Rural economy 'failed' by UK Government, says Foot and Mouth five-year anniversary report

Measures to boost the rural economy after the UK's devastating Foot and Mouth crisis have failed, according to new research out today.

A study published by the Centre for Rural Economy (CRE) at the University of Newcastle upon Tyne on the fifth anniversary of the disease outbreak (1), reports that household incomes in remoter rural areas continue to lag behind the national average.

The worst affected counties (Cumbria and Devon) are falling ever further behind national economic growth rates. Even more worryingly, rates of new business registrations are declining in remoter rural areas for the first time in a decade (2).

A key reason for the slump, say researchers, is the failure of Government policies designed to help develop local rural economies since the Foot and Mouth crisis. In particular, the Department for Environment, Food and Rural Affairs (DEFRA), originally set up to champion rural issues, has been 'swamped' by other political issues such as climate change, and rural affairs has slipped way down its agenda, say the study authors.

The report says other reasons for the failure include:

  • The Government's response to the crisis and its aftermath was too heavily oriented towards the farming industry. Farmers received 1.34billion in compensation for livestock losses, while only 39million was given to the Business Recovery Fund aimed at rural businesses that suffered losses.
  • The Government and other countryside organisations have been preoccupied since 2001 with institutional reforms and mergers, including the abolition of the Countryside Agency, which had rural affairs at its heart.
  • The Government has passed over operational responsibility for rural development to Regional Development Agencies but, say the study authors, most of these are preoccupied with urban regeneration.
  • Less than four per cent of European Common Agricultural Policy funding earmarked for rural development is available to non-farming businesses and activities in the UK (such as rural services, village improvement, tourism). However, the vast bulk of EU rural development support goes to farmers, but agriculture employs just 2.6 per cent of the workforce in rural areas.

The Foot and Mouth crisis radically altered people's perceptions of the countryside. Previously, it was widely assumed that farming was the mainstay of the rural economy. However, when farmers' leaders and the Prime Minister discouraged people from visiting the countryside to prevent the spread of the disease, it soon became clear that the damage done to tourism and other rural businesses in 2001 far outweighed the economic damage to the farming industry. Yet the lessons have not been learned, according to the study authors.

Director of the CRE, Professor Neil Ward, said: "After Foot and Mouth, the Government had planned to improve its handling of rural affairs through a new Department of Rural Affairs. But setting up DEFRA in 2001 resulted in a sprawling ministry also handling environmental protection and climate change. The result has been the reverse of what was planned, and a marginalisation of rural affairs in Whitehall."

He added: "The mishandling of the FMD outbreak meant an animal disease wrought havoc on non-farming businesses in rural areas. Sadly, the bungling of the lesson-learning process has meant that polices for rural areas are in more of a mess than before Foot and Mouth struck, and those who suffered worst from the crisis have been let down".

One way to improve the economic prospects for remote and struggling rural areas would be for the Government to review Defra's rural economy remit in the light of the experience of the five years since Foot and Mouth.

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MEDIA INFORMATION
For further information, contact: Professor Neil Ward, 797-704-7511

"Foot and Mouth Five Years On: The Legacy of the 2001 Foot and Mouth Disease Crisis for Farming and the British Countryside", is published by the Centre for Rural Economy at the University of Newcastle upon Tyne. Copies are available from the University Press Office.

Additional notes:
1. This weekend marks the 5th anniversary of the outbreak of the Foot and Mouth Disease in 2001. (The disease was spotted on 19th February and confirmed on the 20th). The crisis cost an estimated 8billion to the economy and almost 6.5 million animals were slaughtered.

2. Median gross weekly pay is on average more than 13% lower in rural areas (318.20) compared to urban (367.80) (Commission for Rural Communities, The State of the Countryside 2005), and in sparsely populated rural areas, the mean income of households in the rural market towns and service centres is 1215 per cent below the national average of 29,989 (p.76). The most recent available official statistics show that between 2000 and 2003, the Government's preferred measure of economic growth -- Gross Value Added -- increased by 13.3% in Cumbria and 15.0% in Devon compared with a national growth of 17.4% (and 17.7% for London) (Source: http://www.statistics.gov.uk/ pdfdir/lgva1205.pdf). Recent figures for business registrations and de-registrations suggest that for the first time in 10 years there has been a drop in new business registrations in the most rural areas.

END OF PRESS RELEASE: Issued by Newcastle University Press Office. Contact Claire Jordan: Tel: +44 (0) 191 222 6067 or 07816 756 027. E-mail: press.office@ncl.ac.uk


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