1 [1 SEP 2004 I23: BIRKHALL 8th September, 2004 It was a great pleasure to get you both to Birkhall for tea last weekend and to discuss various issues. I thought it might be helpful if, as usual, I put them in The main issue that we talked about was agriculture. I mentioned to you the anxieties which are developing, particularly amongst beef farmers and to a lesser degree sheep'farmers, of the consequences of the Mid Term Review. There is no doubt that decoupling support from production provides many opportunities, but it is also creating some real? fears amongst the livestock sector. As you know, beef farmers were particularly heavily subsidized and the worry is that the removal of speci?c livestock support may mean that farmers will decide it is simply not rearing animals. If this happened the large areas of the dependent on beef and sheep farming will change beyond all recognition. As with all these things, a balance has to be struck. You know that I have been an advocate of the principles behind the Mid Term Review, but as we agreed right at the start, the method of implementation of the new regime is what will make all the difference. I discussed with you some relatively simple steps which I think could be taken to ameliorate the situation and ensure that help is given to ease the transition to the new world. If I may, I shall list them: a) Every support must be given to beef farmers so that they can seize the new opportunities and cope with the reduction in support in other words they must be encouraged to co-operate and learn about marketing. The English Farming and Food Partnerships is working hard in this area, but I wondered if it would be possible for the Government to channel funds speci?cally to help the beef sector through the existing Agricultural Development Scheme? As I Understand it, through this mechanism the Government can grant-assist groups of farmers to start marketing or other initiatives. Inevitably, such help needs to be advertized widely so 6 that the maximum number of farmers are encouraged to bene?t from the funding and advice available. 6 b) d) Sufficient support needs to be provided to hill farmers who play a particularly crucial role in maintaining the beauty and the communities of the uplands. The dry stone walls, the unique livestock management practices, such as hefting of sheep, and the social fabric of these areas are utterly dependent upon these farmers. If they are to care for the land in the way that the public would wish and improve their own competitiveness and marketing, the Hill Farming Allowance, which currently exists alongside the new Single Farm Payment, must remain. There is a growing sense of anxiety that the Treasury will try to stop it once the S.F.P. is in place and I cannot overemphasize just how important it is that this support remains in place. Essential to livestock farmers is access to a suf?cient infrastructure of livestock markets, abattoirs and cutting facilities, particularly if they are to respond as we would want to the growing opportunities for direct selling and collaborative marketing. Indeed, this was one of the recommendations in Don Curry?s original report. I am sure that Regional Development Agencies could do more in this area, and any encouragement which they could be given by central Government would be much appreciated by the livestock sector. So much depends on the consumer demanding British produce and I only wish that more could be done to encourage people to buy British and to understand that it is only? with their support that British agriculture and the will survive. I know that European Rules preclude the Government from running a campaign to promote, solely, British produce but, for all that, it would be splendid if the Government could ?nd innovative ways to give the necessary lead. Public procurement of beef is an obvious area in which the Government could make a substantial difference to the beef sector. For instance, I understand that the Ministry of Defence is now sourcing a proportion of beef from British suppliers, but no doubt more could be done. I have-raised with you on a number of occasions the importance of reducing the bureaucratic and administrative burden on farmers, and you have been most reassuring in your replies. Suf?ce it to say that any pressure which you can bring to bear on G) D.E.F.R.A. through the Panel for Regulatory Accountability, which you told me you are chairing, would be much appreciated. Vigilance is essential to help of?cials resist returning to type! I also mentioned to you the increasing problems affecting the dairy sector. I have been speaking to a number of different people about what could be done to ameliorate the situation and there is no doubt that one major problem appears to be the Of?ce of Fair Trading. As you know, the dairy sector is going through a major rationalization and many existing farmer-owned co-operatives are expanding as farmers increasingly understand that by working together they have more power to deal with processors and retailers. Unfortunately, I am told that the Office of Fair Trading is becoming a serious obstacle to developing dairy co-operatives of the necessary size and in?uence. As I understand it, it sees the United Kingdom as ringrfenced'with the Channel acting as a barrier to imports, which is, of course, ridiculous. The View is that it will oppose any company which looks like exceeding twenty-?ve per cent of the UK. market share. Meanwhile, in Europe, particularly Denmark and Germany where co-operatives are more established, competition law is being interpreted entirely differently and there is one co-operative in Denmark that has a ninety per cent market share! This may be somewhat excessive, but unless United Kingdom co?operatives can grow suf?ciently the processors and retailers will continue to have the farmers in an arm lock and we will continue to shoot ourselves in the foot! You did kindly say that you would look at this and see if there was anything which could be done to help the OFT. to take a wider View. Finally, I did raise an entirely different subject to do with the resources available for our Armed Forces. I mentioned to you that during a recent visit to Northern Ireland I was able to see the hugely impressive airborne surveillance capability provided by the Armed Forces in the Province and, increasingly, in support of British Forces in Iraq. In particular, I saw the Army Air Corps?s ?Oxbow? equipment, which is a major advance in surveillance technology. The aim of the Ministry of Defence and the Army Air Corps to deploy this equipment globally is, however, being frustrated by the poor performance of the existing aircraft in high. temperatures. Despite this,?the procurement of a new aircraft to replace the is subject to delays and uncertainty due to the signi?cant pressure on the Defence Budget. I fear that this is just one more example of where our Armed Forces are being asked to do an extremely challenging job (particularly in Iraq) without the necessary resources. I do apologize for writing at such length. Meanwhile, I cannot tell you how grateful I am to you for agreeing to give my Business and the Environment Programme?s Tenth Anniversary Lecture next Tuesday, and I am particularly pleased that Mrs. Blair will also be coming to Clarence House for the reception and dinner afterwards, although I do understand that you both have to slip off after my speech which I will now be giving before dinner. 9 llan 10 DOWNING STREET LONDON SWIAZAA 11 October 2004 THE PRIME MINISTER QJW Thank you very much for your letter of 8 September, following up our discussion. As ever I found your points constructive and thought provoking. Can I start, though, by thanking you and your staff on behalf of Cherie and myself - for the organisation and hospitality around the Business and Environment programme 10th anniversary lecture. It proved to be the ideal audience for what I wanted to say, and has once again proved how farsighted you were in setting the programme up. Before going onto your detailed points, I should say that I am generally very encouraged by the way the farming community are starting to look for solutions to issues themselves rather than looking automatically to government. The maturity of approach in the NFU leadership over the poor harvest for example suggests that much of what we have both been trying to achieve has started to bear fruit. Successful implementation of the CAP deal is now, as you recognise, our t0p farming priority. We must not only get the processes right, but win hearts and minds as well and the presentation of the Entry level scheme and the whole farm plan will be very important here. In this vein you raised specifically the issue of beef farmers. I agree with you that EFFP are starting to do some good work. Where I might take a different approach is on possible support for the industry. At present, I understand that the main problem in the UK market is undersupply 0f beef. But if we lift the over Thirty Month scheme, this will change dramatically. So my priority is to work towards help for beef farmers to re-establish their markets post OTMS, rather than in the very immediate future. The Meat and Livestock Commission will have an important role here. I agree with you that we must continue to support hill farmers, and their role in maintaining some of our most valuable habitats and environments. I understand that the Hill Farm Allowance will continue until 2007, and that consultation on a replacement regime will start from the basis that a similar quantum of support will be needed for hill farmers thereafter. I hope we havelstarted to turn the corner on infrastructure support for. local produce and I agree that the bene?t of promoting local sourcing is markedly reduced without this. Martin will share a detailed note on this with including a number of cases where processing and marketing grant and/or the rural enterprise scheme have made a difference. Your mention of the RDAs was interesting. I hope the transfer of money from DEFRA for them to cover rural issues will provide an incentive for them to really get to grips with the issues of rural economic performance. But it is clear they need in some cases to up their game. As you know, I have long been a supporter of the red tractor and of local sourcing as means of promoting British food. I think we are making progress on each of theSe, and the new leadership and governance of the red tractor is starting to make an impact. The armed forces? record in using British food is much understated, but I will see if we can do more on beef in particular, to coincide with any lifting of the OTMS. I also think we are beginning to up our'game more generally on public sector food procurement. Regional training workshops should start next month, Larry Whitty is setting up a national suppliers network. The Government Of?ces are working well on promoting good procurement of food, and the locally sourced school meals agenda is definitely moving forward. Finally, the MLC report that 60% of local authorities claim to have adopted sustainable development criteria in their food purchasing. We remain at one on the importance of reducing bureaucracy and administrative burden on farmers. I hope that the ending of IACS forms with the introduction of the new single farm payment will herald a step reduction in red tape. It should be followed by the whole farm? plan, with a one-stop shop for farmers? interactions with regulators. But DEFRA need to do more, and we are working with them to deliver a really good strategic approach to regulation. Finally, on agriculture, you raised the issue of milk. I hear different stories about the OFT attitude and part of the perception that they are a problem may well stem from the period in the immediate aftermath of Milk Marque. Of course, as you recognise, they are an independent body and I couldn?t in?uence them even if I wanted to. I also welcome the proposed for vs farmers from the OFT, and their private willingness to talk to co-operatives, on a without prejudice basis. But I understand you have your own channels of information, and would welcome any further information you get on the subject. I am of course also aware that the price of milk has been depressed for some time. It may be that the single farm payment will help here. On the subject of the helicopter, the limitations of the existing platform, particularly in the extremely challenging environment within Iraq, are well recognised by the Ministry Of Defence. Nevertheless, we do have four Mk9 helicopters from 1 Regiment Army Air Corps deployed alongside Chinook and Puma with the Joint Helicopter Force (Iraq) and, as necessary, we do Seek to improve the surveillance capabilities available to our deployed forces through the Urgent Operational Requirement process. In the longer term, the programme to replace the capability provided by the has been absorbed into a new Future Rotorcraft Capability programme. This seeks to consider holistically the overarching future capability requirement for helicopters and to deliver a more coherent future programme, avoiding some of the pitfalls that we have encountered in the past where a number of individual projects have found themselves in competition for priority within the Equipment Programme. While the Ministry of Defence clearly has to operate within ?nite resources, our planned investment in future helicopters will. be substantial around ?3 billion over the next ten years and over ?6 billion over the coming two decades. Replacement of the and Gazelle reconnaissance and surveillance capabilities will be a priority for this programme, which will also seek to deliver a future ?eet that is fully capable of deployment in all anticipated operational ikgl?? I Wage) for ?5 a? cal/wrath? 13, Maw; ff lam. His Royal Highness The Prince of Wales KG KT GCB AK QSO ADC L313. "x Fl dr' EE-i?gg24thv-February, 2005 i535nix}. En'. - - . 1 I .5Immunity-to 0131381163: You . . 5 "reb13313glpf??f-prugthemmwriting . a. -. - . Fi?-5i i" - ?iitimtion; The .Liis: hein annually. As i is .eja?s?clia?d spread by Study in the I :3 .3?sz - P571 I 'u l- - F: IS affective In . ?f?llul . .53 .9 -B??egahri?v'msaaq??bwthe ?fth year of L"6gi?i?rtheii?gd?aigg i'l 13-4-155.11 -- ur? "u to announcea framew?rk: for the .cOntrol'of t?e disease but, as far farm which: I mal- anger 'aatgab?agaiuabIe-came, I done: ungently, 'r remember mix-MD ?Emmy! the af?rhiam-hm ambushed their -'-What the i to them a. theJFood 17: at.- Lido ?my - Edi: ?f able, id Farm-Payment atl?icjjirliQSIE Ii?gg?lyf' because-pf computer Sho?c?n?ngs. This but particular-1y tenant :fai?mers Who - until; under: ?ue-subsidy that thee'Natipn-af Bannersi Uni?h? ha?- Sugga'Stedl vpayment to-tideif I - urge you to look again at introducing ?pierg-r 01; 11 (if .. _it_is necessary. I, for seem to mind not at all about the slaughtEr.? of'tho ?151.5an 0f axpensivg sciattl?gand yet 'an ov?-E-Rgpula?bn Of badgers to the, this is I. also to i'y'tm the'she? u?d'er which farmers are labouping at the moment as. the? nquf-Si?gle Farm - - hQW-mmgm 1 1193511913; mama; 2.19 . . Sigh?t?? :23? mighi look mm, 3021' th'cught it5bould .- documentation magi-vied in; '-th_is in, addit-i?? to new _re.g1?1?tio?s ?511 ?311 end-@d paper. 31 pages} iLSng?g-?r?s?. campl-ignaeh??dbwk?f . .. th??an?g:Guidanc?glig? - . Compliance. Guidance- fo of Habitat and Landscape FeatuneS:A $93,ng g: Consultati'o? paper on agriculmrc 19 r::pages*' 'i-Ili'jrh'Iii.? 1 . . also told: you-ab'ou'tgthe 3,1331 61's. over-.1 and. I do: thinkihagzth-i ..S?Wming .r -- . -- . - had-ma, 1.- Y?u?hav? haafd'm? t?ilyeu ion so?many - importance of?the fam?y farmers; particularly thoseiwho reside in the - upland areas. These are, Without doubt-the most biiauti,ful' areas of -j the: which tourists ?ock to see, and yeti-1133:9176 .?aetmost {i i? . 4, II .. -l . ream help them - ?to?persu'ade . 556 'u ?1 .. etieycle ofdespair . ell?lp??e?ible hel??t? leam't'o co-O'perate, slam" to'n'lake?the'mo? in limitless terms of - - winch-they llve. 'r :menta?iiettfte ?yen; in}: snat'ieiyialibet- W?s-lack of 1; vegetables: Recent I falling . only 64' per cent environmental and eCone:nic grounds this has 6 elb?e front"- the ?nintf-of?view Of this . 9" is- . . .. . il-engtli .the'beh eviour'of the retailers - ?ower- ?g?c?ntr?afention of the . . cede-e? Fishnets; withers: ?is: no doubt A: .f the" smiles isthe single- biggest issue th-ejfosd'chain; am if-it is not dealt with 'Whieh has been going cn risks becoming . - Fknow that Margaret Beckett recently made clear lessthan had been 1 I that she. supported. the td'ea being mooted if? ?75 t?eile?ade? of 'ujomm'umty,? not least . IiEENSt-ienel names-z evoluntary t, ??liouldibe? created to ecldre?s .the-isSues of .. play Within "the. food chain. - I understand that - 1 for an independent 'arbitietor to be appointed entireljf primfate. way. I .LT. '-for this role. . mgn-t-nave the time Wotll'd have" all skills for - nlJ-? 1. er 1 -- . :We Squi: :?l?alisfo' about the; Enmm?bus brbbiengfof blimat? .chang?- and-the 1:919:39? mm L, .. "the ycari?ftha i496; 'ItsaNhtmal 1?53; .. Nevertheless; do rest - and all I would say is that jmu mayinn-Persi?w?-i .- u?certai?ty'as: who?! theiappmximate $.13 a .1 hospitals be redeveloped. for housmg under the? Gpvemtyp?jx?s plans}. 80 imp-Q?a?-Lhoth??- .- .- . mathinlg- - saidsthats?i? brief y'nur: i: I I We: brie?y mentiqn?d fhe; Europaan- Union pittegim '?gjgler?al. Madiig-in??i Whig-h i?SEha??B Eff? -: . I outlawing the 115 e. Qua-gs? I l_ I cragk, a?ut I - -. hr: daneiab?gt?iit arid-:1- am; - I shc?ly?qgthat; - ?311 Suggesti?g-someone- 141k to mg?gmhg Practitionersi:As-sociatipmig .. I?d 10 DOWNING STREET LONDON SWIAZAA 30 March 2005 THE PRIME MINISTER 02w [indwduf?b' Thank you very much for your letter following up on our enjoyable conversation. As you know, I always value and look forward to your views but perhaps particularly on agricultural topics. You raised first the issue of bovine TB, and the link to badgers. The Irish trials have indeed changed everything here, as I know Ben Bradshaw acknowledges. The crucial thing is now rapidly to work up the full case for action, so as to enable an early decision. (If we do not work through the case properly we will be challenged in the courts.) While I can personally see the case for culling badgers, I would not want to prejudge the decision. But I am not prepared to tolerate unnecessary delay, and I know, again, that Ben agrees. Martin will give a note outlining what Defra are doing on farmer bureaucracy. I think that Defra are starting to get their act together - on the cross compliance regulations, they did for example ask farmers how they preferred to get advice and the clear answer was for guidance lea?ets, which they could refer to as they wished. But I hold no brief for the size of the guidance! And Defra?s research shows a two thirds drop in form filling time including cross compliance compared with the old system. I take this with a heavy pinch of salt, but even so it is encouraging that they are, at least, seeking to ask these questions. But that said, I share your feeling that'there are some unreconstructed regulators still around, which is why we insisted that the Defra 5 year plan include a pledge to cut farming red tape by 25 per cent. It is also very important that Defra, analyse what they are doing against the cumulative burdens they are placing on the sectors of farming some of which simply cannot cope with more regulation at present. I can promise you that my Panel for Regulatory Accountability will stay firmly on the case. You raised too the issue of delay to the Single farm payment and a possible interim payment. I have a lot of sympathy with this idea, particularly for tenant farmers and new entrants, neither of whom have the kind of asset base that might lead banks to be sympathetic. The only issue is whether we can find a way of doing it that does not delay the main payment further, but I really don?t think this is insoluble. Defra are working on ideas, and I have said I want to be kept in the loop. You may be aware that the picture on self-sufficiency is proving rather more complex than either of us thought when we spoke. I think the figures need unpicking: I believe agrees. Martin and I will work with further on this. I am very grateful for the work you are doing for family farms, particularly in upland areas. I saw many of these farms myself during FMD. Diversification beyond traditional farm business including in the area of tourism is indeed part of the answer. If you find barriers to this do let me know. And I have long believed that farmers need to co?operate more, in order to equalise the negotiating power up the food chain and to minimise costs. I think EFFP are starting to do good work here. I have on occasion expressed precisely the concern about retailers ?arm lock? on suppliers that you express so well. I know too that after something of an improvement things have recently got worse. As you may be aware-(and this was the main reason why I have delayed writing until now) the OFT issued its report on this subject on Tuesday. I would not pretend that he report is earth?shattering in any way. But it is I think useful, in two respects First it keeps the issue very firmly open, with comments sought on their findings by the end of May. Second it explicitly acknowledges the case for a voluntary ?buyers charter? of the kind you and Margaret Beckett have both espoused. We can and will now more easily run with a voluntary code. I agree with you that energy efficiency can have a much larger role to play in our domestic action on climate change. The Budget supported this, as will forthcoming work on the sustainable buildings code: making a reality of energy efficiency in new buildings. I am also keen to see a bigger role for biocrops, provided we can avoid promoting monoCultures. I am really grateful for the suggestion that my staff meet Hank Dittmar. Martin and Miles Gibson met him earlier this week and were very impressed. They will help Hank with any blockages in Whitehall. Thanks too for your contacts on herbal medicines who have been sensible and constructive. They feel that the directive itself is sound and the UK regulators excellent, but are absolutely correct in saying that the implementation as it is currently planned is crazy. We can do quite a lot here: we will delay implementation for all existing products to 2011; we will take more of the implementation upon ourselves; and I think we can sort out the problems in the technical committee - where my European experts have some very good ideas. We will be consulting with your contacts and others on the best way to do this we simply cannot have burdensome regulation here. [Redacted by order of the Upper Tribunal] HM- His Royal Highness The Prince of Wales KG KT GCB AK QSO ADC