George Pitcher: Why this is the last time we’ll bail our farmers out

The flawed foot-and-mouth compensation scheme is proof that government-funded aid doesn’t work. This will be the last time farmers can rely on it, says George Pitcher

We spent last August in a small Victorian mansion in Cumbria, set in about three acres with a grass tennis court and a ha-ha at the end of terraced lawns that overlooked the Eden valley to the fells at the foot of the Pennines. While we were there, I learned that the house was on the market for rather less than the value of our modest Edwardian villa in south London.

I try to imagine what it’s like up there one year on. The relative economies having been further polarised by the South-eastern property boom and the devastation of Cumbria by foot and mouth. I think of happy family walks along Hadrian’s Wall that would, presumably, have been prohibited until recently and which are bereft of the sheep that made it a living, working place.

I think of the pubs, with good home-made food, foaming ale and, sometimes, a bouncy castle in the back garden that the landlord would inflate with a weather eye on the clouds rolling in over the fells. And I think of the lads running the go-kart track in an old hangar on the edge of Carlisle Airport that my eldest son and I dropped in to on the way back from the shops. I wonder if they have survived the tourism blight.

This year, we’re in the Mediterranean. A contrast, we thought, to the games in streams and bonfires in woods, though the Roman remains are somewhat similar. But the truth, as many middle-class urbanites will admit with shame, is that we probably wouldn’t undertake such a domestic holiday this year precisely because of the devastations of English countryside by the foot-and-mouth crisis.

We might bang on about the importance of supporting the rural economy and the great deals that can be struck in deserted hotels, but smug metropolitans don’t want to holiday in depressed lands through which at least two of the horsemen of the Apocalypse have recently ridden. It may be unkind and unfair, but it is not untrue. The capacity of holidaymakers, domestic and foreign, to turn their backs this summer on Britain can only have an exacerbating effect on the economic downturn that is now well under way, from the Lake District to Devon.

So much for the observation of the crisis; the more interesting question to be asked is what can be done about it. It seems to me that gestures are of little or no value. The fact that the Blair family is to append a holiday in Britain to “support” the countryside is about as much use, frankly, as the Pitcher family returning to Cumbria. It may serve our moral self-esteem, but it doesn’t re-invigorate a domestic tourist industry on its back.

In Keswick, the Cumbria Crisis Alliance, an umbrella organisation (appropriately enough, given the capricious Cumbrian weather) for the area’s tourist trade, makes the point that the farmers have been supported, while the tourist industry has been effectively abandoned to its fate.

Just one example of what riles the CCA is that the National Farmers’ Union, while securing handsome compensation for its members, resisted a vaccination policy that would have re-opened footpaths many months ago – so underlining the Government’s commitment to keeping the countryside “open for business”.

It is difficult not to sympathise with the tourist industry. But I’m afraid what we’re into here is the knock-on effect of a prevalent compensation culture. And it is a culture that, in this instance, has grown out of a compensation policy very poorly handled by the Government.

Fixed rates of compensation per capita led to the alleged abuses, whereby there was said to be a market being made in infected animals, since compensation rates exceeded market rates. Then it “emerged” at the weekend that nearly 40 farming millionaires had been created through the compensation scheme.

This looked like a government leak – it would certainly be consistent for New Labour to find it shocking that a livestock herd could be worth in over &£1m – to prepare the way for Chancellor Gordon Brown to declare that the taxpayer should not be expected to foot the compensation bill for such crises.

One proposal is that the insurance industry should step in to make provision for financial compensation in agricultural crises. In practical terms, the nature of risk assessment would seem impossible, but Brown is right to suggest that some other solution has to be found other than burdening the taxpayer, because compensation as it stands doesn’t work.

Some farmers have not suffered infected stock and so have not been compensated but, because their farms are near to where outbreaks have been detected, they have not been able to move their animals to market and are consequently suffering uncompensated financial loss. In any case, the compensation system doesn’t work because it is prone, as we have seen, to abuse and it fuels the perception of farming, unlike mining or shipbuilding, as an industry that is bailed out as a special case.

I don’t know what the solution, if any, will be for the future of farming. But I do know that tourism can’t go down the same path as this tragically mismanaged industry and expect the public purse to underwrite it. Ultimately, I’m afraid that farming is going to have to get used to tourism’s harsh plight, rather than tourism aspire to being as partially treated as farming.

George Pitcher is a partner of issues management consultancy Luther Pendragon

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