while training organisations suggested that a cultural leap was required to change deep rooted values and beliefs. 13.14. Most respondents agreed with the general principles of the agri-food strategy being developed at a national level; many identified the need to provide a framework for enterprise to flourish with leadership and direction while ensuring that the national framework did not stifle local innovative projects. The role of the Agri-food Partnership was identified as key to the success of the agri-food Programme. 13.15. On 1 November 1999 a further consultation document was issued, seeking to elicit partners' views on the overall priorities to be adopted, not only in respective of agricultural measures but also in relation to forestry measures and the promotion and adaptation of rural areas. The responses generally confirmed those that had been made earlier in the year, and in general endorsed the proposed strategy and priorities for action. The key issues identified in the 51 responses are summarised below. 13.16. The majority of respondents' comments concentrated on the four accompanying measures. Overall, the measures proposed in the consultation paper were endorsed. Support for agri-environment, Compensatory Allowances and afforestation of agricultural land was wide-spread but there was relatively little support for the Early Retirement measure. By contrast, comments on the non-accompanying measures were both relatively fewer and less detailed. Overall, there was general support for the measures proposed - processing & marketing of agricultural products, adaptation and development of rural areas and afforestation of non-agricultural land. 13.17. A number of themes were evident across the range of responses. These included: ! concern about the level of funding likely to be provided by the regulation to implement the measures adopted; the level of funding available to support non-accompanying measures was unlikely to have a major impact on the problems in East Wales; mixed views on the proposals for modulation: some felt it was a unnecessary reallocation whilst others deemed it essential to increase available funds for the accompanying measures; the need for greater co-ordination and integration of rural services to improve quality and ensure maximum use of existing provision; the need to adopt a holistic and integrated approach to rural development across Wales. ! ! ! ! 371 13.18. There was general support for resources to be devoted to Article 33 measures although there was a view that it would be more appropriate for the adaptation and development of rural areas to be funded from Objective 2 and LEADER Plus monies. It was considered that this would ensure maximum funding under the Rural Development Regulation for other measures to support agriculture and forestry. The "bottom up" approach to community regeneration was welcomed, but it was emphasised that the measures adopted needed to complement other priority measures for maximum impact. It was considered that measures adopted within article 33 needed to focus on promoting sustainability, improving GDP and assisting agriculture to modernise, diversify and remain competitive. 13.19. More specifically, further consultation has also been carried out on the successor scheme to Hill Livestock Compensatory Allowances, and a revised scheme, taking account of comments received, has been devised. This is the Tir Mynydd scheme which is included in Section 9.7. 13.20. All of the responses to the various consultation exercises have been considered and where possible the views expressed have been reflected in the way in which the strategy and priorities for rural development have been constructed, and the priority measures have been selected. In particular, and as noted above, the scheme for the successor scheme for the less favoured areas has been substantially amended as a result of consultations, especially with the Country Landowners Association, the National Farmers Union and the Farmers Union of Wales. Similarly, the proposals for the new Tir Gofal scheme have been drawn up in close collaboration with the Countryside Council for Wales, the Farming and Rural Conservation Agency, the farming unions and other partners. 372 14. BALANCE BETWEEN THE DIFFERENT SUPPORT MEASURES 14.1. The indicative overall financial tables in Section 8 illustrate the attempts which have been made to achieve a balanced programme of action, within the very real financial constraints which exist. The need to retain a credible level of funding for support to Less Favoured Areas, and to continue to provide resources for the development of the Tir Gofal and Organic Farming schemes in order to deliver the key components of the strategy outlined in Section 6 has had the inevitable consequence of directing the majority of resources to the accompanying measures. 14.2. The concentration of activity under the Plan on support for less favoured areas and for agrienvironmental schemes is, in the National Assembly's view, justified in terms of the contribution which these measures make to the sustainability in economic, social and environmental terms of the Welsh countryside. 14.3. The effect is that the resources able to be devoted to the non-accompanying measures, in particular the processing and marketing of agricultural products and the promotion of the adaptation and development of rural areas, are insufficient to achieve a balance between the different support measures with which the Assembly is wholly satisfied. Nevertheless, despite the clear benefits in terms of diversification and higher-value production which could flow from a greater emphasis on nonaccompanying measures, the acute shortage of resources requires a concentration on key social, economic and environmental levers, partly in order to satisfy existing commitments but also in order to take account of the clear lessons learned from previous programmes (summarised in Section 5.2). 14.4. Should further resources become available during the plan period it would be the intention of the Assembly to devote a significant proportion of these additional resources largely to the nonaccompanying measures in order to correct the position, and to begin to achieve the wider long-term objectives for agriculture, forestry and wider rural development throughout rural Wales. Agri-environment measures 14.5. The agri-environment measures referred to in Section 5.1 (existing schemes, including Environmentally Sensitive Areas, the Organic Aid Scheme, Tir Cymen and the Habitat and Moorland Schemes) apply within those parts of the plan area which are described in the relevant parts of that Section. 14.6. The measures referred to in Section 9.8 (Tir Gofal and the Organic Farming Scheme) are available throughout the plan area. 373 374 15. COMPATIBILITY AND CONSISTENCY 15.1. The National Assembly will ensure that measures undertaken under this plan comply with the provisions of the Treaties and with the instruments adopted pursuant thereto, and are compatible with other Community policies. Other instruments under the Common Agricultural Policy 15.2. The Assembly, which administers the measures implemented under other instruments of the Common Agricultural Policy, will ensure consistency between rural development measures and other measures implemented under the common market organisations and agricultural quality and health measures. It is the Assembly's view that the measure proposed in the Plan are consistent with the Common Agricultural Policy. 15.3. The Assembly will also ensure consistency between the different rural development support measures themselves. It has already taken steps to ensure that where schemes contribute to the same or similar objectives, the arrangements for funding such measures take account of any potential for double funding or for inconsistencies in interpretation, and that the implementation arrangements eliminate such difficulties. Protection of the Environment 15.4. Measures must abide by the principles and objectives of sustainable development as laid down in the Community programme of policy and action in relation to the environment and sustainable development included in the Council Resolution of 1 February 1999. They must also comply with Commission legislation on the environment. Priority must be given to achieving the objectives set out in that legislation insofar as it is connected with the regional development envisaged. It is intended that the Tir Gofal Scheme should not simply comply with the principles and legislation relating to the environment but should make a very significant positive contribution to achieving environmental objectives, including those of the UK Government's Biodiversity Action Plan. Competition Policy 15.5. For the measures under indents 6, 7 and 10 of article 33 of Council Regulation (EC) No 1257/1999 of 17 May 1999 on support for the development from the EAGGF and amending and appealing certain Regulations, which fall outside the scope of Article 36 of the EC Treaty and for which the UK does not intend to apply the de minimis rule (OJ C 68, 6.3.1996, p. 6), the UK will respect State aid procedures under Articles 87, 88 and 89 of the EC Treaty. Award of contracts 15.6. Implementation of measures must comply with Community policy directives for the award of contracts. Notices sent for publication in the Official Journal of the European Communities pursuant to 375 those directives must specify the projects in respect of which Community assistance has been applied for or granted. Application for assistance in respect of major projects must include a complete list of contracts already awarded and the relevant written reports when these are required under the public contracts directives. In the case of other projects, in particular those whose total value is above specified thresholds the written report on each contract awarded, when provided for in the public contracts directives, will be made available to the Monitoring Committee and sent to the Commission if it so requests. Equal Opportunities for men and women 15.7. The integrated approach to the delivery of the policy objectives of the plan extends also to the key cross-cutting objective of integration between women and men. The measures part-financed by the Rural Development Regulation should comply with, and where appropriate contribute to, Community policy and legislation on equal opportunities for men and women. In particular, the opportunity should be taken to consider the possibilities for investments and training which facilitate the return to the labour market of people with children. These key requirements are discussed in Section 6.1 and underline the individual measures in the plan, which will be applied in accordance with the requirements. 15.8. Equal opportunities has been identified as a key horizontal theme for European structural funding for the period 2000-2006. This is the direct result of the 1997 Amsterdam Treaty (Article 141), which expanded the scope of EU Equal Opportunities policy, implementing a new employment strategy in which equality is a fundamental component, and extending the principles to include measures to combat discrimination based on racial or ethnic origin, religion or belief, disability, age or sexual orientation. Thus the concept set out in Article 119 of the Treaty of Rome, which called for "equal treatment of men and women in matters of employment and occupation, including the principle of equal pay for equal work or work of equal value" has now been extended to other excluded sectors of the community. The National Assembly has itself emphasised the need to consider gender, race and disability issues as priorities in the development of inclusive practice in Wales. Other Community Policies 15.9. Measures must comply with the other Community policies provided for in the Treaties, in particular the establishment of a space without internal borders, the common agricultural policy in all its aspects including any exclusions set out in Regulation (EC) No 1750/99, the common fisheries policy in all its aspects, of the Council social exclusion policy, including equal opportunities for disabled persons, industrial policy, policy in favour of SMEs and the craft sector, policies concerned with energy, transport, telecommunications and information techniques, trans-european networks and research and development. 15.10. Productive investment in the field of processing and marketing of products indicated in Article 12 of Regulation (EEC) No 866/90 will respect the selection criteria laid down in Commission decision 94/73/CE, if they come within the field of intervention of the EAGGF Guidance section. 376 16. ADDITIONAL STATE AIDS 16.1. State aid granted in respect of the measures proposed to be implemented in this plan will respect the provisions of Articles 51 and 52 of Regulation 1257/1999, which simplify the previous regime under which the control of state aid to the agriculture sector was undertaken on the basis of a variety of different instruments. State aid will also take account of the guidelines on state aid in the agriculture sector. 16.2. In particular, the agri-environmental schemes - especially the all-Wales environmental scheme, Tir Gofal - have been designed to respect the general objectives of Community environmental policy, and to ensure that aid is only made available to farmers who give adequate agri-environmental commitments. 16.3. The measures being implemented under this Plan are shown, together with their respective, indicative amounts of Community financing and state aids in Section 8. 377 378 17. EX ANTE APPRAISAL : SUMMARY Introduction 17.1 Roger Tym & Partners, Land Use Consultants and Kernon Consultants are appointed to undertake the ex ante appraisal of the Wales Rural Development Plan and assist in finalising the Rural Development Plan (RDP). Due to delays in producing the final draft, the ex ante evaluation has been undertaken in a very short space of time (seven working days) and advice on the finalisation of the RDP has had to be given informally based on examination of a series of draft sections. Methodology 17.2 The appraisal of the Wales RDP uses secondary data and follows the guidance provided. Informal comments were provided to the Welsh Assembly on the context, strategy and measures sections of the Plan. These comments have been incorporated in the Plan to an extent and have resulted in a more coherent approach to the sections that were examined. There remains considerable work to be done particularly in terms of making the links from context to strategy and measures absolutely clear; to make a number of important points explicit; and to add information that is currently missing from the text. We have tried to provide guidance on missing information. Context 17.3 The Plan provides a detailed analysis of the main issues facing rural Wales - an ageing and sparce population, low GDP, dependence on low value economic activities, decline in farming incomes, poor quality soils, and lack of vocational skills. It also highlights a number of areas of opportunity. Analysis of Previous Results 17.4 Wales has been in receipt of a number of European and national programmes to assist in restructuring its economy and the modernisation of its agricultural industry. Appraisal has shown that the economic programmes have suffered from a number of problems including: ! ! ! ! ! ! ! ! poor links between the analysis of the problems and the programmes developed to address them; actions have lacked rural distinctiveness; weak links between projects proposed; too great an emphasis on tourism; too little involvement of voluntary and community organisations; lack of synchronisation with other national and regional programmes; poor definition of targets, outputs and monitoring arrangements; and lack of baseline data. 17.5 Whilst some of the lessons of previous programmes have been incorporated in the Wales RDP, there are still areas of concern. 379 17.6 Analysis of programmes specifically directed at improvement in the agricultural industry show that agri-environment schemes have been successful in maintaining and enhancing habitats, landscape features and archaeological sites and the experience of these schemes has been incorporated in the present proposals. Hill Livestock Compensatory Allowances (HLCA) have helped to maintain farming communities and the broad structure of hill farming, but the overall impact of the Less Favoured Areas (LFA) package has failed to conserve the countryside and its ecology. Consistency of the Proposed Strategy 17.7 The RDP contains a wealth of information on general rural development issues and specifically those relating to agriculture and associated activities. The information needs to be rationalised and provided within a more coherent structure to make the links between context, strategy and measures more explicit. 17.8 Physical Context: There is a reasonable consistency between environmental designations and the rural environment priority. Less explicit is the link between priorities for agriculture and enabling land use to become more environmentally and ecologically sustainable. The relationship between physical topography and its impact on agricultural practice should be developed. The agri-environment and LFA measures provide a means to address the issues. Climate change is identified as an important issue, but is not addressed. 17.9 Rural Infrastructure: Poor transport links are the main issues raised although ICT is mentioned. Utilities are not mentioned. There is no specific discussion on how transport impinges on the measures e.g. marketing and processing. 17.10 Population: Social sustainability is a key element of the strategy following from the analysis of population issues in the context. The LFA measure is intended to assist in the maintenance of the rural population and thus address this issue. It is not clear if the HLCA measure will address population issues. A strong link is made between maintaining rural communities, the cultural and linguistic heritage and the LFA measure. The low level of ICT use is seen as an opportunity, identified in the strategy and a potential area for the training measure. The loss of rural services is noted (qualitatively) in the context and identified as a priority and as part of the Article 33 measure. 17.11 Economy: The low level of GDP is highlighted and addressed as part of the development of value added initiatives as a strategic priority for agriculture and forestry, although there are no specific references to raising GDP. The problems of employment in agricultural and related activities are developed in the strategy as part of the priority to broaden the economic base and by a number of measures including marketing and processing initiatives. Low earnings, declining farm incomes, and diversification are addressed within the LFA and forestry measures. 17.12 Economic Context in Remoter Rural Areas: References to problems such as loss of population, economic activity and agricultural employment in the SDAs are not specifically referred to in the strategy although the LFA measure does target resources to the remoter rural areas. More specific linkages would help to strengthen the strategy and the links to the LFA measure. 380 17.13 Non Agricultural Sectors: The tourism, fishing, forestry and manufacturing sectors are identified, but there is no reference to public services, an important source of employment in rural Wales. Tourism is noted in the strategy and the Article 33 measure specifically identifies tourism as one of the four priority areas for expenditure. Fishing is not relevant to the Plan. From the information presented on forestry it is difficult to draw conclusions about future opportunities, but it is taken forward into the strategy and has a specific measure. Value added is identified as an opportunity (not substantiated statistically), a strategic priority and is developed in the forestry and marketing and processing measures. 17.14 Agriculture: The role of agriculture in the management of the countryside and its importance in employment, the economy and generation of GDP in rural areas are recognised as are the problems of an ageing workforce, declining employment, declining number of farms and increases in farm size. The importance of family farms is noted and the HLCA and training measures are intended to keep employment on the land. No measures address declining services and the age of farmers although the assistance to young farmers could help if more resources are allocated. The dependence on subsidy is not sufficiently addressed. The Article 33 and marketing and processing measures could help, but these are allocated only a small proportion of the RDP budget. The major measures, HLCA and Tir Gofal, both include subsidy. The RDP notes that lowland farmers have levels of income below those of farmers in the LFA and incomes falling in parallel with LFA farmers, but the strategy does not explain why these farmers should not receive particular assistance. The emphasis of the RDP is on the continuation of previous programmes rather than diversification or enhancing the income from farming. 17.15 Balance Between Measures: The Plan focuses on two measures - LFA and Agri-environment (90% of budget) - because of limited resources. Much smaller allocations have been given to six further measures and only the Retirement of Older Farmers and Investment in Agricultural Holdings measures have been excluded. The justification for concentrating on these two measures is not stated explicitly although a number of reasons are implied - the limited amount of finance available, existing commitments and lessons learned from previous programmes. Given the emphasis on building a long-term future for farming, the choice of measures and the finance allocated to them needs to be much more clearly stated. Consistency with Common Agricultural Policy and Other Policies 17.16 The measures proposed in the RDP are consistent with the CAP and in particular: ! the HLCA scheme is changed from a headage payment to an area payment system as required by Agenda 2000; and none of the measures will inhibit the operation of the CAP as it is currently structured. ! 17.17 Tir Gofal should meet many of the environmental requirements including those of the Government's UK Biodiversity Action Plan. Where land is covered by a Tir Gofal agreement, it will assist in the conservation of habitats and species proposed under the EU Habitats and Species Directive. 17.18 It is difficult to estimate the extent to which the proposals of the RDP are consistent with competition policy as there is no indication that it will apply to particular measures. We assume that state aid issues will be addressed. 381 17.19 The analysis of the context contains little gender specific analysis and equal opportunities issues are not discussed in the proposed measures. The strategy does contain a specific section, but the impression given is that equal opportunities are not fully integrated into the RDP. Assessment of Expected Impacts 17.20 Quantified impacts are not defined for the strategy or the measures although an attempt has been made to identify global objectives. 17.21 The common evaluation questions have been addressed in this evaluation, although they relate more easily to mid term and final evaluation stages. We have focused on the extent to which the strategy and measures address the issues raised by the evaluation questions and whether the information to be provided will be adequate. It is not obvious that the measures will deliver outputs that will address the main problems of the area and therefore have recommended that the specific links should be clearly identified. Quantification of Targets 17.22 There are no quantified output or impact indicators within the Plan and therefore we are unable to assess the impact that it will have. A range of standard monitoring information is identified e.g. project costs, and we recommend that this is collected by the Programme Executive. Output and impact indicators for each measure should relate specifically to the actions proposed and be measured against a known baseline. We have identified suitable output and impact indicators that could be developed for the RDP. 17.23 ! Our estimates of the scale of outputs is as follows: HLCA - c.1.3 m hectares will be covered and will help retain farming systems, labour and farming families in LFAs, with an effect on the wider economy. ! Agri-environment (Tir Gofal) - c.110,000 hectares per annum will be covered as will 17 'priority habitats'. ! Agri-environment (Organic) - additional c.6,000 hectares in Year 1 with additional 1,500 to 2,000 ha in each subsequent year. ! Marketing and Processing - not possible to estimate. ! Training - between 2,400 and 9,000 people receiving training over the programme period. ! Article 33 Rural Development - c. 47 jobs pa (315 over the programme period). ! Forestry - not possible to estimate. Verification of Implementing Arrangements 17.24 The National Assembly for Wales will be responsible for the RDP with administration, monitoring and evaluation being undertaken by a Programme Executive. A similar arrangement has been in place for current EU programmes. Administration of individual measures (other than training where no organisation is identified) is proposed to be undertaken by a number of different organisations. Reporting arrangements for these organisations are not made explicit. A 'package' approach to the delivery of 382 measures is proposed, but it is not clear how this will be undertaken for some measures e.g. LFA, agrienvironment, forestry and training. 17.25 The RDP proposes a Monitoring Committee and we support the intention to limit its size. There is a requirement to indicate partnership arrangements, but there is no information provided. Information on proposals for monitoring is very limited and this is an omission. There is also very limited information on procedures for funding applications and this should be included. Conclusions and Recommendations 17.26 A number of conclusions are drawn from our analysis in the ex ante evaluation: ! ! The strategy does not clearly link the context, strategy and measures. The RDP concentrates principally on two measures - agri-environment and LFA and provides modest support for four others (forestry, marketing and processing, training and Article 33 Rural Development). The RDP has embraced the philosophy of the Rural Development Regulations but the strategy does not always make the linkages clear. Integration of environmental concerns is achieved and the RDP should contribute to achievement of sustainability although the RDP does not explicitly identify how this will be achieved. Equal opportunities issues are not as well integrated into the RDP. There is little information on monitoring and output or impact indicators are not effectively identified. This is an omission. ! ! ! 17.27 Our key recommendations are: ! Make the links between the analysis of the current situation, the RDP strategy and the measures much more explicit. Greater justification for the balance of resources, acknowledging the financial constraints set by a limited budget. Greater clarification within the measures of what will be funded. Integrate the potential for environmental benefits into the LFA measure and its payment structure. Clarify implementation arrangements to demonstrate how delivery of the RDP will integrate with other programmes and achievement of the 'Rural Wales' vision of the Rural Wales Partnership. Improved integration of equal opportunities issues into the RDP. Identification of quantitative and qualitative outputs and impact indicators for all measures, linked to baselines which can be regularly reviewed and updated to provide information on changes over time. ! ! ! ! ! ! 17.28 The complete Ex Ante Evaluation Report is at Appendix 23. 383 Further Copies of this document can be obtained from: Food and Farming Development Division National Assembly for Wales Cathays Park Cardiff CF103NQ Tel: 029 2082 6257 e-mail: Michael.Eklund@Wales.gsi.gov.uk Website: http://www.Wales.gov.uk 384